Credit Suisse freezes four funds invested in supply chain finance

Credit Suisse has frozen four funds in its asset management unit that had invested in its supply chain finance strategy as it grapples with the fallout from the collapse of $10.1 billion worth of funds linked to British financial services firm Greensill Capital.

Switzerland’s second-biggest lender is facing questions from regulators and insurers as it contends with the insolvency of Greensill, for which it acted as a key source of funding.

On Wednesday it told employees the head of its asset management arm, which sold the Greensill-linked supply chain finance funds to investors, would temporarily stand aside along with two colleagues.

In a note to investors on Tuesday, the Swiss bank said its board had decided to temporarily suspend the four Luxembourg-based funds that held investments in the supply chain finance funds it wound down last week. It related the decision to current difficulties in establishing an accurate price for the supply chain-linked shares these four funds held.

The affected funds are Credit Suisse (Lux) Multi Strategy Bond Fund, Credit Suisse (Lux) Multi Strategy Alternative Fund, Credit Suisse (Lux) Qatar Enhanced Short Duration Fund and Credit Suisse (Lux) Institutional Target Volatility Fund.

The funds held around $1.2-$1.3 billion as of Feb. 26, figures showed, and held between 2.24% and 9.59% of their assets in the defunct supply chain finance funds, amounting to just over $100 million of their assets.

“Various options for reopening of the funds for subscriptions, redemptions, and conversions as soon as possible are currently being considered,” it said.

The decision took effect on March 1, it said.