Credit Suisse’s Greensill Funds Strayed From Tame Invoice Loans
- Funds slowly moved to financing future sales as assets grew
- The shift could now leave fund investors facing losses
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Credit Suisse Group AG marketed its popular supply chain finance funds as among the safest investments it offered, because the loans they held were backed by invoices that would be paid in a matter of weeks.
But as the funds grew into a $10 billion strategy, they strayed from that pitch and much of the money was lent through Greensill Capital against expected future invoices, for sales that were merely predicted, according to people with knowledge of the matter. Now, investors in the frozen funds are left facing the potential of steep losses as the assets are liquidated.