Credit Suisse’s new investment bank will create a partner level above its existing managing directors, providing a senior rank for top deal makers.
Between 50 and 100 existing CS First Boston managing directors are up for partnership in the boutique’s new organizational structure, which will be similar to that of banks like Goldman Sachs, executives said this week at an off-site meeting, according to people who attended the presentations.
The meeting in New York was attended by some 300 managing directors, said the people, who asked not to be identified discussing the private matter. Topics included marketing, the bank’s private equity and leverage finance competitive advantage, and strategies for Asia and Europe, the people said.
Scheduled guest lecturers included Apollo Global Management co-President Jim Zelter and Andrew Liveris, Lucid Group chairman and a board member of Saudi Aramco, the people said. Credit Suisse Chairman Axel Lehmann and board member Blythe Masters also attended, the people said.
A Credit Suisse spokesperson declined to comment.
Michael Klein, CS First Boston chief executive officer and a former Credit Suisse board member, said in a previous town hall with employees of all levels that the new venture would be owned and operated by everyone in the room, according to people who attended.
At that gathering, Klein attempted to rally staff to support the planned overhaul, and pledged that the new “super boutique” would be profitable, meaning that this year’s bad bonus round won’t happen again.
The planned purchase of Klein Group, CEO Klein’s own investment-banking boutique, sets up the veteran deal maker with a stake in the business once it’s spun off or listed publicly. Credit Suisse agreed to buy the firm for $175 million, with full consideration valued at $210 million, and plans to merge with CS First Boston. Klein took his payment for the boutique entirely in phantom shares.
The bank is also lining up investors in the new venture. Private equity firms including Apollo are considering taking a stake, people familiar with the matter have said.
Earlier this week, Credit Suisse slumped to a fresh new low after Bloomberg reported it was offering deposit rates significantly higher than those of competitors in an attempt to recoup assets following a run of departures among senior bankers.
In February, the Zurich-based bank posted a fifth-straight quarterly loss, with losses in the fourth-quarter totaling 1.39 billion Swiss francs ($1.48 billion). Additionally, the bank lost 110.5 billion Swiss francs worth of assets during the final three months of 2022.
–With assistance from Shannon D. Harrington and Joel Leon.