WSJ: Greensill's Problems Build
The Wall Street Journal writes "Greensill Problems Build as Regulator Watches Over Banking Unit," which says, "Pressure mounted on embattled SoftBank Group Corp.-backed Greensill Capital as it scrambled to sell core parts of its business and regulators intensified supervision of its banking unit.... [O]n Tuesday, a second fund manager, GAM Holding AG, barred investors from trading in and out of its Greensill-connected fund 'as a result of recent market developments' and related media coverage. It plans to wind down the $842 million fund and return the money to investors. Greensill's business model was upended Monday after Credit Suisse made a similar move, suspending $10 billion in investment funds that contain securities created by the financial startup. U.K.-based Greensill was founded in 2011 by Mr. Greensill, a former Citigroup Inc. and Morgan Stanley financier. It specializes in an area known as supply-chain finance, a form of short-term cash advance that lets companies stretch out the time they have to pay their bills." The piece explains, "Greensill packages the cash advances it makes to companies into bondlike securities. The GAM and Credit Suisse funds invested exclusively in Greensill-generated assets, selling them on to investors looking to eke out higher returns than they could get from traditional money-market funds.... The Wall Street Journal reported Monday that Greensill had hired restructuring advisers and could file for insolvency, the U.K. equivalent of bankruptcy, within days, a move that was sparked by the closure of the funds."
