A number of Credit Suisse Asset Management clients — none with holdings in the $10 billion of supply chain finance funds the firm said it is terminating — have no plans to make changes to their relationships with the money manager. But they'll still be watching the situation as it continues to unfold.
Executives at the pension funds said the terminations, which followed difficulties by the manager in reaching valuations and issues over insurance coverage related to now-collapsed financial services firm Greensill Capital, have no impact on their passive investments through CSAM.
Swiss federal pension fund PUBLICA, Bern, which had 41 billion Swiss francs ($42.2 billion) as of Dec. 31, 2019, has a relationship with CSAM in the passive equity space at about 5 billion Swiss francs, and with no investment in Greensill or any other alternative strategies offered by CSAM.
"Is CSAM now officially on watch? No," because the allocation run by CSAM is passive and separate to the supply chain finance funds. "And we're satisfied with what they're doing," said Stefan Beiner, head of asset management and deputy CEO.
But, "are we talking to them and monitoring what they're going to do with regards to their strategy, the reorganization of the unit? Yes, of course we do that. Being a large asset manager in (the) Swiss market, we would talk to them anyway" about any major changes and about the situation, whether or not they were a partner — a standard process, he added. The parent bank announced March 18 it was separating the asset management unit from the international wealth division and installing its own CEO.
PKSBB, for which CSAM runs overlay, passive equity, passive bonds and real estate allocations, according to its 2019 annual report, is following the recent developments "with interest," said Patrick Zuber, chief operations officer at the fund. There are no exposures to Greensill products.
"Regarding our mandates, we currently do not see immediate need for action. The development will be monitored and considered when discussing all our managers in the regularly held investment committee," Mr. Zuber added.
Patrick Fleming, CIO of the Wyoming State Treasurer's Office, said the situation has been discussed with senior management and executives "will be monitoring the situation as it progresses. At this point, we do not have plans to change our allocations," he said. The Wyoming State Loan and Investment Board, Cheyenne, hired CSAM to run a $500 million bank loans investment in 2019. Mr. Fleming oversees the state's $19.5 billion in non-pension assets.
Other pension fund executives for which CSAM runs passive allocations said they have no intention of putting the firm on watch.