By Britt Erica Tunick
Photographs by David Paul Larson
| Jamie Dinan: “I’ve always had a vagabond soul” |
From the beginning of his Wall Street career Jamie Dinan dreamed of one day launching his own firm: Jamie Dinan Securities. But Dinan is nothing if not practical. So when he set out to realize his dream in 1991, he was quick to weigh the risks of doing so with his own name. Despite his perception of himself as a superstar, he soon discovered that investors didn’t see him quite the same way. Raising money was, he now recalls, “100 times harder” than he’d expected.
“I wasn’t sure that it was going to work, and I figured if it didn’t, it would be a lot easier to let York Capital join the dustbin of history than for Jamie Dinan Securities to join the dustbin. I could deny, deny, deny if I had to,” says Dinan, then 31 years old and living on York Avenue in New York City. “I decided to be a little bit more humble and a little more pragmatic, and that very act started a chain of events in determining the ‘depersonalization’ of this firm,” says Dinan, now 51.
At the time, not naming the firm after its founder was unusual. But now Dinan believes it has been a major factor in the firm’s recent sale of a minority interest to Credit Suisse Group.
Investor skepticism about giving money to Dinan has become a distant memory. In the 19 years since York launched with only $3.6 million in assets under management, it has grown to a $14.5 billion firm, $12.65 billion of it in hedge funds. Its flagship has returned an annualized 15.38% through October 31, according to documents provided by investors. And even though it lost 26.39% during 2008, Dinan did not gate or otherwise restrict investor capital, which made him one of an elite group of hedge fund managers who gained investor trust as a result. Evidence of that is the fact that York emerged as the industry leader in this year’s AR Hedge Fund Report Card, which asks investors to rank the industry’s 50 largest hedge fund firms on alignment of interests, alpha generation, independent oversight, infrastructure, liquidity terms and transparency.
York’s $425 million sale of an estimated 30% stake of its business to Credit Suisse in September was the first such deal since the financial crisis sent the economy into a tailspin and President Barack Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act, which could crimp banks’ proprietary trading desks and their hedge fund investments.
The Credit Suisse transaction means sizable payouts for Dinan and York’s 10 other partners. But Dinan says the sale is not about York’s leadership cashing out and is actually about beginning the handoff of the firm to the next generation. Though specifics about the deal have not been revealed, Dinan owned at least 50% of the firm before the deal, according to a May filing with the Securities and Exchange Commission.
By creating a transaction in which partners will receive the majority of their payouts on the back end (anywhere from five to seven years, depending on each individual’s agreement), Dinan believes he has removed the biggest risk most hedge funds face these days: the possibility that key portfolio managers will suddenly leave to launch funds of their own. And since York Capital Management, its flagship fund, reached its high-water mark in 2009, the potential payout for its partners is even greater.
Additionally, Dinan thinks partnering with a major institution like Credit Suisse gives York the benefits of best management practices, more diverse product offerings and a worldwide brand.
Dinan’s sales pitch has yet to win unanimous approval among his investors. While many York investors view the Credit Suisse partnership positively, a few skeptics see it as little more than an effort for Dinan and York’s partners to cash out while distributions from such sales are still treated primarily as income and not as capital gains under current tax laws. (Dinan say taxes were not a primary motivation for the deal.)
At least one major institutional investor in the firm is planning to redeem because of the partnership. Other concerns investors have voiced about York include the high amount of market risk in its portfolios and the firm’s ongoing effort to raise funds when some investors believe it may have already become too big to continue generating consistent returns.
York investors aren’t the only ones keeping a close watch on the firm. Following the passage of the Dodd-Frank bill, many in the financial industry believe other banks will follow Credit Suisse’s lead and try to plug the gaps created in their businesses by acquiring stakes in hedge fund firms.
“What we’re starting to see in the alternatives business is a bit of a bifurcation, where there are niche players that are pure play in a specific strategy and there are a few firms that will truly scale and become institutional firms with brands that will be global and multidimensional in nature,” says Rob Shafir, chief executive of Credit Suisse’s asset management division. When he inherited the group two and a half years ago, Shafir realized he needed to focus more on the products that could help the firm differentiate itself from its competitors.
“The single-manager hedge fund space was a place where we were relatively light, and we felt that we needed a top-quality multiproduct platform,” says Shafir. He cites the firm’s decision not to gate investors in 2008, its low use of leverage, an ability to maintain a strong long-term track record through varied investment environments and a number of managers other than Dinan. “York isn’t like a lot of firms that are one-trick ponies. This is a real multiproduct firm with a real partnership culture—the kind that we felt could be scaled,” says Shafir.
