Credit Suisse has moved its Corporate Credit Solutions (CCS) unit into its asset management business in the US. The Swiss bank has also recently filed an N-2/Aform with the Securities and Exchange Commission to register a business development company. The firm is proposing a maximum aggregate offering price of $500 million at $10 per share, according to the filing.
The filing lists John Popp (pictured) as the interested director of the BDC. He has been chief executive and president of CCS since it was moved to the asset management business in August. He was previously global head and chief investment officer of the bank's credit investments group.
Credit Suisse declined to comment on the new BDC but in a public job advertisment the lender described its plans.
“Credit Suisse Corporate Credit Solutions has approximately $225 million of assets under management and is currently 100 percent owned by Credit Suisse. We expect to grow assets under management significantly by entering into a credit facility with a commercial banking institution and raising incremental equity capital from institutional and retail investors. CSCCS expects to elect to be regulated as a business development company (BDC) under the 1940 Act and will become a publicly filing private BDC in Q1 2015.”
The filing outlines the group's plans to invest in a variety of industries, typically over a period of three to ten years with commitment sizes ranging from $5 million to $50 million. The BDC will invest in mid-market companies, typically defined as those with annual EBITDA of $5 to $75 million. CSAM said it sees a lot of opportunity in mid-market credit because of retrenchment by traditional lenders, borrower demand and appetite for exposure from end investors, according to the filing.
Credit Suisse Asset Management (CSAM) has also appointed two independent directors: Enrique Arzac who has been a professor of Finance and Economics at the Graduate School of Business at Columbia University in New York since 1971, and Steven Rappaport, who has been a partner of private investment group RZ Capital since 2002.
Portfolio management, meanwhile, is being handled by Jens Ernberg and Thomas Hall, who were transferred with the CCS group in August. Ernberg has been with the bank since 2007, and before joining the CCS team in 2011, he held a variety of distressed debt analysis, trading and sales roles. Hall has been with Credit Suisse since 2004, and was previously in the syndicated and mid-market leverage loans business at the bank, where he worked on originations, capital markets and sales, according to his LinkedIn profile.
The Swiss investment bank's US unit has recently been scrutinized by the Federal Reserve Bank and the Officer of the Comptroller of Currency for taking on too much risk in its leveraged loan business and potentially failing to comply with lending regulations, as has been widely reported by The Wall Street Journal and other publications.