The ex-GAM boss reportedly plowed more than $9 million into Greensill – and was paid until its collapse two months ago.
David Solo lent then-fledgling Greensill Capital a $12.2 million ($9.3 million) as the supply chain finance firm was getting started in 2014, the «Financial Times» (behind paywall) reported on Tuesday.
The ex-GAM CEO and veteran of both UBS and Julius Baer remained an adviser to Greensill, earning $400,000 annually, until its collapse in March. Solo's role in linking up Lex Greensill to Credit Suisse, reported by finews.com eight weeks ago, was fateful for the Swiss bank.
Enthrall Of Solo
It is now grappling with both the supply chain blow-up as well as – separately, a short time later – $4.7 billion in losses on Archegos. The twin issues have led to a strategy, risk, and culture review under new Chairman António Horta-Osório.
The «FT» suggests that Greensill's business would never have expanded to the extent it did without Solo, to whom a large part of Switzerland's banking establishment remains to enthrall. Solo, who stepped down at GAM the same year he invested in Greensill, was key to introducing Greensill both at the Swiss asset manager and then later at Credit Suisse.
Major Misstep
Greensill repaid Solo's initial investment in 2016, ironically by using financing provided by GAM, according to the «FT». Greensill's collapse has roiled not just finance, but an industrial empire from Europe to Australia amassed by Sanjeev Gupta. It has also reverberated through Britains' corridors of power: ex-PM David Cameron was an advisor to Greensill.
For Solo, Greensill represents a major misstep in an otherwise largely unblemished career, much of it alongside ex-UBS leader Marcel Ospel. Last year, a quantitative fund overseen by Solo, was quietly folded into co-owner Credit Suisse's wider business after it foundered in market ructions at the onset of the pandemic, as finews.com reported.