One of five children, James “Jamie” Dinan was born in Baltimore in 1959, the middle child of Robert and Jeannette Dinan. He learned about overcoming adversity at a very young age, losing roughly 70% of his hearing in his infancy after a doctor treated him with streptomycin for a fever—hearing loss he has compensated for ever since with a small electronic amplifier in his ear and his ability to read lips.
During his childhood Dinan had no exposure to Wall Street. But when the time came to choose a college and a career path, he followed in his older brother Don’s footsteps and selected the University of Pennsylvania’s Wharton School, where he pursued a degree in economics, graduating summa cum laude in 1981. He then applied to Harvard Business School, but Donaldson, Lufkin & Jenrette recruited him for a position in its corporate finance group, so Dinan deferred his acceptance and headed straight to the Street.
Dinan spent only two years at DLJ, but his time there would change the course of his career. While there, he opened a trading account and began investing for himself. When one of his bosses suggested he try his hand at merger arbitrage, Dinan fell in love with the asset management business. His ability to learn the intricacies of merger arbitrage and his strong work ethic did not go unnoticed by his peers. So when he returned to school and completed his MBA, George Kellner, a former colleague from DLJ who had just left the firm, sought to hire him. Dinan jumped at the opportunity, and within a couple of years worked his way up to become a general partner at Kellner, DiLeo & Co., in charge of the firm’s risk arbitrage and special situation investments.
In 1991, Dinan left Kellner to set out on his own, assuming it would be easy to get funding for his new firm. Reality hit hard. When he found it difficult to coax investors into backing his new venture, he resorted to trading from the conference room of Joel Greenblatt’s hedge fund firm, Gotham Capital, with only $3.6 million—assets culled from 19 investors. It was a group primarily of family and friends that included Kellner. “I decided to adopt the ‘Field of Dreams’ model, which was ‘If I build it, maybe they’ll come,’” Dinan recalls. His goal was to one day run $100 million, which he never thought would actually happen.
| Daniel Schwartz: The waning of the distress cycle has really led to a very resurgent M&A cycle, which is something that we’re taking advantage of |
During York’s first few years Dinan focused solely on generating returns, hoping a steady track record would help entice more investors to take a chance on him. Just over a year and a half into his venture, as he looked to start increasing the firm’s staffing, an acquaintance from Jack Nash’s Odyssey Partners mentioned that his brother-in-law, Daniel Schwartz, was interested in getting into hedge funds and that Dinan could probably get him on the cheap. A banker eight years Dinan’s junior, Schwartz had spent two years working as an analyst in Morgan Stanley’s investment banking and global equity derivatives groups and shared an investing outlook similar to Dinan’s. In the 17 years since they met, Dinan and Schwartz have developed a close rapport that Dinan likens to the type of relationship between brothers. He says there has never been any sense of competition but instead a mentoring relationship where it has always been clear Dinan was in charge. Nonetheless, Dinan says it is not uncommon for him to defer to Schwartz’s opinion. “Hiring Dan was probably the best thing I ever did here because the student passed the teacher, and that’s why he’s the CIO and is personally, I feel, more important to this firm than even I am,” says Dinan, joking that he’d prefer the sentiment not be made public to avoid Schwartz’s head getting any bigger than it already is.
That brotherly relationship is evident in the interaction between Dinan and Schwartz, who seem to balance each other. Dinan’s outgoing personality and vibrant sense of humor serve as a stark contrast to Schwartz’s quieter and somewhat stern demeanor. Schwartz’s more reserved personality has been interpreted as arrogance by investors in the past, leading at least one institutional investor to redeem from York. But those who know them say that Dinan and Schwartz complement each other perfectly. After years of working only inches from each other on York’s trading floor—both men eschew their offices in favor of working alongside the rest of the weberfirm’s partners—it is no wonder that friends and colleagues say it is not uncommon for the pair to finish each other’s sentences. Schwartz is widely known to be York’s No. 2 guy and Dinan’s most likely successor when he ultimately retires—a fact Dinan makes no secret of. But Dinan is not ready for retirement just yet. He wants to help ready the firm for the transition to the next generation of leaders and says he has a number of goals he wants York to achieve during the next decade. Though Dinan has a definite age in mind for retirement, it is not one he is ready to share. “It’s like the old saying ‘Man plans. God laughs,’ ” Dinan jokes.
