Mon, Oct 23, 2017 - Page 14 News List

Credit Suisse split activist ‘confident’ about backing

BREAKING UP:The initiator of a proposal to split the bank into three parts said many investors saw an opportunity, but some of them said his numbers were a ‘pie in the sky’

Bloomberg

Rudolf Bohli, an activist hedge fund manager pushing for a breakup of Credit Suisse Group AG, said he is in talks with more than 150 potential investors with the goal of raising 1 billion Swiss francs (US$1.02 billion) for his campaign.

Bohli, whose firm, RBR Capital Advisors AG, currently manages about SF250 million, said that most of the potential backers he pitched on his idea are not Credit Suisse shareholders, adding that he was confident he could raise the funds in coming months based on those discussions, without providing details.

“There is a huge interest in this because the whole banking sector has not been disrupted really,” Bohli said in an interview. “A lot of the investors we talk to see this opportunity.”

Bohli, whose firm owns about 0.2 percent of the Swiss lender, is urging Credit Suisse to be split into three companies, arguing that such a move would double the bank’s current market value of about SF40 billion.

His plan has been dismissed by the company and its biggest shareholder, Harris Associates, which owns 9 percent of Credit Suisse.

Harris partner David Herro has said that while elements of the proposal should be looked at, Bohli’s valuations were “pie in the sky” and the investor has too little “skin in the game.”

“We are fully supportive of the Credit Suisse management and do not support RBR’s plan to split up” the bank, Herro said by e-mail.

Bohli in a Bloomberg TV interview on Friday said that his discussions with Credit Suisse chief executive Tidjane Thiam had been “actually very friendly,” calling the CEO “a great guy.”

The investor said he believes Thiam will ultimately go along with his proposals.

Bohli, who on Friday presented his plan in public for the first time at the Robin Hood Investors Conference in New York, is hoping his strategy is attractive enough for investors to sign on to the idea.

He said that if shareholders, management and the board do not find merit in his plan, he would walk away.

“It’s not an ego trip,” Bohli said.

The Swiss lender two years ago started a restructuring led by Thiam, downsizing volatile trading operations and focusing more on managing money for the wealthy. A cornerstone of that strategy is to focus the investment bank more on the needs of the bank’s wealth management clients.

When asked about job cuts, Bohli said there would be some redundancies if his plan is implemented, but it would lead to more jobs in the long run, adding that Credit Suisse has too many traders.

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