Greensill Capital used Credit Suisse Group AG’s
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has now cut supply chain funding to lend $ 350 million to one of its largest outside sponsors, private equity firm General Atlantic, according to loan documents reviewed by the Wall Street Journal and people familiar with the matter.
The previously unreported loan would be the second example of Greensill lending money to one of its part owners. Last year, officials at Credit Suisse launched a review of the money it manages with Greensill after worrying about the largest financial start-up investor, SoftBank Group Corp.
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, which also benefited from Greensill loans, the Journal previously reported.
Greensill was founded in 2011 by Morgan Stanley and formerly Citigroup Inc.
banker Lex Greensill. It went into crisis Monday when Credit Suisse froze $ 10 billion in investment funds that Greensill relies on to enter supply chain finance contracts, a kind of short-term cash flow for companies. The Swiss bank said on Friday it would melt the currency.
Greensill plans to file for bankruptcy in the coming days in the UK and is in talks to sell its operating business to Apollo Global Management Inc., Inc.
according to people familiar with the matter. Sales for a fraction of the valuation would be the highest, which was $ 4 billion in 2019.
The start-up of finance brought the euro-denominated loan to 2019 to General Atlantic, which is the second largest outside investor after SoftBank Vision Fund. General Atlantic used the loan to finance the construction of shares in a joint venture with German exchange operator Deutsche Börse AG
, according to the documents of the borrowers and the people familiar with the matter.
Recent Credit Suisse publications made to fund investors and reviewed by the Journal did not mention transactions with General Atlantic. An asset document in January 2021 lists supply chain financial trading of approximately $ 95 million by Deutsche Börse, a partner of General Atlantic’s joint venture.
Banking regulators set loan limits for major bank holders to prevent conflicts of interest. In Greensill’s case, some of the loan was taken from his German banking unit, according to the loan documents. Regulators this week said they were freezing the bank’s operations.
Other parts of the loan were repackaged into securities and sold to one of Credit Suisse’s supply chain assets.
Atlantic General’s loan “allows Greensill to strengthen its relationship with a major sponsor while receiving a strong return,” the loan documents within Greensill say. A financial jargon fan for an investor.
General Atlantic invested $ 250 million in Greensill in 2018. It had about 15% stake at the time of the loan, according to one of those familiar with the case. He currently has about 7%, the person said.
Founded in 1980, General Atlantic has $ 53 billion in assets and offices worldwide. The company is known for taking steps in fast-growing technology companies, such as Alibaba Group Holding Limited.
, before they go public.
In the case of SoftBank, his position in Credit Suisse funds was larger than previously known. In March last year, as Covid-19 markets feared, investors withdrew their money from Credit Suisse money, saving Greensill from a major source of off-balance financing.
Mr. Greensill, the company’s founder, contacted SoftBank CEO Masayoshi Son for help, according to people familiar with Greensill’s relationship with SoftBank. The Japanese billionaire agreed that SoftBank would invest $ 1.5 billion in the currencies, according to the public. That number is higher than the $ 700 million reported by the Journal last year.
That money was separate from the $ 1.5 billion SoftBank Vision Fund made directly at Greensill in 2019.
By the end of March, four Vision Fund companies were among the top 10 recipients of funding from the Credit Suisse fund, receiving about $ 750 million in total, according to a fund document sent to investors .
The Vision Fund companies were a self-financing company Fair Financial Corp .; Oyo Hotels & Homes Indian Hotel Series; glass manufacturer View Inc .; and Chinese online car trading platform Chehaoduo Group.
In fact, SoftBank was a Greensill part owner, a lender to him through Credit Suisse funds and a lender through his Vision Fund companies. The multitasking began the review within Credit Suisse, the Journal reported last year.
SoftBank bought its position in the fund before July last year, and Credit Suisse promised changes in the funds that would protect investors. The bank wrote to investors to state that about 15% of the notes in the fund were related to companies in SoftBank Vision Fund, according to a letter viewed by the Journal.
In December, the Journal reported that Greensill canceled a $ 435 million loan it gave to another Vision Fund company, startup Katerra. At the time, Katerra received $ 200 million in support from SoftBank which helped him stop a bankruptcy.
Write to Julie Steinberg at [email protected] and Duncan Mavin at [email protected]
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