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CSFB to spin off buy-out funds

Credit Suisse First Boston plans to spin off some of its private equity funds to reduce potential competition with clients. The bank has said it will spin out its Merchant Banking Partners business, its Credit Opportunities Fund and the Diversified Credit Strategies Fund but is planning to maintain a significant financial interest in these funds.

Zurich-based Credit Suisse Group has been restructuring several parts of its business to increase profitability. According to reports, Credit Suisse is planning to drop the name First Boston from its investment banking side of the business.

Oswald J Grübel, CEO of Credit Suisse Group, said, 'Our operating environment has changed fundamentally over the past few years. Clients require increasingly sophisticated services and advice that are tailored to their specific needs. This means that now - more than ever before - we must bring together all the know-how in our entire company to offer our clients the professionalism and expertise they demand.'

'In addition to creating distinct lines of business that are focused on client needs, the steps involved in creating a 'one bank' organisation will require substantial changes in our management approach and also in our culture - with a much greater focus on the Group as a whole than is presently the case. This will be a gradual process that cannot be achieved overnight. We will implement our plans as quickly as is practicable - but also very carefully to avoid any disruption to our client service.'

Other big investment banks, such as Morgan Stanley, have also spun off captive funds that could be seen as competing with important clients over the course of the last couple of years.

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