Bloomberg News

Credit Suisse Said to Scrap $1 Billion Fund With Sberbank

December 07, 2012

Credit Suisse, Sberbank Said to Scrap $1 Billion Buyout Fund

Credit Suisse said in October it would seek to cut a further 1 billion francs ($1.07 billion) in annual costs by the end of 2015. Photographer: Gianluca Colla/Bloomberg

Credit Suisse Group AG (CSGN) and OAO Sberbank canceled plans to create a $1 billion private-equity fund in Russia because of lack of interest from investors, two people familiar with the decision said.

Credit Suisse is also scaling back operations globally and Sberbank doesn’t have the expertise of its own, said the people, who asked not to be named because the decision is confidential. Monika Sasse, a spokeswoman for Credit Suisse, and Anastasia Vakhlamova, spokeswoman for Sberbank, declined comment.

Credit Suisse, the second-biggest Swiss bank, and state-run Sberbank, Russia’s largest lender, planned to contribute about $100 million each to the fund and raise the rest from investors, Sberbank Chief Executive Officer Herman Gref said in an interview last year. Credit Suisse said in October it would cut a further 1 billion francs ($1.07 billion) in annual costs by the end of 2015 to help deal with the impact of the global economic downturn on its margins.

The Zurich-based bank, which has operated in Moscow since 1991, is moving its Russian capital-markets and advisory businesses to London as part of the cost reductions, two people with knowledge of the matter said this week. Russian equities, fixed income and private banking will remain in Moscow, said the people, who asked not to be identified because the information hasn’t been made public.

“Credit Suisse remains committed to its clients in Russia,” the company said in an e-mailed statement on Dec. 5. “This involves realigning resources to growth areas and adjusting capacity to meet client needs and to manage costs.”

Russian Growth

Russian lenders are seeking to attract foreign private- equity capital and expertise from abroad to help boost their profits and spending power.

Last year, VTB Capital, a unit of Russia’s second-biggest bank VTB Bank OJSC (VTBR), partnered with Texas-based TPG Capital to buy supermarket chain Lenta LLC for $1.1 billion. Baring Vostok, the Russian private-equity firm co-founded by former Salomon Brothers oil banker Michael Calvey, in October raised $1.5 billion, the largest amount amassed for deals in Russia.

Andreas Boesenberg, deputy global head of private equity at VTB Capital, said his bank is considering setting up its first private-equity fund.

“At some point in 2013 we will get active in fund- raising,” Boesenberg said by telephone from Moscow today.

To contact the reporter on this story: Jason Corcoran in Moscow at jcorcoran13@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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