Greensill Capital

Greensill Capital was a financial services group founded in 2011 by Australian entrepreneur Lex Greensill. It built its business around supply-chain finance, particularly reverse factoring, in which a financier pays a supplier earlier than scheduled and later collects payment from the buyer. Greensill presented this model as a technology-enabled way to improve working-capital access for businesses and their suppliers. Over time, however, the group expanded beyond conventional invoice finance into accounts-receivable financing and what it called future accounts-receivables finance: lending against expected future sales and payments that had not yet occurred. That expansion increased the potential customer base but also exposed the company and its funding partners to greater credit and verification risk. The group operated through several related businesses. Greensill Capital originated and arranged financing, while Greensill Bank in Germany provided banking services and became subject to scrutiny from the German regulator BaFin. Greensill also financed its activities by issuing notes and arranging investment products, including supply-chain investment funds managed with Credit Suisse. The structure connected the company to institutional investors that expected receivables and insurance coverage to support the notes. The company’s business therefore depended not only on borrowers repaying but also on the continued availability of credit, insurance and investor confidence. Greensill attracted significant private capital. General Atlantic invested $250 million in 2018, and SoftBank’s Vision Fund invested $800 million in early 2019. The SoftBank investment supported rapid international expansion: the company reportedly grew from about 500 employees at the end of 2019 to more than 1,000 in early 2021, across sixteen offices. Greensill also developed relationships with companies associated with SoftBank and with the GFG Alliance, the industrial group linked to steel entrepreneur Sanjeev Gupta. These relationships later became central to criticism of the company’s risk concentration and governance. The business came under increasing pressure from 2020. Tokio Marine-led insurers withdrew or declined to renew coverage for billions of dollars of Greensill’s working-capital exposure. German authorities investigated Greensill Bank’s accounting and later restricted its activities. Questions also arose about Greensill’s use of future-receivables finance, its exposure to GFG Alliance, and the involvement of former British prime minister David Cameron, who had become an adviser and lobbied government officials concerning possible pandemic support for the company. In March 2021, Credit Suisse froze approximately $10 billion in supply-chain investment funds linked to Greensill products. Greensill was unable to secure sufficient replacement insurance or funding and could not repay a $140 million Credit Suisse loan. It filed for insolvency protection on 8 March 2021. A proposed sale of parts of the business to Athene Holdings did not complete. The collapse affected investors, borrowers, insurers, employees and public institutions, and led to investigations, litigation and parliamentary scrutiny in several jurisdictions. Greensill’s UK entity later entered Chapter 15 proceedings in the United States. The brand is now defunct, while administrators and creditors have continued to pursue recoveries and examine transactions made before the failure.

Greensill Capital emerged in 2011 under the leadership of Lex Greensill, initially focusing on supply-chain finance. Its core proposition was to use financing and technology to pay suppliers rapidly while allowing corporate buyers to settle obligations later. This model, commonly known as reverse factoring, could reduce supplier waiting times and provide buyers with working-capital flexibility. Greensill subsequently added traditional factoring and a more speculative product based on anticipated future receivables. The company’s expansion was funded through a mixture of equity investment, bank relationships, insurance and capital-market products. General Atlantic invested $250 million in 2018. SoftBank’s Vision Fund followed with an $800 million investment in early 2019. The capital helped Greensill increase its workforce and establish a presence in multiple countries. It also encouraged a growth strategy that connected the firm with large industrial borrowers and with investment products distributed to institutional investors. Greensill’s structure included Greensill Bank in Germany, which offered conventional banking services, and arrangements involving Credit Suisse-managed funds. Greensill issued notes linked to receivables, while the investment funds provided liquidity for its lending activities. Critics and later reports questioned whether some products were supported by sufficiently documented existing receivables or instead depended on uncertain future sales. The company’s exposure to businesses associated with SoftBank and to the GFG Alliance intensified concerns about related-party risk and concentration. In 2018, Greensill received substantial media attention over its involvement in controversies surrounding asset manager GAM. Former UK minister Lord Myners called for a formal investigation. The company later became politically prominent after former prime minister David Cameron joined as an adviser. Cameron lobbied government officials in 2020 about Greensill’s access to emergency pandemic financing. The episode became part of a wider debate about government access, lobbying and the movement of senior public officials into private-sector advisory roles. The group’s funding model deteriorated in 2020 and early 2021. Tokio Marine-led insurers stopped supporting a large portion of Greensill’s working-capital exposures. BaFin investigated Greensill Bank’s accounting and in March 2021 filed a criminal complaint and prohibited the bank from continuing activities. Credit Suisse then froze roughly $10 billion in funds holding Greensill-linked investments. Greensill explored a sale of its operating business, including discussions involving Athene Holdings, but the proposed transaction failed. On 8 March 2021, Greensill sought insolvency protection after being unable to repay a $140 million loan to Credit Suisse and facing defaults associated with GFG Alliance. The failure generated losses and recovery claims involving investors, insurers, banks and public institutions. Bluestone Resources brought a fraud lawsuit, and scrutiny extended to government-backed lending that Greensill had passed to companies connected with Sanjeev Gupta. Credit Suisse also faced internal consequences and broader reputational damage. Administrators subsequently pursued assets and claims, while inquiries examined the company’s accounting, insurance, lending practices, governance and political relationships. Greensill Capital remains defunct.

1. 2021Credit Suisse freezes linked funds

   Credit Suisse suspends approximately $10 billion in supply-chain funds connected with Greensill products.

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2. 2021Insolvency filing

   Greensill files for insolvency protection on 8 March.

