**Update #3: March 12, 2021** Credit Suisse Group AG has frozen four additional funds managed by Credit Suisse Asset Management that are directly invested in the four supply chain finance funds that Credit Suisse is liquidating. The four newly suspended funds, which hold $1.2 billion in assets, are:
- Credit Suisse (Lux) Multi Strategy Bond Fund.
- Credit Suisse (Lux) Multi Strategy Alternative Fund.
- Credit Suisse (Lux) Qatar Enhanced Short Duration Fund.
- Credit Suisse (Lux) Institutional Target Volatility Fund EUR.
Earlier this week, Credit Suisse removed three employees from their positions, in the latest fallout from its problematic Greensill Capital supply-chain finance funds, including Michel Degen, the former head of asset management in Switzerland and Europe, the Middle East, and Africa. The other two employees are Luc Mathys, who was the head of fixed income in the business unit, and Lukas Haas, who managed the supply-chain finance funds, which are now in liquidation.
**Update #2: March 8, 2021** According to reports, Greensill Capital has filed for insolvency protection and intends to sell its core business.
**Update: March 8, 2021** On Friday, March 5, 2021, Credit Suisse announced that it would terminate four supply chain financing funds valued at $10 billion, which it suspended on March 1, 2021, over uncertainties with respect to their accurate valuation. It is not yet clear what the ultimate losses will be to investors.
Original Post:
IORIO ALTAMIRANO LLP IS INVESTIGATING CLAIMS ON BEHALF OF CREDIT SUISSE INVESTORS FOLLOWING CREDIT SUISSE’S ANNOUNCEMENT THAT IT WAS SUSPENDING TRADING IN THE FUNDS
On March 1, 2021, Credit Suisse announced that it would stop investors from buying or selling four private investment funds that rely exclusively on securities created by Greensill Capital. The funds at issue are:
- Credit Suisse (Lux) Supply Chain Finance Fund
- Credit Suisse Nova (Lux) Supply Chain Finance High Income Fund
- Credit Suisse Nova (Lux) Supply Chain Investment Grade Fund
- Credit Suisse Supply Chain Finance Investment Grade Fund
Credit Suisse has been a steady supplier of investor capital to Greensill Capital through the four funds. Credit Suisse Asset Management suspended all four supply chain finance funds. If you invested in any of the funds, you might have a claim.
Iorio Altamirano LLP is investigating claims on behalf of Credit Suisse investors. Contact New York securities litigation lawyers Iorio Altamirano LLP for a free and confidential evaluation of your account.
About the Credit Suisse-Greensill Funds
The Credit Suisse-Greensill suite of funds has nearly $10 billion in assets. According to reports from the WSJ and FT, the main purchasers were insurance companies, pension funds, and corporate treasures, as well as Credit Suisse’s wealthy private-banking clients. There were more than 1,000 such investors at the time the funds were frozen.
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. The funds invest in securities created by Greensill Capital that fill the short-term financing needs of hundreds of companies.
These securities include Greensill Capital’s supply chain financing contracts, which allow companies and agencies to borrow money upfront to pay their suppliers, repaying investors later. Greensill Capital had financing contacts with blue-chip companies such as Vodafone and Ford Motor Co, and government agencies such as the New Jersey Department of Transportation. Greensill Capital has also extended financing to higher-risk borrowers such as small startup businesses and companies.
Credit Suisse Statement
In a statement published by Credit Suisse, the firm said that “In order to protect the interests of all investors in the Credit Suisse supply chain finance funds, Credit Suisse Asset Management fund boards have suspended the redemptions and subscriptions in these funds. The Credit Suisse supply chain finance funds are only distributed to qualified investors.”
The statement continued: “It is the fiduciary responsibility of Credit Suisse Asset Management to act in the best interest of investors in its funds. A certain part of the Subfunds’ assets is currently subject to considerable uncertainties with respect to their accurate valuation. Therefore, to prevent any detriment to the Subfunds and their investors as might result from such valuation uncertainty, it has been decided to suspend the calculation of the Net Asset Value per Share as well as the issuance, redemption and conversion of Shares from or into the Subfunds with effect as of 1st March 2021. Fund investors have been informed and will be provided with regular updates.”
The WSJ also reported that Credit Suisse had a plan to cap exposure of its $10 billion Greensill funds to a dangerous concentration of insurance coverage but never implemented it, according to people familiar with the funds. The concentration grew and grew until, at one point, the insurers were protecting 75% of the portfolio. The insurance was crucial because it made Greensill’s assets appear safer to Credit Suisse’s institutional investors, some of whom are restricted from putting cash into riskier investments.
How to Recover Losses or Obtain a Free Consultation
Iorio Altamirano LLP is a securities litigation law firm based in New York, NY. We have experience representing institutional investors in pursuing claims to recover financial losses arising out of wrongful conduct by financial advisors and brokerage firms.
If you or a client invested in the Credit Suisse-Greensill funds, contact New York securities litigation lawyers August Iorio and Jorge Altamirano of Iorio Altamirano LLP at august@ia-law.com, jorge@ia-law.com or toll-free at (855) 430-4010 for a free and confidential evaluation of your account.