(Bloomberg) -- 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 $2.7 billion 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.
Read more: Dinan’s York Capital Stepping Back From Hedge Fund Business
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 annualized 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 annualized 6% between March 2014 and October this year.
The unit has expanded assets from about $500 million under Yamaguchi, tapping opportunities as more companies go public in Asia, corporate governance improves and the region sees more corporate restructuring and mergers. York will 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.
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