Credit Suisse is reportedly stuck with an illiquid stake in Ant. The Swiss bank was part of an exclusive circle to plow money into the Chinese fintech ahead of its planned, then scotched, listing.
The Swiss-based bank is among several large institutional investors including Blackrock, Warburg Pincus, and Singapore’s sovereign wealth fund GIC to be left holding the bag on Ant Financial, the «Financial Times» (behind paywall) reported on Friday.
Credit Suisse and other big names invested a total of $10.3 billion into Ant three years ago, in a «highly selective, offshore pre-IPO fundraising,» the outlet reported. Beijing put the kibosh on the listing in November.
No Ownership, No Vote
Specifically, Ant's investors put the funding into an offshore subsidiary, which doesn't actually own anything, the «FT» reported. They have no voting rights, and it isn't clear from Ant's IPO prospectus who paid what in the exclusive fundraising.
This has left the big-money investors in the dark about the political vagaries, Ant’s valuation, or when they might be able to monetize their stakes. A spokesman for Credit Suisse declined to comment.
«Leap Of Faith»
Credit Suisse is the only bank among the backers, which include Blackrock, tech investor Silver Lake, private equity firm Carlyle, and Singapore’s Temasek. The Swiss lender has long enjoyed «house bank» status with Alibaba billionaire Jack Ma but was relegated to a smaller role on the IPO, which was sponsored by China International Capital Corp., Citigroup, J.P.Morgan, and Morgan Stanley.
Some of the investors in the offshore fundraising are considering suing Ant, though this is an outside option as long as the reasons for the IPO's scrapping remain murky, the «FT» reported. «For international investors, the way the deal was structured was a real leap of faith,» the lawyer was quoted by the pink paper.
Chinese Stand-Off
Besides the offshore investment, Credit Suisse reportedly put roughly $100 million (behind paywall) towards Ant’s last regular equity funding round in 2018, which valued the fintech at $150 billion. Last month, the People’s Bank of China slammed Ant for «weak law-abiding awareness» and ordered measures including «return to its origins» in payment services.
Ma hasn’t been sighted in public in 12 weeks, leading to rampant speculation as well as unease over how China wields influence over the business. The stand-off has implications for foreign banks in China – where both Credit Suisse and UBS maintain deep investment banking, wealth management, as well as asset management ties.
