Credit Suisse to move private funds group to First Boston unit

CREDIT Suisse Group plans to shift an asset management business that helps buyout firms raise funds to its First Boston spinout as the firm works to reshape its investment bank after losses.

Internal discussions are taking place on moving the Private Funds Group, co-headed by David Klein in the United States and Michael Murphy in London, to First Boston later this year, people with knowledge of the matter said, asking not to be identified.

The group, which operates globally, raises private capital from investors such as public and private pension funds, sovereign wealth funds, endowments, fund of funds, and high net worth individuals and families.

The Zurich-based lender is in the midst of working out how to carve out its investment bank into the rebranded Credit Suisse First Boston and which businesses will be housed there. After a string of losses, it’s seeking to focus on areas of traditional strength such as capital markets, advisory and leveraged finance businesses. The funds group already worked closely with investment bank clients.

The Private Funds Group acts as a private placement agent focusing on primary fundraising and advisory on secondary activities. It has 77 employees based in major financial hubs including Hong Kong, New York, and London.

Credit Suisse declined to comment.

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Credit Suisse First Boston is set to be a partnership model, with key employees having a level of ownership. The Swiss bank plans to maintain a majority stake initially, but reduce its holding at a later stage.

It has already secured a commitment from an unnamed investors for a US$500 million injection into the business and is holding discussions with other parties for equity stakes, capital injections or balance sheet partnerships. BLOOMBERG