Reports
Credit Suisse Expects $450 Million Hit As US Fund Firm Changes Tack

The bank has a stake in York Capital Management, a US-based firm that has decided to shut down its European hedge fund operations and concentrate on other investments.
Credit Suisse
today said that it expects to take an impairment of around $450
million after US-based York Capital
Management, in which the Swiss lender has a stake, decided to
wind down its European hedge funds business and shift its focus
elsewhere.
York will focus on longer-duration assets such as private equity,
private debt and collateralized loan obligations. The firm’s
Asia-Pacific business is expected to be spun out as a new and
separate hedge fund in 2021. Credit Suisse intends to have a
continuing interest in this entity, it said in a statement.
“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 Zurich-listed bank
said.
At present, Credit Suisse said it reckons the impairment to be
about $450 million. This sum will be booked in the fourth-quarter
2020 results of the asset management business within its
international wealth management division.
Credit Suisse said it expects the impairment to dent its Q4 2020
Common Equity Tier 1 ratio by about seven basis points. However,
it is not changing its guidance for dividends and capital
distributions for this year and 2021.
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 about 1 per cent of the SFr438 billion ($479.8
billion) assets under management in the asset management business
of Credit Suisse as of the end of 2019.