Credit Suisse First Boston (CSFB) is standing its ground in private equity while others are retreating. The investment bank, which has announced its share of layoffs and budget cuts, has remained committed to private equity, having announced last week that it was uniting all of its alternative assets, private equity, private fund group and hedge fund groups into one division named the Alternative Capital Division.
CSFB’s decision goes against the tide. Morgan Stanley announced in February that it was spinning out Morgan Stanley Capital Partners. Its move followed other large financial institutions in abandoning or sharply reducing exposure to private equity. J.P. Morgan Chase, Abbey National and Deutsche Bank have all exited or substantially cut back their involvement in private equity.
CSFB’s Alternative Capital Division will manage more than $29 billion in assets and remain separate from the CSFB Asset Management Group (CSAM). The New York-based organization’s goal is to generate annual revenue of $1 billion and reacg $50 billion in assets under management in five years.
The new unit will be run by Bennett Goodman – previously chairman of CSFB Merchant Banking and Leveraged Finance – who had been engaged in an effort to either join rivals or found his own firm. Goodman joined CSFB in November 2000 when the firm acquired Donaldson, Lufkin and Jenrette, where he had been global head of leveraged finance.