Financial services giant Credit Suisse is in talks with Chicago, US-based Mesirow Financial Holdings about buying its hedge fund business for $11 billion (Ôé¼7 billion).
Zurich, Switzerland-based Credit Suisse, which manages around CHF15 billion (Ôé¼10 billion) under its own hedge fund unit, is seeking to purchase MesirowÔÇÖs Advanced Strategies division, which places client money in hedge funds. It currently has around $11 billion in assets.
The Chicago, Illinois-based firm also has holdings in property, private equity funds and commodities. The hedge fund unit makes up around a third of its total assets.
Founded in 1937, the company also sells insurance and conducts investment banking operations. It has branches across the country and one in London, UK.
Credit Suisse is reportedly looking to expand its alternative investments, including hedge funds, property and private equity.
It is said to be particularly attracted to MesirowÔÇÖs unit as it has a strong focus on AsiaÔÇöa market that Credit Suisse is seeking to break into. In addition, expanding its hedge fund operations will enable it to earn more in fees.
Hedge funds are currently attracting higher business costs with the advent of more stringent regulation, which in turn drives fees down and increases client scrutiny of funds.
With one of the largest private banking businesses in Europe, Credit Suisse employs 48,000 worldwide and in 2008 had revenues of CHF9.2 billion (Ôé¼6 billion).
The talks are currently in the early stages, and no decision has yet been reached, according to reports.
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