Con of the Week: Greensill Capital



In finance there regularly appears a character who stands on a soapbox and claims to have re-discovered the natural laws of the universe. Go ahead, jump: with 10 shares of Invest-O, you won’t come down! Alan Greenspan’s declaration in the middle of the first tech bubble that we might be in the middle of a “once-or twice-in-a-century phenomenon that will carry productivity trends to a new higher track” helped birth the “new paradigm” theory, which denounced caution before investing in companies without revenues or plans as anachronistic timidity.

Greensill prophesied a revolution in his erstwhile dull trade. He hammered the theme that “AI” and “Big Data” were bringing about a “tectonic shift,” described by one writer as “the biggest revolution in history.” 

Author(s): Matt Taibbi

Publication Date: 19 May 2021

Publication Site: TK News

Behind Greensill’s Collapse: Detour Into Risky Loans



Behind Mr. Greensill’s failure: The business went beyond the scope of what it initially set out to do. Many of Greensill’s loans went to a small circle of borrowers close to Mr. Greensill, as well as acquaintances and his biggest outside backers.

A Wall Street Journal review of internal Greensill records, including board minutes and emails, along with interviews with more than a dozen people familiar with Greensill’s business, reveals how the company obscured its riskier loans behind a safe but barely profitable supply-chain finance business.

Greensill took on bigger, riskier long-term loans. In some cases, the loans were given other names before they were sold on to investors in the Credit Suisse funds, obscuring who the borrower was or the type of loan, the Journal found.

Author(s): Duncan Mavin, Julie Steinberg

Publication Date: 13 March 2021

Publication Site: Wall Street Journal

Greensill Capital Tumbles Into Insolvency, Spreading Financial Pain



Greensill Capital filed for insolvency protection Monday, days after regulators took over its banking unit and Credit Suisse Group AG froze investment funds that were critical to the startup’s operations.

The unwinding has rippled to holders of the Credit Suisse funds, German municipalities that deposited money with Greensill’s bank, and a high-profile duo of venture-capital investors.

Greensill specialized in supply-chain finance, a type of short-term cash advance to companies to stretch out the time they have to pay their bills. The firm was once worth $4 billion based on investments from SoftBank Group Corp.’s Vision Fund. The collapse marks a high-profile blow for the mammoth Japanese investor.

Author(s): Julie Steinberg, Duncan Mavin, Patricia Kowsmann

Publication Date: 8 March 2021

Publication Site: Wall Street Journal

Greensill Capital planning to file for insolvency in U.K. this week



Embattled financial startup Greensill Capital plans to file for insolvency in the U.K. this week, as it simultaneously moved toward a deal to sell its operating business to Apollo Global Management APO, -1.69%, according to people familiar with the matter.

The deal with Apollo, which could be struck by the end of the week, would be part of a Greensill insolvency, similar to the U.S. bankruptcy process, the people said.

The Wall Street Journal previously reported the two sides were in talks for a deal that would pay Greensill around $100 million. Through the acquisition Apollo would take over Greensill’s core operations and inherit clients that generate around $7 billion in assets, according to the people familiar with the matter.

Author(s): Julie Steinberg and Ben Dummett

Publication Date: 3 March 2021

Publication Site: MarketWatch

Greensill Faces Possible Insolvency After Credit Suisse Suspends Investment Funds



Specialty finance firm Greensill Capital headed toward a rapid unraveling after Credit Suisse Group AG suspended $10 billion of investment funds that fueled the SoftBank Group Corp.-backed startup.

With a key source of financing frozen, Greensill appointed Grant Thornton to guide it through a possible restructuring, and it could file for insolvency, the U.K. equivalent of bankruptcy, within days, according to people familiar with the company.


U.K.-based Greensill is the brainchild of former Citigroup Inc. and Morgan Stanley financier Lex Greensill. Founded in 2011, Greensill specializes in an area known as supply-chain finance, a form of short-term cash advance that lets companies stretch out the time they have to pay their bills.

Greensill packages those cash advances into bondlike securities that give investors a higher return than they could get from bank deposits. Credit Suisse’s funds were a major buyer of those securities.

Author(s): Julie Steinberg, Duncan Mavin, Ben Dummett, Maureen Farrell

Publication Date: 1 March 2021

Publication Site: Wall Street Journal