York Capital Management (York), the global alternative investment firm, last night informed its investors of a significant change in strategy. As a result, York will focus on longer duration assets such as private equity, private debt, and CLOs, while winding down its European hedge funds business, and primarily managing internal capital in its Multi Strategy fund. York’s APAC business is expected to be spun out as a new and separate hedge fund in the next year in which Credit Suisse intends to have a continuing interest.
In view of this announcement, Credit Suisse will take an impairment to the valuation of the non-controlling interest that the bank has owned in York since 2010. The amount of the impairment taken will be assessed as part of our year-end process, but is currently expected to be approximately USD 450 million. This will be booked in the 4Q20 results of the Asset Management business within our International Wealth Management division.
The capital impact of this impairment is currently estimated to reduce our 4Q20 CET1 ratio by approximately 7 basis points. This impairment does not change our existing guidance for dividends and capital distributions in 2020 and 2021.
Notes to editors
York Capital Management was founded in New York in 1991 by Jamie Dinan and subsequently expanded its US based portfolio of hedge funds to operate in Europe and Asia, as well as diversifying into private equity, private credit, distressed assets and CLOs. It represented approximately 1% of the CHF 438 billion assets under management in the Asset Management business of Credit Suisse as of the end of 2019.