BaFin – Germany’s top financial regulator, the Federal Financial Supervisory Authority, or BaFin, earned a less than impressive reputation for its handling of a series of corporate scandals. BaFin’s officials were the primary authority responsible for regulating Germany-based Greensill Bank.
CBILS, CLBILS and CCFF – The Coronavirus Business Interruption Loan Scheme, Coronavirus Large Business Interruption Loan Scheme and Covid Corporate Finance Facility were all set up by the UK government in response to the devastating impact of the Covid-19 pandemic and resulting lockdowns on the country’s economy. Greensill Capital sought access to all of these facilities as the struggling company scrambled to find new sources of funding to support loans it had made.
FCA – The Financial Conduct Authority is the UK’s main financial watchdog. Like BaFin, the UK regulator has been criticized for the effectiveness of its oversight.
GA – General Atlantic was founded in 1980 to manage investments for a charity set up by Charles Feeney, the co-founder of Duty Free Shoppers. Today, GA invests tens of billions of dollars across a portfolio of almost 200 companies. The firm’s investors typically target young, fast-growing companies that require an injection of cash and management advice to accelerate their development. The firm invested $250 million into Greensill Capital.
GAM – Global Asset Management, or GAM, was founded in 1983 by the investor Gilbert de Botton. The company manages investments for wealthy individuals, pension funds and other institutions. The Zurich and London-based company has been owned by Swiss banks Julius Baer and UBS. It has been independent since 2009. The firm was one of the first major financial institutions to invest significantly in assets sold by Greensill Capital.
Global financial crisis – The global financial crisis of 2007 to 2009 was sparked by a crisis in the US mortgage market whose ripple effects shook stock markets around the world and threatened to topple the international financial system. Several major banks collapsed altogether while others survived only with billions of dollars in government bailout money. It was followed by a period of renewed regulation that rendered many traditional financial activities unprofitable for the banks and encouraged the growth of a so-called shadow banking sector where new firms filled the gaps left behind.
IPO – An Initial Public Offering is the Holy Grail of the modern business founder. Once a company achieves a desired scale, its founders and other owners will typically look to list the company’s shares on a public stock market through an IPO. They must first go through a tightly regulated and arduous process, but the rewards can be enormous for existing shareholders, including employees, who can sell their shares and convert wealth on paper into real money. Greensill Capital was targeting a multibillion-dollar IPO before its collapse in early 2021.
SCF – Supply Chain Finance, also known as Reverse Factoring, is a kind of banking service that promises to smooth payments between suppliers and buyers of goods. SCF has grown rapidly in recent years, grafting new technology onto centuries-old banking traditions. Typically, SCF sees suppliers of goods and services get paid very promptly, while allowing buyers to pay their bills later. The process is funded by a third party, such as a bank or other financial institution, which profits by taking a fee for their role. Greensill Capital became one of the biggest providers of SCF in just a few years.
SPV – A Special Purpose Vehicle is a type of company set up to undertake a very specific business activity. Their use is a legitimate and necessary part of the modern business world, but they can also add complexity and obfuscation to business transactions. Greensill Capital used several SPVs to process the assets it sold to investors.
SoftBank Vision Fund – The $100 billion Vision Fund, founded in 2017, was set up by SoftBank, a Japanese technology firm led by charismatic businessman Masayoshi Son. The fund, which is also backed by investors from the Middle East and Silicon Valley, is the biggest technology-focused investment fund in the world. It is based in the UK, and provided billions of dollars of backing to Greensill Capital.
TBCC – The Bond and Credit Company is a small Australian insurance firm specializing in trade credit insurance. TBCC was founded in 2013. In 2019, Insurance Australia Group sold its 50% stake in TBCC to Japan’s Tokio Marine. TBCC was by far the biggest provider of trade credit insurance to Greensill.
Trade credit insurance – Businesses take out trade credit insurance (TCI) to protect themselves against the possibility that their customers will default on payments that come due. Several major global companies provide trade credit insurance, charging premiums based on the likelihood of non-payment. Many of Greensill Capital’s supply chain finance loans were sold to investors on the basis that they were protected by trade credit insurance.