Capital Group Companies Ups Stake in Credit Suisse to 5%+

Aug 31 2016 | 12:00am ET

U.S. asset manager Capital Group Companies has reportedly increased its stake in Credit Suisse, going from 3.0142% in April regulatory disclosures to 5.051% as of Tuesday. 

The new figure was reported by the Swiss stock exchange on Tuesday, according to Reuters. 

Credit Suisse is Switzerland's second-largest bank and one of the world’s largest investment managers. It’s new CEO, Tidjane Thiam, has been in charge since June 2015 and has moved quickly to right a ship whose stock price has fallen 40% so far this year, expanding wealth management at the expense of investment banking, cutting jobs, raising capital and writing down millions in high-risk positions.

It may be working; the bank swung from a $311 million loss in the first quarter to net income of $172 million in the second, although the impact of a challenging European banking environment and factors such as Britain’s Brexit remain wildcards.

The Capital Group Companies was founded in 1931 by Jonathan Bell Lovelace and has since grown into one of the largest financial services companies in the world, now managing more than $1.39 trillion in long-term equity and fixed income assets for individual and institutional investors through such brands as American Funds.

The firm keeps a relatively low profile and not known as an activist investor, admonishing activist hedge funds in 2014 for pushing for stock buybacks that generate short-term gains but risk long-term stability.

This is the second long-term investor to boost its major stake in Credit Suisse, following Harris Associates’ decision to raise its position to over 10%. Harris is second only to Qatar’s sovereign wealth fund as the bank’s largest shareholders. 

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