Posted on Nov 24, 2020 at 6:17 PM
Credit Suisse announced on Tuesday that it was massively depreciating its stake in a New York hedge fund. The Swiss bank will spend in the fourth quarter a depreciation of 450 million dollars on the 30% that it had bought in 2010 for 425 million in York Capital Management, which itself announced the day before a ” significant change in its strategy “.
Founded in 1991 by James Dinan, and co-managed by Christophe Aurand (graduate of Sup de co Reims), who announced Monday his withdrawal from the company by the end of the year, York Capital has managed up to 26 billion euros. dollars at its peak in 2015. Since then, however, the company has seen poor performance and investor flight, with assets under management falling to $ 16 billion.
According to the “Wall Street Journal”, it has reduced its workforce from 215 to 180 employees since January. York Capital will focus on longer life assets such as private equity, private debt and CLOs (debt securities issued by a securitization vehicle), while ending its European hedge fund activities and splitting its Asian activities.
When Credit Suisse acquired its capital ten years ago, the movement was seen as visionary, bringing together the interests of fund managers after two years of crisis and those of banks in search of lucrative and risky investments for their clients. wealthy. Its rival UBS has its own alternative management fund, O’Connor.
Investment in Greek debt
York Capital Management has invested in sovereign debt and Greek banks alongside other hedge funds including Brevan Howard and Fortress. Until its recent woes, the company’s betting benefited its founder James Dinan, who notably bought a stake in basketball club Milwaukee Bucks for $ 100 million.
Credit Suisse’s decision comes as new boss Thomas Gottstein, who took over from Tidjane Thiam in February, began a strategic review of asset management activities. The bank expects restructuring and a grooming of its portfolio of alternative investments.
Credit Suisse’s setbacks are reminiscent, on a different scale, of those of the French Natixis, which announced in early November its intention to withdraw from the capital of H20 and a depreciation of 22 million euros on its 50% stake in the alternative manager shaken by a wave of scandals.