Credit Suisse winds down supply chain finance funds linked to Greensill

Credit Suisse Asset Management (Switzerland) Ltd. is winding down its supply chain finance funds linked to specialty finance company Greensill Capital (UK) Ltd.

The Credit Suisse Group AG unit's fund boards decided to terminate the funds to ensure a balance between a timely liquidation of the funds and maximizing value for the investors, the company said March 5.

The four funds were suspended March 1 due to "considerable uncertainties with respect to their accurate valuation" over concerns about $10 billion worth of assets in the funds that are linked to Greensill Capital, which has a large exposure to a single U.K.-based client, steel magnate Sanjeev Gupta.

Credit Suisse said proceeds from liquidation of the funds will be paid in several installments, with the first installment of about 80% of the available cash and cash equivalents expected to be paid March 8 for the Luxembourg-domiciled funds and later the same week for the fund domiciled in Liechtenstein.

All shares of the funds will be redeemed pro rata to the funds' assets, while pending redemption requests will be canceled.

Additionally, the company waived management fees for the funds with immediate effect.

The Swiss banking group was also previously reported to have a bigger and wider exposure to the struggling specialty finance company than previously known, having extended in October 2020 a $160 million bridge loan to Greensill's Australian holding company for a planned equity capital raise that eventually failed to push through. Credit Suisse also maintains corporate lending ties with Greensill, and the latter's founder, Lex Greensill, is a client of the Swiss group's private bank, according to the Financial Times.