Apollo in talks for stake in resurrected CSFB – WSJ
By Geoffrey Smith
Investing.com — Apollo Global Management (NYSE:APO) is in talks to take a stake in the investment banking unit that Credit Suisse (SIX:CSGN) is spinning off as part of its radical restructuring, according to The Wall Street Journal.
The WSJ said Apollo is one of a handful of potential investors looking at the spin-off, which will revive the name of CS First Boston under the leadership of veteran Citigroup (NYSE:C) dealmaker Michael Klein. The beleaguered Swiss institution said in November it will effectively withdraw from investment banking to concentrate on its wealth management and Swiss retail businesses.
A direct investment would build on a deal between the two three months ago, under which Apollo agreed to buy a significant part of Credit Suisse’s securitized products book and manage another $20 billion in assets for five years. That deal is expected to close in the first half of this year.
Apollo, one of the world’s largest money managers, has over $500B of assets under management, and an equity stake in the new CS First Boston per se is unlikely to move the dial for its own earnings. However, it promises to add to the group’s capabilities the fixed-income markets, which are set for a new investment cycle as the Federal Reserve approaches the end of a campaign to tame inflation with higher interest rates.
CS has already said it will seek outside investors to help raise capital for the new CS First Boston, which is likely to focus on the relatively capital-light business of advising companies on M&A work to start with.