York Capital to spin off Asia hedge fund firm

SINGAPORE: York Capital Management’s move to exit most of its hedge fund business will lead to the creation of a new Asia-based firm with US$2.7bil of assets, according to a letter to investors.

The Asia unit will be spun off next year and renamed MY Alpha Management. It will be led by Hong Kong-based regional chief investment officer Masahiko Yamaguchi, according to a letter from York’s chief executive officer Jamie Dinan and Yamaguchi. Jonathan Gasthalter, a New York-based spokesman for the firm, declined to comment.

MY Alpha will be one of the largest hedge-fund spinoffs in Asia by an international firm. The global hedge fund industry is on pace for the fewest new funds in 20 years this year, amid the Covid-19 pandemic and investor discontent with under-performing managers, according to data from Hedge Fund Research Inc.

York has operated in Asia for 13 years, employing strategies including event-driven, fundamental equity, credit and risk arbitrage.

It Asia funds have returned an annualised 12% since Yamaguchi took charge in April 2014. They are up almost 18% this year through Nov 13, according to the letter. The Eurekahedge Asian Hedge Fund Index rose an annualised 6% between March 2014 and October this year.

The unit has expanded assets from about US$500mil under Yamaguchi, tapping opportunities as more companies go public in Asia, corporate governance improves and the region sees more corporate restructuring and mergers. York would retain a “meaningful” and “passive non-voting” economic interest in MY Alpha, the letter said.

MY Alpha will keep all of York’s Asia-based employees. Mark He, currently co-portfolio manager and head of Greater China, will be promoted to a partner at the new company. Kevin Carr, York’s global director of operations, will become MY Alpha’s chief operating officer. — Bloomberg

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