In business since 1991, York Capital Management, L.P. is an investment advisor to hedge and private equity funds. James Dinan, part owner of the Milwaukee Bucks (as of 2014), founded the New York firm that manages nearly $20.5 billion in assets.
Investors in these funds includes high-net-worth individuals, pension and profit-sharing plans, trusts, estates, charitable organizations, corporations, business entities, endowments and foreign sovereign wealth funds. Of these investors, 49% are not American, according to SEC data.
York Capital Management Background
Four years after Black Monday, Dinan, who’d lost almost everything in the 1987 stock market crash, started York Capital Management with funds raised from former colleagues at stock research firm Donaldson, Lufkin & Jenrette. (He named the firm after the avenue in New York that he was living on at the time.) In six short years, according to Bloomberg, the hedge fund manager was overseeing more than $610 million in assets. A decade after that, Credit Suisse bought a third of the firm for $425 million.
Currently, the firm has offices in New York (its headquarters), London and Hong Kong and employs 74 advisors. Dinan still leads the firm as chairman, CEO and managing partner, though in 2017 he named his eventual successors. Worth more than $2.2 billion, Dinan ranked No. 368 on Forbes’ 2018 list of the 400 wealthiest Americans.
What Types of Clients Does York Capital Management Accept?
As noted earlier, the firm’s actual clients are pooled investment vehicles, which are organized as domestic or foreign partnerships, incorporated or unincorporated entities or other similar entities. Investors in these funds are generally high-net-worth individuals, pension and profit-sharing plans, trusts, estates, charitable organizations, corporations, business entities, endowments and foreign sovereign wealth funds. Almost half are overseas.
York Capital Management Minimum Account Sizes
York Capital provides its minimum investments in each private fund’s offering documents. According to SEC data, they range from $1,000 to $25 million. The firm may waive the minimum at its discretion.
Services Offered by York Capital Management
As mentioned earlier, York Capital advises and provides administrative services to hedge, private equity and (European) UCITS funds. It also manages collateralized loan obligation funds and serves as an investment advisor to other institutional managed accounts, accounts related to its founders and on occasion separately managed accounts of investors who meet certain requirements.
York Capital Management Investing Philosophy
Depending on the fund, York Capital’s investing strategies vary and are provided in each fund’s offering documents. Generally, the firm invests and trades in securities, looking to exploit inefficiencies in the market. In its ADV form brochure, it says it may use the following strategies and instruments:
- Leverage, including margin loans
- Event-driven and arbitrage transactions
- Balance sheet arbitrage
- Investments in distressed companies
- Speculative purchases of “special situation” securities
- Equity securities
- Short sales
- Debt obligations
- Below investment-grade securities
- Second lien loans
- Non-performing loans and participations
- Distressed secured loans
- Direct loans
- Bankruptcy claims
- Options trading
- Stock index options trading
- Securities of non-U.S. issuers
- Real estate investments
- Residential mortgage-backed securities and other asset-backed securities
- Regulatory capital relief trades
- Sovereign debt investments
- Ships, including, without limitation, freight carriers or vessels.
- Start-up entities
- Private equity investments
- Hedging strategies
- Swap transactions
- Credit default swaps
- Futures contracts
- Repurchase and reverse repurchase agreements
Fees Under York Capital Management
York Capital’s management fees vary from fund to fund and according to share class. Like most advisors, the firm bases them on a percentage of assets under management. It also collects a performance-based fee. Generally, the annual management fee is between 1% and 2% and the performance-based fee can be up to 20% of the aggregate profits or distributions. For other accounts, the management fees are negotiated and range from 0.5% to 2% annually.
York Capital Management Awards and Recognition
Dinan ranked No. 20 on Forbes’ 2018 top 20 list of highest-earning hedge fund managers and traders.
What to Watch Out For
Investing with York Capital not only takes a lot of money. It also contractually requires a long timeline. Each fund specifies the terms of withdrawal or redemption, but generally, one’s money will be locked up for a considerable amount of time.
Additionally, the firm does not provide financial planning or wealth management services. So if you are looking for a financial advisor who can help steer your personal finances, this firm is not right for you.
In its most recent SEC filings, York Capital reported that it had one disclosure within the past 10 years. Its affiliate York Capital Management Europe (UK) allegedly failed in May 2013 to cover a short position in a timely manner in the York European Focus Funds. York Capital reported that to avoid the expense and distraction of litigation in the Spanish courts, York UK didn’t challenge the determination and elected to pay the fine of 100,000 euros.
Opening an Account With York Capital Management
To contact York Capital, call (212) 300-1311, email email@example.com or send a message via http://www.yorkcapital.com/Contact.
Where Is York Capital Management Located?
York Capital’s headquarters are at 767 Fifth Avenue, 17th Floor, New York, New York 10153. It also has offices in London and Hong Kong.
All information was accurate as of the writing of this article.
Tips for Finding the Right Financial Advisor
- If you don’t have the millions that a hedge fund manager like York Capital requires, you should shift your sights to a financial advisor who primarily works with individuals. Use our SmartAsset financial advisor matching tool to personalize your search. Simply answer questions about your financial situation and preferences, and the program will match you with up to three suitable advisors.
- Make sure any prospective advisors are fiduciaries. They must work in their clients’ best interests, while advisors who are not bound by the fiduciary duty are simply required to make suitable recommendations to their clients.