Greensill Capital

Boring invoice finance that hid concentrated, under-insured, speculative lending.

Documented, foreseeable risks that were ignored anyway. The failure is attention, not information.

Room: Q1 Predictable
Year: 2021
Impact: $10B
Sector: Supply-chain finance
Region: Europe
Category: Economic

Why this room

Genuine reverse factoring is short-duration, high-volume and low-correlation, a textbook Q1 payoff; once Greensill swapped real invoices for "prospective receivables" concentrated in a handful of related borrowers and made the whole edifice depend on one insurer's signature, the payoff became complex and the tail became correlated and sudden, a Q4 profile wearing a Q1 label.

The record

Credit Suisse-managed Greensill funds froze roughly $10 billion on 1 March 2021certain
Greensill filed for insolvency on 8 March 2021 after failing to repay a $140 million Credit Suisse loancertain
Insurance cover of $4.6 billion, led by Bond and Credit Company (Tokio Marine-linked), lapsed 1 March 2021 after a Sydney court rulingcertain
By April 2022, Credit Suisse had returned $6.7 billion of the $10 billion to about 1,200 investors, with $2.7 billion still outstanding and $600 million held in reservecertain
GFG Alliance (Sanjeev Gupta) owed the funds about $1.3 billion; Bluestone Resources about $690 million; Katerra about $440 millionlikely
GFG Alliance's total borrowing from Greensill over time reached roughly $5 billionlikely
UK taxpayer exposure via British Business Bank COVID-loan guarantees estimated up to £335 million by the National Audit Officelikely
SoftBank Vision Fund invested about $1.5 billion in Greensill (2019), later written offlikely
In 2024, UBS bought out remaining Greensill-fund investors at 90 cents on the dollar and remained owed about $900 million by GFG-linked entitiesuncertain
David Cameron joined Greensill as an adviser in 2018 and lobbied Chancellor Rishi Sunak by text in April 2020 over access to a COVID lending facilitycertain

Sources

The book

This entry is one of 111 in the register. The full story, and what it cost the people who lived it, is in Risky Business by Claudia Zeisberger, David Munro and Joanna Reijgersberg-Siew.

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