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York Capital to spin off US$2.7b Asia hedge fund firm

[NEW YORK] 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$2.7 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 Mr 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.

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 per cent since Mr Yamaguchi took charge in April 2014. They are up almost 18 per cent this year through Nov 13, according to the letter. The Eurekahedge Asian Hedge Fund Index rose an annualised 6 per cent between March 2014 and October this year.

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The unit has expanded assets from about US$500 million under Mr 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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