Credit Suisse to take $450M impairment on value of stake in York Capital Management
Credit Suisse issued an announcement today regarding alternative investment firm York Capital Management.
Last night, York informed its investors of a significant change in strategy. As a result, York will focus on longer duration assets such as private equity, private debt, and CLOs, while winding down its European hedge funds business, and primarily managing internal capital in its Multi Strategy fund. York’s APAC business is expected to be spun out as a new and separate hedge fund in the next year in which Credit Suisse intends to have a continuing interest.
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 the bank’s year-end process, but is currently expected to be approximately USD 450 million. This will be booked in the results of the Asset Management business within Credit Suisse’s International Wealth Management division for the fourth quarter of 2020.
The capital impact of this impairment is currently estimated to reduce our 4Q20 CET1 ratio by approximately 7 basis points.
This impairment does not change Credit Suisse’s existing guidance for dividends and capital distributions in 2020 and 2021.