Lex Greensill Exits Billionaire Ranks as His Empire Unravels

(Bloomberg) -- Lex Greensill has a new title: ex-billionaire.

Greensill Capital's fight for survival means the fortune of its founder and chief executive officer has plummeted just months after his London-based firm was seeking a $7 billion valuation.

Greensill, 44, who grew up on a farm in Australia, founded the company a decade ago after starting his finance career at Morgan Stanley and Citigroup Inc. He rose into the ranks of the ultra-rich by revamping the humdrum business of supply-chain finance -- the short-term corporate debt that helps speed up payments between businesses.

SoftBank Group Corp.'s Vision Fund injected $1.5 billion into the firm during 2019. At its peak, the company was worth more than $3.5 billion with customers in almost 200 countries and a fleet of aircraft, including a Gulfstream G650 and two Piaggio turboprops. Greensill and his family owned at least a third of the firm at the end of 2019, according to regulatory filings.

Rapid Rise

Greensill's rapid rise opened doors, with the firm's representatives holding more than a dozen meetings with U.K. government officials since 2016, filings show. David Cameron's coalition government appointed Greensill to help it cut wasteful spending and the former prime minister later joined the firm as an adviser.

Greensill's efforts to disrupt a niche part of global finance were derailed when credit insurance backing some of his firm's loans lapsed, eventually forcing Credit Suisse Group AG to freeze a $10 billion group of client funds that bought the debt. The Swiss bank said on Friday it will close it down.

SoftBank's Vision Fund wrote down the value of its Greensill stake at the end of 2020, and is weighing dropping the valuation to almost zero, according to people with knowledge of the matter. The firm's woes are also putting pressure on industrialist Sanjeev Gupta, who expanded his global empire rapidly with funding help from Greensill.

The company is now in the process of filing for insolvency in the U.K., people with knowledge of the matter have said, while Germany's financial watchdog, BaFin, has shuttered its banking subsidiary and asked law enforcement officials to investigate accounting irregularities at the lender.

Greensill said in a statement late Wednesday that it had received “extensive advice,” from law firms in the U.K. and Germany, “which informed the way in which the assets were classified.” The company also said that it immediately complied after BaFin advised it late last year and early this year that it didn't agree with its accounting.

Read more: Greensill's Swift Fall Was Triggered by Insurer Who Balked

As recently as late last year, his firm was talking up its growth plans ahead of the company eventually becoming public.

While the eponymous firm made up the bulk of his fortune, Greensill and his family still own an agricultural business that's one of Australia's biggest sweet potato growers. His brother, Peter, helped to provide funds to set up Greensill Capital.

“I recognized that big institutions can't necessarily adopt technology at pace and the world isn't going to wait around for banks to figure everything out,” Greensill said in an interview last year with the Wharton Fintech Podcast. “I decided that I thought I could do it better.”

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