And Now A Liquidity Crunch: Credit Suisse Halts Redemptions From Renaissance Feeder Fund, by Tyler Durden

It’s smart to keep your eyes on situations like this. Financial crashes often start with one institution’s problems, which are “contained” until they’re not. From Tyler Durden at zerohedge.com:

Once upon a time, we couldn’t go an hour without some dire news involving Deutsche Bank (and its tens of trillions of gross notional derivatives). Now, it’s Credit Suisse’s turn.

In what was at least the third flashing-red headline for the day referencing the scandal-plagued Swiss Bank, moments ago Bloomberg reported that Credit Suisse, still humiliated from the billions it lost on Archegos and Greensill and countless subsequent banker terminations and defections, has temporarily barred clients from pulling their cash from a feeder fund that that was sold as an investment option for rich clients at the bank’s wealth arm, and which invests with Renaissance Technologies “after the strategy tanked and investors rushed to exit.”

To be sure, Credit Suisse has every right to impose this gate: according to Bloomberg, the Swiss bank invoked a hold back clause, after assets in the CS Renaissance Alternative Access Fund slumped to about $250 million this month from approximately $700 million at the start of 2020. While investors are expected to receive 95% of their redemption requests after two months, the remaining 5% is expected to be paid out in January, after the fund’s year-end audit, the people said. Hold back clauses are a standard part of offer documents at some U.S. based hedge funds.

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