York’s growth didn’t happen overnight, but it did happen. Taking an event-driven multistrategy approach to investing, York built up its assets under management to $4 million by the end of its first year of operation. The firm reached the $1 billion mark in 2001, after which point assets continued to rise fairly steadily. In 2002, York faced a setback when its losses in accounting frauds like Tyco International and WorldCom led to a 7.12% loss in the firm’s multistrategy flagship fund. Investors pulled roughly $300 million from the fund. With the fund below its high-water mark and therefore unable to pay incentive fees, Dinan took the extraordinary action of guaranteeing performance fees of 3% to 4% of the fund’s 2003 performance to a handful of his key fund managers to ensure that they would stick around. The incentive worked, and none of the firm’s fund managers left—prompting Dinan to change the compensation scheme for partners to one based on overall firm performance.
By January 2007, York’s assets had climbed to $7.35 billion and more than doubled over the next year and a half to reach the firm’s peak at $15.3 billion by July 2008, according to the AR Billion Dollar Club. But York Total Return, a fund of funds made up of holdings from all of York’s individual funds, lost 29.8% that year. Between portfolio losses and redemptions, York’s assets plummeted to $8.7 billion by the end of 2008, a 43% drop in only six months. “We would be bigger today had we done a good job in ’08. We made a lot of mistakes and learned a lot of lessons,” says Dinan. “We now more closely monitor widely owned positions —especially those held by heavily levered hedge funds.”
He says the firm’s current $12.65 billion in hedge fund assets—still shy of the peak—reflects its poor performance in 2008. But he does not regret the decision to let investors exit freely. “We really believe that we put our investors first, and we do that because we believe it’s in our best interest,” says Dinan.
That perspective has resonated with York’s investor base, which is made up of roughly one-third institutional investors, one-third family office and private clients and one-third fund of funds. “I sleep well at night knowing that they’re working hard for me. And I trust them,” says Richard Galanti, Costco Wholesale’s chief financial officer, who is one of York’s original investors. “Jamie is smart and has a lot of common sense. And notwithstanding his success, he’s remained down-to-earth, which sometimes is hard to do,” adds Galanti, who has known Dinan since the two worked together at DLJ in the early 1980s.
York’s assets have been coming back; they’ve increased by $4.6 billion since the summer of 2009, and the firm continues to raise capital. Since July, assets have increased by $1.21 billion.
In early November the firm launched the York Asian UCITS III fund with $10 million in partner capital, for which it has begun aggressively fundraising. The new fund is the second UCITS (Undertaking for Collective Investments in Transferable Securities) product York has launched in the past two years—funds whose portfolios are liquid, transparent and provide investors with a daily net asset value of their holdings in anticipation of European regulatory changes that would otherwise make it all but impossible for U.S. hedge funds to raise capital from European investors. York now boasts nine separate hedge funds, not including its UCITS funds. The largest is flagship York Capital Management, with $4.8 billion at the beginning of November.
York identifies its three main focus areas as hard catalyst event-driven stocks, soft catalyst value stocks (securities it believes to be undervalued where specific events will raise their worth) and distressed investments. York’s fund managers say the firm is essentially sector agnostic, but financials, health care and natural resources are among its most active areas of investment. At the end of September, York’s top five long-term holdings were Potash Corporation of Saskatchewan, Alcon, Fortis Bank Nederland, Kaupthing Bank and Arch Bay Capital, which all together represented 15% of the firm’s total holdings. Sovereign credit default swaps; consumer discretionary equities; industrial, financial and utility equities represented the firm’s top five short positions, collectively accounting for only 2.5% of the firm’s positions.
As evidenced by the firm’s 3.8% holding in Potash—the target of a failed hostile takeover in the fall—York is stepping up its M&A investments. “The waning of the distress cycle has really led to a very resurgent M&A cycle, which is something that we’re taking advantage of and where we have really started to pick up our involvement,” says Schwartz. York has always kept the leverage within its portfolios to a minimum—a practice stemming from Dinan’s own experience in 1987 when an unexpected drop in the Dow Jones Industrial Average wiped out his personal investments to the tune of roughly $600,000, a large portion of which he had borrowed using credit cards. To make up for the loss of leverage, the firm tends to shy away from plain-vanilla merger arbitrage deals in favor of hostile bids. Longer term, the firm expects to find the best investment opportunities overseas, particularly in European credits, given that European banks have been slower to address some of the issues in their loan portfolios.
| Jeffrey Weber: The hallmark of York Capital is the fact that we are an event-driven manager that is global |
“The hallmark of York Capital is the fact that we are an event-driven manager that is global,” says Jeffrey Weber, York’s president, who joined the firm in 2004 from investment firm William A.M. Burden & Co. Dinan and his colleagues have identified Asia and South America, specifically Brazil, as some of the most promising areas for investment in the near future, and at the end of 2009, York stepped up its commitment to the firm’s international activities by promoting Christophe Aurand to become its first international chief investment officer. “To a degree, the European and Asian markets are less efficient than the U.S. market, so we’re basically deploying the same strategies and looking for the same types of investments, but we are doing it with local teams that have the benefit of very strong cultural and language knowledge in the different countries,” says Aurand, who joined York in 2001 from Japan’s Taiyo Life Gamma Asset Management, where he was a senior fund manager. Of York’s 145 employees, 27 are located in its overseas offices, and the firm is in the process of bolstering its Hong Kong office. Its fund managers say it would not be surprising for the firm to launch a Brazil office in the near future.
