EXCLUSIVE BlackRock, Mustier’s blank check fund management company of Credit Suisse – sources


  • No decision before President Horta-Osorio takes over in May – sources

ZURICH, April 9 (Reuters) – BlackRock (BLK.N) and Jean-Pierre Mustier’s blank check company are among the investors expressing their interest in the asset management arm of Credit Suisse (CSGN.S), three sources told Reuters, as the Swiss lender explores options for the unit after a string of costly scandals.

US investment firm State Street Corp (STT.N) is also considering a competing offer for all or part of the Swiss bank’s fund management business, while European asset managers, including Germany’s DWS, await behind the scenes, the sources said, speaking on condition of anonymity.

Former UniCredit boss’s blank check company Pegasus Europe, which focuses on investments in financial services, is expected to be listed in Amsterdam between late April and early May, two sources said.

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A spokesperson for Credit Suisse said the bank has no plans to sell any or all of its asset management business. BlackRock, State Street, DWS and Pegasus Europe all declined to comment.

Switzerland’s second-largest bank is reeling from its exposure to the collapses of Greensill Capital and Archegos Capital Management, with a charge of 4.4 billion Swiss francs ($ 4.75 billion) hitting its balance sheet after Archegos did not meet its margin commitments.

The scale of the tax – nearly three times the investment bank’s profit last year – and a 25% drop in its shares since late February means Credit Suisse boss Thomas Gottstein must take steps. radical measures.

The sources said Credit Suisse is in the early stages of a strategic review of its asset management arm and has yet to engage in in-depth discussions with interested parties.

The bank will have to wait until former Lloyds boss Antonio Horta-Osorio takes over the chairmanship in May before making a decision on whether to sell or split the unit, the sources said, warning that no deal would be done. was certain.

Credit Suisse’s latest set of problems began when its asset management arm was forced to suspend $ 10 billion from supply chain funds that had invested in bonds issued by Greensill Capital after the British firm lost insurance coverage on his loans.

“They have started talks with some of the parties, but no due diligence, no data room yet. Some potential buyers want the whole business, others only the parties,” said one of the parties. sources, referring to the bank’s asset management unit.

“Credit Suisse is still in crisis mode and has not yet decided how to proceed.”

REVISION

Credit Suisse announced in March an overhaul of the asset management unit amid the fallout from the Greensill debacle, bringing in former UBS (UBSG.S) chief Ulrich Koerner to lead the unit. and separating it from international wealth management.

He said at the time that the creation of a separate asset management division would serve to underscore its strategic importance to the bank. Read more

Gottstein also raised the possibility of splitting the company in an interview with Bloomberg Television in March, saying the idea of ​​splitting the unit was “potentially part of the plan” and “having a holding company around it could to be something that we are looking for “.

The bank’s fund management business had 440 billion Swiss francs in assets under management in 2020 and a pre-tax loss of 39 million Swiss francs.

The sources said the company could be valued at around $ 3.7 billion to $ 4 billion, with one adding that Credit Suisse would likely opt for a cash and stock deal that would allow it to extract the future returns of the business.

“A potential divestiture of Credit Suisse’s asset management business has been discussed in the past,” said Filippo Alloatti, portfolio manager and credit analyst at Hermes. “They themselves saw that the company lacked scale and discussed its merger with someone else.”

Credit Suisse is expected to attempt to retain a stake in any deal involving the company, which could also be split up and listed in Zurich, the sources said.

The company could also be listed through a deal with a Special Purpose Acquisition Company (SPAC), potentially involving Mustier’s vehicle or another blank check company, they said.

The richest man in France, Bernard Arnault, sponsors Mustier’s SPAC with French investment firm Tikehau Capital and former banker Diego De Giorgi, who worked closely with the new boss of the bank of investment by Credit Suisse, Christian Meissner at Bank of America.

Formal discussions with Mustier or his team cannot take place until Pegasus Europe finalizes its listing in Amsterdam due to regulatory restrictions.

Former Credit Suisse chief executive Tidjane Thiam is also raising around $ 250 million for his own company SPAC to invest in financial services companies in developed and developing countries.

($ 1 = 0.9262 Swiss francs)

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Reporting by Oliver Hirt, Pamela Barbaglia and David French, additional reporting by Abhinav Ramnarayan, Brenna Hughes-Neghaiwi and Tom Sims; Writing by Pamela Barbaglia; Editing by Jan Harvey

Our Standards: Thomson Reuters Trust Principles.

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