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Credit Suisse moves deeper into hedge fund with minority stake in York Capital Management
Opalesque Industry Update – While most U.S. banks are shunning hedge funds with the enactment of the Dodd-Frank Act, Credit Suisse Group AG is doing the opposite with the acquisition of a $425m minority stake with New York-based global hedge fund York Capital Management.
Under the terms of the deal, York will continue to be run independently by founder and CEO Jamie Dinan, and CIO Dan Schwartz. The two firms also agreed to provide for earn-out payments based on five-year financial performance by York and a retention arrangement for the CEO, CIO and other senior York principals.
In a statement, Credit Suisse said the deal with York is a non-controlling interest and not an investment in York’s fund. It pointed out that this is consistent with the rules under the Dodd-Frank Act which prohibits banks to invest its own money in hedge funds.
President Barack Obama signed the 2,319-page Dodd-Frank Wall Street Reform and Consumer Protection Act in July. Under the new law, banks are ...................... To view our full article Click here
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