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3. 2020Insurance and regulatory pressure intensifies

   Insurers move to withdraw coverage, while BaFin begins examining Greensill Bank’s accounting.

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4. 2019SoftBank Vision Fund investment

   SoftBank invests $800 million, enabling rapid international growth.

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5. 2018General Atlantic investment

   General Atlantic invests $250 million as Greensill expands its financing platform.

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6. 2011Greensill Capital is founded

   Lex Greensill establishes the company with an initial focus on supply-chain finance.

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Alternative working-capital and supply-chain finance provider offering faster supplier payments and receivables-based funding outside the traditional banking model.

• Supply-chain financeWorking-capital finance2011

  Greensill’s principal business paid suppliers before their contractual due dates, generally at a discount, and collected the full amount from the corporate buyer later. The product was promoted as a way to improve supplier liquidity and give buyers additional payment flexibility.

• Accounts-receivable financingReceivables finance

  Under conventional factoring arrangements, Greensill financed invoices that businesses had already issued to customers. The financier obtained repayment rights and received payment when the underlying customers settled their invoices.

• Future accounts-receivables financeStructured lending

  This offering provided funding before the underlying sale or invoice had occurred, relying on projected future transactions and expected payments. Because repayment depended on uncertain future activity, the product carried more risk than ordinary invoice financing and became a major focus of later criticism.

• Greensill Bank servicesBanking

  Greensill Bank, the group’s German subsidiary, offered banking services and was also an important source of regulatory and credit exposure. German authorities later restricted its activities and pursued investigations into its accounting.

• 2021Seek a sale of the operating businessOther

  After Credit Suisse froze funds and Greensill faced a severe liquidity crisis, the company explored alternatives to a direct insolvency filing.

  What changed. Greensill entered exclusive discussions involving Athene Holdings and related parties for a possible transaction.

  Aftermath. The proposed deal fell through on 12 March 2021, partly because the value of the loan book had weakened and other banks were taking over financing connected with Taulia.

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• 2021File for insolvency protectionOther

  Greensill could not replace withdrawn insurance, faced defaults linked to GFG Alliance and was unable to repay a $140 million Credit Suisse loan.

  What changed. The company filed for insolvency protection on 8 March 2021.

  Aftermath. The filing triggered asset recovery, litigation, regulatory investigations and losses or potential losses for investors and creditors.

  Loan Greensill was unable to repay. $140 million (March 2021)

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• 2020Pursue new funding and a possible public listingStrategy

  Greensill sought additional investors after its earlier expansion and reportedly targeted a new capital raise before pursuing an IPO.

  What changed. The company pursued between $500 million and $600 million of new funding and prepared for a possible listing within two years, while also ordering the sale of its four aircraft.

  Aftermath. The fundraising and listing plans were overtaken by insurance withdrawals, regulatory pressure and the eventual insolvency.

  Targeted fundraising. $500 million-$600 million (Late 2020)

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• 2019Accelerate international expansion after SoftBank investmentStrategy

  The Vision Fund investment provided substantial capital after Greensill had already expanded beyond its original supply-chain finance focus.

  What changed. Greensill expanded its workforce, offices and customer relationships and delayed consideration of some alternative fundraising routes, including a possible initial public offering.

  Aftermath. The accelerated growth increased the group’s scale but also increased its exposure to complex borrowers, funding partners and related-party relationships.

  SoftBank investment. $800 million (Early 2019)

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• 2021Collapse and investor lossesControversy

  The loss of insurance, Credit Suisse’s fund suspension, customer defaults and Greensill’s insolvency triggered investigations and potential losses for investors and creditors.

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• 2021David Cameron lobbying controversyControversy

  David Cameron’s lobbying of UK ministers for emergency financing became a major political controversy after Greensill’s collapse. The government released messages and commissioned an inquiry into the company’s access and lobbying efforts.

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• 2021Exposure to GFG AllianceControversy

  Greensill and Greensill Bank had substantial exposure to GFG Alliance and related companies. The concentration, including future-receivables lending, was linked by reports to the company’s financial distress.

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• 2021BaFin enforcement against Greensill BankControversy

  BaFin filed a criminal complaint and prohibited Greensill Bank from conducting activities after its investigation into accounting and financial conditions.

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• 2020SoftBank-related circular funding concernsControversy

  Reports raised concerns that SoftBank invested in Credit Suisse funds that financed Greensill, while Greensill financed companies backed by SoftBank. The arrangement was described as a circular flow of funding and raised questions about conflicts and concentration risk.

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• 2018GAM-related controversyControversy

  Greensill attracted media scrutiny over its involvement in a controversy at Swiss asset manager GAM. Lord Myners called for a formal investigation into the company’s role and relationships.

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• 2021Greensill UK enters Chapter 15 proceedings

  The company’s UK unit filed for Chapter 15 bankruptcy recognition in the United States during the wider insolvency process.

  Bankruptcy
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• 2020Tokio Marine-led insurers withdraw coverage

  Insurers covering approximately $4.6 billion of Greensill’s working-capital exposure indicated that coverage would end, weakening the company’s funding model.

  OtherRegulation
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• 2019SoftBank invests $800 million through Vision Fund

  SoftBank’s Vision Fund invested $800 million, supporting rapid expansion and delaying near-term fundraising and listing plans.

  M&A
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• 2018General Atlantic invests in Greensill

  General Atlantic invested $250 million in Greensill as the company expanded its supply-chain finance activities.

  M&A
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1. Greensill Capital