As we have discussed, at frankly relentless length, Credit Suisse spends more than enough time in courtrooms and lawyers’ offices already. And has also, to its taste, lost enough money on hifalutin investment funds recently. So, given the rather distressing things it’s learning about the supply-chain finance firm whose products make up pretty much all of four funds Credit Suisse sells to clients with the means to hire very expensive lawyers, and whose money said supply-chain finance firm relies upon to continue, uh, financing supply chains, it’s going to go ahead and start limiting its future legal liability.
Greensill’s problems came to a head Monday after Credit Suisse said it would stop investors from buying or selling four private investment funds that rely exclusively on securities created by Greensill.
Credit Suisse froze the funds because some assets in them are “currently subject to considerable uncertainties with respect to their accurate valuation,” according to a notice the bank sent to investors….
German banking regulator BaFin last year began examining ties between Mr. Gupta’s businesses and Greensill’s German banking unit, according to a person familiar with the probe. The regulator was concerned that Greensill Bank had too much exposure to Mr. Gupta’s businesses.
Another factor in Credit Suisse’s decision to suspend the funds: Greensill’s insurance policies, which provide protection in case assets default, lapsed in recent days, according to some of the people familiar with the matter.
Of course, there are still going to be some pretty uncomfortable allegations in the inevitable litigation.
It isn’t Greensill’s first run-in with a fund suspension. In July 2018, Swiss asset manager GAM Holding AG froze a $12 billion fund after an internal whistleblower raised concerns about how the fund valued the Greensill assets. These included hundreds of millions of dollars of illiquid assets tied to Mr. Gupta’s businesses.
SoftBank’s multilayered roles in Greensill have drawn controversy. In addition to investing in Greensill itself, and receiving Greensill funds through its portfolio companies, SoftBank put $700 million into the Credit Suisse-managed Greensill funds.
Not, of course, than any of the above it too toxic for Leon Black & co.
Greensill is simultaneously in talks with private-equity giant Apollo Global Management Inc. to sell its operating business for around $100 million, according to people familiar with the talks. Though a deal wouldn’t be for all of Greensill’s assets, the amount represents a sliver of its peak valuation of $4 billion.