Credit Suisse Races to Contain Archegos Hit With Capital Raising
Bloomberg 4 hrs ago Patrick Winters and Marion Halftermeyer
(Bloomberg) Credit Suisse Group AG moved to contain the fallout from two of the worst hits in its recent history with a surprise capital increase and a sweeping overhaul of its business with hedge funds.
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Switzerland’s second-largest bank is raising $2 billion from investors to shore up capital depleted by $5.5 billion in losses from the collapse of Archegos Capital Management. Chief Executive Officer Thomas Gottstein, who until recently had brushed off concerns that Credit Suisse was taking excessive risks, struck a humble tone Thursday, vowing to slash lending in the hedge fund unit at the center of the losses by a third.
Credit Suisse Raises $2 Billion as CEO Cuts Hedge Fund Unit
This content was published on April 22, 2021 - 11:14
April 22, 2021 - 11:14
(Bloomberg) Credit Suisse Group AG is raising $2 billion from investors and cutting the hedge fund unit at the center of the Archegos Capital Management losses as Chief Executive Officer Thomas Gottstein seeks to recover from one of the most turbulent periods in the bank’s recent history.
Credit Suisse, which has exited about 97% of its exposure to Archegos, expects a related 600 million-franc ($654 million) loss in the second quarter, taking the total hit from the collapse to about $5.5 billion. In response, it’s cutting about a third of its exposure in the prime business catering to hedge fund clients, while strengthening capital with the sale of notes converting into shares.
Credit Suisse Group AG is raising $2 billion from investors and cutting the hedge fund unit at the center of the Archegos Capital Management losses as Chief Executive Officer Thomas Gottstein seeks to recover from one of the most turbulent periods in the bank’s recent history. Credit Suisse, which has exited about 97% of its exposure to Archegos, expects a related 600 million-franc ($654 million) loss in the second quarter, taking the total hit from the collapse to about $5.5 billion. In response, it’s cutting about a third of its exposure in the prime business catering to hedge fund clients, while strengthening capital with the sale of notes converting into shares.
(Bloomberg) Credit Suisse Group AG is raising $2 billion from investors and cutting the hedge fund unit at the center of the Archegos Capital Management losses as Chief Executive Officer Thomas Gottstein seeks to recover from one of the most turbulent periods in the bank’s recent history. Credit Suisse, which has exited about 97% of its exposure to Archegos, expects a related 600 million-franc ($654 million) loss in the second quarter, taking the total hit from the collapse to about $5.5 billion. In response, it’s cutting about a third of its exposure in the prime business catering to hedge fund clients, while strengthening capital with the sale of notes converting into shares. Gottstein is battling to rescue his short tenure as chief executive officer after Credit Suisse was hit harder than any other competitor by the collapse of Archegos, the family office of U.S. investor Bill Hwang. The timing of the blowup could hardly have been worse, coming just weeks after Credit Suisse f
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