To align interests, Michael Klein will receive equity in CS First Boston in the form of a convertible note.

Credit Suisse has taken further steps to progress the carveout of CS First Boston through the acquisition of The Klein Group (MK&C), the investment banking business of M. Klein & Company, for a purchase price of $175 million, according to a media release on Thursday.

The seller, Michael Klein, will receive equity in CS First Boston in the form of a convertible note. In addition, Klein has been appointed CEO of banking and CEO of the Americas and designated CEO of CS First Boston.

He will join the executive board and report directly to Group CEO Ulrich Körner.

Carveout of CS First Boston

The carveout of CS First Boston is expected to create an independent capital markets and advisory-led business, headquartered in the US, with global capabilities and a preferred long-term partnership with Credit Suisse. CS First Boston, with its differentiated proposition and partnership model, is expected to be more global and broader than existing investment-banking boutiques, more focused than bulge bracket players, and to be competitive in attracting and retaining top talent, the Swiss firm said.

MK&C, which is based in New York and employs approximately 40 professionals, has advised on transactions worth over $1.5 trillion since its formation in 2010. 

The MK&C team will integrate with, and is expected to enhance, the management and advisory capabilities of CS First Boston.

Veteran on Wall Street

Klein has over 35 years of investment banking and strategic advisory experience. In October 2022, he stepped down from the Credit Suisse board of directors, which he joined in 2018. He was previously CEO of Citigroup’s institutional businesses, overseeing the bank’s corporate, institutional and government businesses.

Following the acquisition’s closing, MK&C is expected to be fully integrated into CS First Boston. Credit Suisse will retain control over the ultimate scope and structure of CS First Boston, including options to attract third-party capital in the future, as announced at the bank’s strategy update on October 27, 2022.

Klein’s appointment to the Credit Suisse executive board and Credit Suisse’s acquisition of MK&C are subject to regulatory approvals, with the transaction expected to close in the first half of 2023.