SoftBank takes out US$700m from Credit Suisse debt funds: sources

[LONDON] Masayoshi Son's SoftBank Group has redeemed US$700 million from Credit Suisse Group funds that invest in loans arranged by billionaire financier Lex Greensill, according to a people familiar with the matter.

The redemption comes after Switzerland's second-largest bank completed a review into its supply-chain finance funds to address investor concerns about possible conflicts of interest. The funds hold short-term corporate loans and have financed a number of startups backed by SoftBank's Vision Fund.

The Wall Street Journal reported the redemption earlier. A spokesperson for SoftBank declined to comment, while a spokesperson for Mr Greensill said the firm welcomed the review into the funds.

"We have built a very strong partnership with Credit Suisse over the past four years and are proud that the supply chain finance funds have delivered consistently strong returns for investors during this time," he said.

A representative for Credit Suisse said investors had been updated about the bank's review and measures it added to protect investors' interests.

Former Morgan Stanley banker Mr Greensill partnered Credit Suisse in 2017 to create the bespoke investment funds that bought corporate invoices. While the funds quickly drew billions in investment, they have been hit this year by outflows as the spread of the coronavirus roiled global economies.

The idea was for such funds to buy loans - arranged by middlemen such as Mr Greensill - so companies can pay their bills early while boosting cash flow. Credit Suisse clients pulled US$1.6 billion from the funds earlier this year, as they rushed to free up cash in the market rout spurred by the pandemic, Bloomberg reported in April.

BLOOMBERG