The Swiss bank's ties to the Japanese conglomerate are deeper than initially thought. The lack of proactive disclosure is troubling.
The ties between Credit Suisse, its supply chain finance fund, Softbank, and the Japanese conglomerate's Vision Funds are complex: the Swiss bank launched a fund three years ago together with Greensill, a specialty finance company in the U.K., to capture «reverse factoring» flows. The fund's assets stand at more than $5 billion.
Softbank invested $500 million into the supply chain fund, according to the «Financial Times» (behind paywall) – enabling the Japanese company to effectively fillip start-ups in its Vision funds, the outlet reported, citing specific faces of cross-interests.
Commingling Interests
The circular relationship wasn't proactively disclosed to investors; the FT reported the cases by poring through marketing documents. According to the bank, despite the media reports on Credit Suisse Supply Chain Finance Funds, there is no conflict of interest: «Investments made in the funds and the investment decisions made by the funds are separate. Credit Suisse Asset Management has full discretion on credit selection. In addition, strict investment and diversification rules are applied and the funds are only distributed to qualified investors.»
The pink paper reported that investors likely felt the relationship between Softbank and the supply chain fund was «at arm's length,» and would be irritated to learn «that, in fact, some of your co-investors were funding themselves.» Credit Suisse in April said the ties between Softbank and Greensill were publicly disclosed, and that the funds were highly regulated and subject to strict due diligence requirements.
