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Former Citigroup Executive to Merge with Credit Suisse

Former Citigroup executive Micheal Klein looks to merge his boutique advisory firm with Credit Suisse’s investment bank, after the Swiss bank’s announcement of a radical restructuring. Klein plans to complete the deal for the newly formed CS First Boston - the investment banking affiliate of Credit Suisse, by mid-2023. Klein’s boutique, M Klein & Company, will be merged with the new bank and as well as running the business, he will receive a substantial amount of shareholdings as a result.

According to the chief executive Ulrich Körner, the bank has received a $500mn commitment from CS First Boston’s large investor. Moreover, the Saudi National Bank - which has agreed to buy SFr1.5bn of shares in Credit Suisse - has also said it could invest. Other investors are being recruited, while a certain portion of equity will be reserved to retain and attract top bankers to join the firm.

CS First Boston aims to compete with Wall Street’s leading boutique advisory firms such as Evercore, Moelis and PJT Partners. However, it will also have its own balance sheet and equity and debt underwriting capacity, making it more closely resembling a bank like Jefferies.

The deal would mark Klein’s return to the top of a prominent Wall Street business after his departure from Citigroup in 2008 when he was once considered a CEO contender. Alongside his boutique, M Klein & Company, Klein acts as an adviser to chief executives, corporations and governments on major transactions. The plan to do this deal has been in hyperdrive since June, when the bank’s senior leaders acknowledged that it was subscale to bulge bracket rivals like Goldman Sachs, JPMorgan, and Citi in trading and corporate banking. Credit Suisse and Klein declined to comment.

Written by Quynh Chi Le

Source: Financial Times

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