NEW YORK - Credit Suisse Group's newly created investment bank, CS First Boston, will advise on mergers and acquisitions, raise capital for clients through equity and debt markets, and provide leveraged finance as part of its core offerings, according to an internal memo seen by Reuters.
"CS First Boston will be global with a presence in all regions where it has a competitive advantage," David Miller, global head of CS First Boston, wrote in a memo to staff.
The unit will be carved out of the Swiss lender.
"Over time, CS First Boston’s structure will evolve to become an independent standalone investment bank, enabling it to attract third party capital and include employee ownership," Miller wrote. The move to become "an M&A boutique with capital markets expertise" will start immediately, he wrote.
The Swiss investment banking and capital markets business will be moved to the company's Swiss Bank to offer services in its home market, according to the memo.
Credit Suisse announced on Thursday it would raise 4 billion Swiss francs ($4 billion) from investors, cut thousands of jobs and shift its focus from investment banking toward rich clients as the bank attempts to put years of scandals behind it, sending its shares sliding.
The company's plan to scale back its investment bank and reallocate capital to its global wealth management business will involve substantial execution risk, according to Fitch Ratings.
However, if the restructuring is successful, it could make Credit Suisse's earnings less volatile, Fitch said. The bank has traditionally allocated a bigger share of capital to investment banking than its global peers, according to the ratings agency.
Ken Hao, chairman and managing partner of private equity firm Silver Lake, said it looks forward to working with CS First Boston.
"We have worked with the team at CS First Boston for many years, and they have provided innovative financing solutions for Silver Lake portfolio companies such as Dell, Alibaba and Broadcom," he told Reuters via email.
CS First Boston will maintain strong ties to Credit Suisse Group, according to the memo. The unit will work with the Swiss bank's markets business, particularly in cash equities, equity derivatives and securities research, it said.
It will also work closely with Credit Suisse's wealth management business to offer share-backed lending and structured credit to clients in Asia.
(Reporting by Saeed Azhar in New York Editing by Lananh Nguyen and Matthew Lewis)