Credit Suisse expects to book an impairment of around $450m for a stake in alternative investment firm York Capital Management, which intends to wind down its European hedge funds business.

The investment firm accounted for around 1% of the CHF438bn ($481bn) overseen by the Swiss bank’s asset management unit at the end of last year.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

Related Company Profiles

View all

Established in 1991 by Jamie Dinan, York Capital Management is overhauling its strategy.

As part of this overhaul, the firm will now prioritise longer duration assets including private equity, private debt, as well as collateralised loan obligations (CLOs).

Credit Suisse, which took a stake in the investment firm in 2010 for $425m, will take the charge in the final quarter of this year.

The bank plans to retain an interest in York Capital Management’s Asia-Pacific unit, which is expected to be spun out as a new and separate hedge fund in 2021.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Commenting on the move, the Swiss bank said: “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 Swiss bank stressed that the charge will not impact its intention to return capital to shareholders.

However, it is expected to lower the bank’s CET1 ratio by nearly 7 basis points in the fourth quarter.

Meanwhile, recently, a report said that Credit Suisse is open to merger and acquisition (M&A) opportunities, especially in its wealth management business.

The bank’s CEO Thomas Gottstein spoke at Bloomberg’s Future of Finance virtual event that consolidation “is needed and will happen”.

In Q3 2020, Credit Suisse reported a 38% slump in net profit, missing analyst expectations, with the exclusion of a one-off gain that lifted last year’s performance.