Credit Suisse First Boston is getting a reputation among some private-equity investors as a firm that can’t shoot straight, according to the Wall Street Journal.

After competing with different leaders for its private-equity and "alternative capital" business, the Wall Street securities firm in December said it would turn its main private-equity fund business into an independent entity. The move was aimed at keeping the business from competing on deals with big leveraged-buyout firms, which are among the firm’s most valuable clients.

The latest plan, which CSFB disclosed to investors was that CSFB, a unit of Credit Suisse Group, is preserving the business, called DLJ Merchant Banking Partners, but about a third of the team will be replaced.
The DLJ business, with a new set of leaders, still will avoid making investment in big leveraged buyouts, which was the most attractive for some investors. It will instead try to settle conflicts by looking at middle-market deals and taking minority stakes in bigger companies alongside clients, rather than contesting with them.

The flip-flops have caused frustration among some big pension funds that have invested hundreds of millions of dollars in three leading funds: DLJ Merchant Banking Partners I, II and III.

CSFB’s decision to put an end to big deals and be engaged in a more limited private-equity investment business mirrors that of many top companies, including J.P. Morgan Chase & Co. and Morgan Stanley. Goldman Sachs Group Inc. is one of the few banks with a big private-equity business that hasn’t changed its strategy.

These investment banks often contest with leveraged-buyout clients that they also depend on for lucrative loans and underwriting assignments.