ZURICH (Reuters) - Swiss hedge fund operator and Credit Suisse (CSGN.S) investor RBR Capital Advisors has shifted focus to shareholder activism, arguing that Switzerland’s second-biggest bank can create “enormous” value by replacing its IT platform and cutting jobs.
“After almost 15 years of operations, we have decided to close our RBR European Long Short Funds and focus our activities on activist investing,” the group, run by financier Rudolf Bohli, said in a statement posted on its website.
RBR — which has proposed breaking up Credit Suisse, whose management dismisses the need for such a radical step — had flagged such a move in December.
The Financial Times said at the time that RBR might close two long-short equity funds and redirect investments into a special situations fund that has invested more than 100 million Swiss francs (74.58 million pounds) in Credit Suisse. RBR had in total around 250 million francs in investments.
In a mail to investors seen by Reuters that included the line “Let’s make Credit Suisse great again”, RBR said Credit Suisse’s flagship wealth management business had too many staff in support functions and external contractors.
“We have proposed a simple solution to solve this problem: build a new IT platform on a green field and gradually transfer all existing customers to the new platform,” it said.
To date, Credit Suisse’s board and management have instead pursued a “path of small gradual improvement”, it added, saying the bank risked falling behind rivals.
RBR said it was convinced it was proposing the right strategy to transform Credit Suisse in the digital age.
“The value creation potential is enormous and goes far beyond the doubling of the share price, which we initially communicated,” it added.
Credit Suisse declined to comment
Swiss rival UBS (UBSG.S) said on Monday it had spent 3.2 billion francs last year on strategic initiatives and IT programmes.
“Our investments will add a total of around 1 billion to our IT costs over the next three years, with a growing proportion related to strategic initiatives rather than regulatory projects,” CEO Sergio Ermotti said.
He forecast these expenses would remain slightly above 10 percent of revenue in the near future.
Reporting by Lawrence Delevingne and Oliver Hirt, Writing by Michael Shields; Editing by Kevin Liffey