Greensill’s charm,self-belief and supposed skill at turning the staid business of supply-chain finance into a booming source of cash had Softbank and Credit Suisse seeing dollar signs,as Duncan Mavin’s new book about the saga —The Pyramid of Lies — reveals.
For Son,whose Vision Fund dragged SoftBank to a recent record loss,taking an ownership stake in Greensill was meant to be a fintech home run. Here was a firm claiming to mix old finance with new data tricks,growing at breakneck speed and with apparently enough cash to prop up dreams such as investing in a new $US34 billion ($48.5 billion) city in Borneo.
For Credit Suisse,which was desperate to pivot away from financial trading and towards repeat revenues from high-net-worth individuals,investing client money in Greensill assets was a way to join an influential billionaire network and deliver big returns in a low-interest-rate world.
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Unfortunately,Greensill Capital was built like a house of cards and collapsed when COVID-19 hit. Revelations of reckless lending and dodgy conflicts of interest scared investors and insurers away. The money ran out,Son’s prized “fintech” unicorn was soon worthless,and Credit Suisse’s wealthy clients were billions in the red.
There will be doubtless more revelations to come as Credit Suisse prepares a legal claim against SoftBank in the hopes of recouping up to $US3 billion — one of several legal battles that will take years to resolve. SoftBank has called claims that it diverted money owed to the bank’s clients “desperate”.
Yet Mavin’s book makes clear that the cast of characters pulled into Greensill’s orbit have serious work to do to minimise the risk of a similar blow-up happening again one day. Many backers seemed all too eager to buy what the ego-driven,larger-than-life financier was selling,and they didn’t always do their homework. The book delights in exposing Greensill’s ludicrous affectations,including an oversized business card straight out of the filmAmerican Psycho.