According to a tipster inside the hedge fund, things are a little crazy over at York Capital Management today.
York Capital Management European head Christophe Aurand is breaking off the European business after frustration with management by Jamie Dinan and Dan Schwartz. Partners fighting / screaming at each other in full view of trading floor. Head of client services crying after a meeting. Lawyers and PR pow-wowing in conference room.
Yikes. We knew things were tense at York but this is real-life drama. The WSJ reported in December that Dinan was resolute in his quest to keep York propped up after a dismal 2016 in which the firm saw AUM drop by 35%. That might have been particularly embarrassing for Dinan since he had to take those losses into ownership meetings with his co-owners of the NBA's Milwaukee Bucks: fellow hedgie Marc Lasry and Fortress' Wes Edens. Dinan paid $100 million to buy into the franchise in 2014.
But as of a few months ago, Dinan was not owning up to any distractions and was even making bold moves like putting Aurand in a more powerful position hoping to reinvigorating York's flagship fund.
Mr. Dinan assigned a top lieutenant, Christophe Aurand, to help right the $3.7 billion flagship fund that Mr. Dinan and York’s chief investment officer, Daniel Schwartz, run. Michael Weinberger, who contributed to the fund and was one of the earliest partners at York, left earlier this year to start his own hedge fund.
According to a second source very familiar wit goings-on inside York, things have been a bit strange at the fund since Weinberger left to strike out on his own and Aurand has looked to consolidate his power by taking charge of more trading areas and imposing his more conservative approach to trading. That has reportedly caused some tension inside York and Aurand has apparently been voicing his displeasure for some time now, threatening to take his ball and go home more than once.
But from what we hear things are apparently coming to a real head at York HQ today. Our tipster tells us that fights broke out in full view of the trading floor and conveyed a general sense of unrest and panic. So what, pray tell, is different about this most recent Aurandian drama than the previous ones at York?
Per our tipster:
Frustration because Jamie won't come back from the Bucks draft combine in order to handle crisis. Feelings are he's too checked out. Mark Schein head of compliance flew to UK to talk to Christophe. Christophe was in US last week to lay down ultimatum.
You finance types can shake your head and tsk tsk Dinan's choices all you want, but we get it. Europe is an economic fucking tire fire and The Bucks made the playoffs this year with an intriguing young core and the solid coaching of Jason Kidd. Dinan is just investing his time where he thinks it's best spent. That's why they call it "asset management."