Credit Suisse Group AG temporarily prohibits clients from withdrawing all of their cash from a fund that invests with Renaissance Technologies after the strategy shifted and investors rushed out.
The bank invoked a withholding clause, after the assets of the CS Renaissance Alternative Access Fund collapsed to around $ 250 million this month, from around $ 700 million at the start of 2020, according to people with knowledge of the matter . While investors will receive 95% of their redemption requests after two months, the remaining 5% is expected to be paid in January, after the fund’s year-end audit, the sources said.
The fund lost around 32% last year, in line with the decline of the Renaissance Institutional Diversified Alpha Fund International in which it invests, the sources said. Renaissance, considered one of the world’s most successful quantitative investment firms, was rocked by billions of dollars in buybacks earlier this year after unprecedented losses in 2020. Three of its funds open to outside investors have fell to double digits last year.
Credit Suisse and Renaissance declined to comment.
Credit Suisse is currently under further scrutiny as new chairman Antonio Horta-Osorio reviews risk and control functions following the implosion of the bank’s supply chain finance funds linked to Greensill Capital and the collapse of the family office Archegos Capital Management.
The Credit Suisse feeder fund was sold as an investment option for wealthy clients in the banking arm of the bank.
The Renaissance fund, which allows investors to withdraw money on a monthly basis, also has the ability to hold back but does not invoke the clause and never has, according to a person familiar with the matter.
The fund rose 9.4% this year through May 21 after losses last year, the person said. Holdback clauses are an integral part of the offering documents of certain US-based hedge funds.
Read more: Renaissance clients quit after streak of anemic company results
– With the help of Donal Griffin