Dinan Says York Buying ‘Robust’ European Credit as Banks Retreat

May 14, 2014 2:47 pm ET

May 14 (Bloomberg) -- Jamie Dinan, founder of $21.7 billion York Capital Management LP, said his hedge-fund firm is building investments in Europe where there are more “green shoots” of recovery than six months ago.

“European credit is alive, it’s robust,” he said at the SkyBridge Alternatives Conference in Las Vegas today. “We’re stepping in where the banks aren’t going whether it’s Greek companies, shipping.”

Dinan, who founded York in 1991, said that European equities are six to 18 months behind U.S. markets. The hedge- fund manager said interest rates will stay lower for longer than people anticipate and that Ukraine is a big risk in global markets.

His comments echoed those of Scott Kapnick, chief executive officer of New York-based Highbridge Capital Management LLC, who said his firm was stepping in where Europe’s banks had withdrawn.

“European banks will start to sell assets and that will take five to 10 years,” Kapnick said on an earlier panel. He said that Highbridge, which is owned by JPMorgan Chase & Co. and manages $25 billion, had tried to partner with low-cost capital providers for direct lending in Europe.

Banks have sold 3.5 trillion euros ($4.8 trillion) of assets since 2012 and will divest an additional 1.8 trillion euros, according to Royal Bank of Scotland Group Plc data that includes bundled debt.