Credit Suisse Suspends Investment Funds Linked To Greensill Capital

Credit Suisse Group AG has frozen $10 billion in investment funds that have powered Greensill Capital, which focuses on supply chain finance, a kind of cash advance. The asset management division of Credit Suisse said it would not let backers purchase or sell four private investment funds that only depend on securities made by the finance upstart, The Wall Street Journal reported.

“A certain part of the subfunds’ assets is currently subject to considerable uncertainties with respect to their accurate valuation,” according to a statement from Credit Suisse.

The investment bank was concerned about the finance startup’s exposure to Sanjeev Gupta, a British businessman in the steel industry, The Wall Street Journal reported on Sunday (Feb. 28), citing unnamed sources.

Established in 2011 and headquartered in Britain, Greensill has tapped Grant Thornton to help it navigate a potential restructuring and could soon seek insolvency, the paper reported. At the same time, Greensill is in discussions with Apollo Global Management to sell its operating business at a price of approximately $100 million.

A representative for Greensill said the firm acknowledged the investment bank’s move and that it is still in discussions with possible backers.

The news comes as Greensill postponed a new round of funding by a number of months after boosting the amount it seeks to raise, according to unnamed sources in a previous WSJ report. Greensill also had to forgive $435 million in funding it provided to construction upstart Katerra. The finance company obtained a 5 percent share in Katerra for forgiving the debt.

Last May, Greensill said it provided a final warning to companies that use its offerings to lengthen small business payment terms beyond 30 days.