Giving customers access to their money is a real nuisance. Posting some overwhelming returns or worse for a couple of years in a row and suddenly the goddamn natives want it back. So Jamie Dinan and York Capital won’t do that anymore. (And not just temporarily this time.)
Mr Dinan said he plans to close York’s European hedge funds and turn his flagship U.S. hedge fund into a fund that operates primarily in-house money. The strategies collectively manage less than $ 3 billion after years of poor performance and investor failure.
York continues to expect around $ 9 billion worth of private equity, private debt and other vehicles that will tie up customer capital for extended periods of time.
So who wants to make it impossible to get your money out of the hands of a man who’s down 6.6% for the foreseeable future this year? Great. Oh, and by the way? There are a few other things that you should know.
The company has also been undergoing a rocky succession attempt, with Mr. Dinan becoming more involved in running the company earlier this year after relinquishing some responsibility. York said in an investor letter on Monday that co-investment chief Christophe Aurand will be leaving at the end of the year after Mr Aurand told the company he wanted to “take a step back …”.
Mr Dinan will continue to serve as chairman and chief executive officer of York, the letter said, while William Vrattos remains sole investment director.
The letter also states that York’s Asian hedge fund, led by Masa Yamaguchi, who has done well in recent years, and “related vehicles” will be expanded into an independent company.
Some people (notably Jamie Dinan) believe that Jamie Dinan is ready to become a private equity titan. Credit Suisse is not so sure. Or rather, they are safe, exactly in the opposite direction.
Credit Suisse announced Tuesday that it would record a $ 450 million impairment loss on its stake in York Capital Management as the American investment firm, founded by Jamie Dinan, unwinds most of its hedge fund strategies following this year’s market upheaval . The Swiss bank agreed to acquire a 30 percent stake in York in 2010 and offered to pay at least $ 425 million at that time to give clients access to alternative investments. Credit Suisse bought the stake at a time when many Wall Street companies were looking for ways to capitalize on the fee income from hedge funds because new regulations in the wake of the financial crisis had made it difficult for banks to wager with their own money. Such minority holdings were not without risk, however, as many investment firms had difficulty performing their services or were even closed, rendering the shares worthless.
Jamie Dinan’s York Capital Management will largely run the hedge fund operations [WSJ]Credit Suisse must delve into a $ 450 million hit from the York Hedge Fund [Bloomberg]
Previously: York Capital suppresses the palace’s revolt by promising to hand over the keys to the kingdom to rebel Christophe Aurand