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Credit Suisse stems asset bleed

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SWITZERLAND - After major asset outflows in the first three months of this year Swiss bank Credit Suisse has reported more positive figures for Q2, though all is not yet well.

Net new assets at Credit Suisse's asset management sector continued to be negative though they were lesser outflows of CHF3.8bn (€2.3bn) for Q2 compared to outflows of CHF20.2bn in Q1.

However, a spokesman for Credit Suisse explained to IPE the continued outflows were mainly down to one large client, which had advisory mandates for pension funds, and was withdrawing CHF10bn in assets.

"This is not our core business so the impact on our results is not that big," the spokesman claimed.

He pointed out inflows to its core sectors of business such as alternative and money market investments were strong with inflows of CHF7.5bn and CHF6.8bn respectively.

"We saw outflows mainly from our equity funds - similar to the rest of the market - as clients moved into cash positions in the current market environment," he noted.

However, he added Credit Suisse is certain the asset management division will be back on track under the new management and new strategic positioning, and with fresh focus on traditional equity and bond funds, multi-asset class solutions and alternative investments.

Credit Suisse Asset Management hired Rob Shafir to run this division at the beginning of April. (See earlier IPE article: Wednesday people roundup)

The spokesman also explained inflows from Swiss pension fund clients continued to be positive but suggested these clients are traditionally not accounted for within the asset management operation but under the corporate banking division of Credit Suisse, which had inflows of CHF2bn compared to CHF3.6bn in Q1.

The bank confirmed these inflows were "mainly from the institutional pension fund business".

Assets under management in the asset management division remain stable at CHF605bn compared to CHF600.4bn in Q1 but were down CHF144.6bn, or 19.3%, from the end of Q2 last year.

Credit Suisse noted these figures primarily reflect "net new asset outflows and adverse foreign exchange-related and market movements".

Assets under management for the whole group now stand at CHF1.41trn slightly up from Q1's CHF1.38trn but down 13.3% from the end of Q2 2007 with CHF1.7trn.

Meanwhile, rival firm Julius Baer also noted it has seen a decline in assets under management by its two specialist asset management divisions GAM, a boutique specialising in alternatives and active management, and Artio Global, Julius Baer's US asset management division.

Assets for the group's asset management division fell 17% to CHF142bn in the first half of this year, including net outflows of CHF1.4bn.

Julius Baer noted this was down to "a combination of negative equity returns, a challenging transition in the investment area for hedge fund-strategies and a currency exchange rate influence".

If you have any comments you would like to add to this or any other story, contact Julie Henderson on + 44 (0)20 7261 4602 or email julie.henderson@ipe.com

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