SoftBank said to have pulled investment from Credit Suisse funds

The SoftBank Group Corp. logo is displayed inside the lobby of a building which houses the company's headquarters in Tokyo, Japan, on Thursday, Nov. 29, 2018. Photographer: Kiyoshi Ota/Bloomberg

SoftBank has pulled a more than $500 million investment from Credit Suisse’s supply chain finance funds after the Swiss bank reviewed the funds including the Japanese conglomerate’s role, according to two sources.

The Swiss bank launched the review after the Financial Times reported last month that SoftBank had put $500 million into some Credit Suisse funds, which in turn invested in assets selected by SoftBank-backed lender Greensill Capital.

Some of the funds’ investments were in notes backed by loans Greensill made to other companies backed by SoftBank’s Vision Fund.

In a memo to the funds’ investors on Monday, the Swiss bank said it would change investment guidelines for its supply chain finance funds and said it had terminated an agreement with an investor in April for three of its four supply chain funds to exclusively source all of their notes through Greensill.

“This separate agreement has recently been terminated and the investor has redeemed its investment in full,” the bank said in the letter.

A source with direct knowledge of the matter confirmed that the investor which had terminated the agreement was SoftBank, and that the Japanese group had pulled its full investment from the funds.

A second source familiar with the case said more than $500 million was scheduled for redemption in July independently of the Credit Suisse investigation and had now been redeemed.

SoftBank declined to comment.

Greensill did not immediately respond to requests for comment made by phone and email.

The funds invest in notes backed by trade receivables, or claims for payment from a business to its suppliers for goods or services that have been invoiced. As payment delays may cause cash-flow problems for their suppliers, supply chain finance such as that provided by Greensill allows suppliers to collect on invoices early in exchange for a fee. Greensill will then collect on the value of the invoice from the buyer.

Credit Suisse said that while in practice all the funds’ investments had previously been sourced via Greensill, they were not precluded from sourcing them elsewhere.

Credit Suisse said that around 15% of the notes now held by its funds were backed by the obligations of companies in which the SoftBank Vision Fund has minority equity stakes.

It said it was changing its guidelines to reduce the maximum amount of exposure its funds would have to any one company, including those backed by the Vision Fund.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.