Market Overview

Credit Suisse Silently Invested $100M In Alibaba Subsidiary Ant Financial, Set To Benefit Immensely In Public Debut

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Credit Suisse Silently Invested $100M In Alibaba Subsidiary Ant Financial, Set To Benefit Immensely In Public Debut

Credit Suisse Group AG (NYSE: CS) is set to reap the benefits of a secret investment it made in Alibaba Group Holding Ltd. (NYSE: BABA) subsidiary Ant Financial Services Group, as the latter goes public in Hong Kong and Shanghai, Bloomberg reported Sunday.

What Happened

The Swiss bank invested $100 million during the Chinese financial firm’s latest funding round in 2018, which brought Ant’s valuation to $150 billion, according to Bloomberg. Asset management firm Bernstein projects Ant Financial's valuation to be $210 billion, a premium of 40% over Credit Suisse's investment.

The lender didn't previously disclose the amount it invested in Ant and does not have plans to sell its stake, people familar with the matter told Bloomberg.

Why It Matters

Credit Suisse is likely to act as a joint global coordinator for the Hong Kong Ant Financial IPO after it was reportedly left out of an initial list of sponsors, the people said.

The bank has long-standing relations with the Jack Ma-led group. It has handled 30 deals within the group and advised Alibaba on $14 billion worth of acquisitions, according to Bloomberg.

Credit Suisse is also an investor in South Korea's L&P Cosmetics Co. and India's Hero Fincorp Ltd.

Other banks, including Goldman Sachs Group, Inc (NYSE: GS) and China International Capital Corp (OTC: CNICF), have also been looking to reap profits through investments in technology sector firms, Bloomberg noted.

Price Action

Credit Suisse shares closed 0.28% lower at $10.57 on Friday. Alibaba shares closed 1.1% lower on the same day, further extending losses by 0.2% at $248.50 in the after-hours session.

Photo courtesy: Credit Suisse Group AG
 

 

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