Fund outflows of US$4.4 billion at Credit Suisse since deal with UBS

CLIENTS of Credit Suisse pulled US$4.4 billion from US and European funds since the lender agreed to be acquired by rival UBS last month, with recent inflows suggesting the worst of the bleeding may be over.

Credit Suisse’s European funds suffered US$3.8 billion in net redemptions between Mar 20 and Apr 6, while another US$575 million went out the door of US funds, according to data from Morningstar.

The figures only include funds that report daily numbers, and do not represent the full universe of Credit Suisse asset management.

The outflows underscore the challenge for the combined firm to retain clients, after UBS agreed to acquire its local rival in an emergency, government-backed takeover. UBS chairman Colm Kelleher has said it will likely take months to close the deal and as much as four years to complete the integration.

The largest daily outflows were recorded on Mar 21, two days after the transaction was announced, when US$813 million was pulled. Since then, redemptions have eased; about US$230 million came back on Apr 5 and Apr 6.

“Credit Suisse’s outflows are less than I would have expected,” said Johann Scholtz, an equity research analyst at Morningstar. The absolute number “sounds dramatic” but outflows are only around 2.5 per cent of the firm’s assets under management, he added. BLOOMBERG