York is counting on its new alliance with Credit Suisse to help expand its global reach. That goal is shared by its minority shareholder. “York will never, on its own, have the global reach of a 50,000-person firm like Credit Suisse. And it’s not obvious to me that we could re-create York’s investment process on our own,” says Credit Suisse’s Shafir. “But by partnering and matching the respective strengths of our platforms and what they do, I think we can create a better answer for all of our clients.” By pairing York’s slate of funds with Credit Suisse’s distribution capabilities, Shafir believes the union will benefit both parties.
Under the terms of the agreement, Credit Suisse’s initial $425 million investment buys the bank an unspecified noncontrolling interest in York and the guarantee that its top moneymakers will stick around long enough to give the deal time to pay off. The 11 York partners monetized by the deal, including Dinan, must stay on for the next five to seven years, depending on their individual contracts. Collectively, the group is also required to plow more than 50% of the after-tax proceeds from the deal back into York’s funds, with all the partners owning the same percentage of each individual fund. A portion of the back-end profits of the deal have also been earmarked for future partners at York, with the firm planning for a continual redistribution of some of that equity.
“We fully intend to make a number of our next generation of leadership partners between now and the back end,” says Dinan, who has never been cheap about sharing York’s equity and previously awarded at least 25% of the firm to Schwartz. “The vast majority of the value of this deal will be going to the partners between now and perpetuity. By its very nature, it’s designed to be a living document.” He says the deal also allows York to maintain its independence, giving the firm complete control over its asset size and prohibiting Credit Suisse from forcing the firm to create products or accept funding it does not believe would be beneficial.
Such pairings remain somewhat rare. Other hedge fund firms that have entered into similar arrangements in the past include Highbridge Capital Management, which sold a majority share of its firm to JPMorgan Asset Management in 2004 in a deal that culminated in a 100% acquisition five years later; Ospraie Management, which sold a 20% interest in its firm to now-defunct Lehman Brothers Holdings; and D.E. Shaw, which also sold 20% to Lehman.
Those deals have had mixed success. But Dinan says he did not rush into this deal and has been in on-and-off discussions about potential partnerships with more than half a dozen major financial institutions since 2006. Until Credit Suisse came along, he says no one had offered an attractive enough deal or understood the importance of his efforts to depersonalize the firm and create a culture where multiple leaders would ensure its longevity. Shafir says that he not only had similar concerns, but also wanted to avoid repeating the mistakes of investment banks that had gone before him but messed up their partnerships by trying to exert too much influence on the hedge fund firms they had invested in. “We tried to thread a needle where it would be a big enough and strategic enough deal for both companies, but we did not buy a majority,” says Shafir. “I want to partner with somebody that wants to grow their business and not just to let go or check out.”
| Michael Weinberger: The Credit Suisse deal forced everyone to hammer things out for the next generation |
The Credit Suisse–York deal was initially slated for late last year, but because of uncertainty regarding financial reform, specifically the Volcker Rule, which initially sought to forbid banks from buying hedge funds, the firms were forced to hold off for nearly nine months. Oddly enough, Dinan believes the delay proved to be a good thing, giving both parties time to hash out intricacies that otherwise wouldn’t have been dealt with. In the end, he says that what was originally a 10-page agreement expanded to 111 pages. “This deal forced all of the partners to sit down and hammer out how much equity would be recycled to the next generation,” says Michael Weinberger, a partner at York who heads up the firm’s U.S. equities and worldwide event-driven businesses. For Costco’s Galanti, the sale didn’t give him a moment’s pause. “It created an opportunity with Credit Suisse, and not just for Jamie but for the key individuals under him,” says Galanti. “And my sense is that retirement is still many years away for Jamie.”
Similarly, Jerry Davis, CEO of the City of New Orleans Employees’ Retirement System, says the deal has not raised any red flags for him. “It’s not something that our consultants even alerted us to. The only way we would have concerns would be if we felt the acquiring company were going to assert some inappropriate influence over the investment practices of the firm,” says Davis, who has been a direct investor with York for the past four years and says that York’s transparency and detailed reporting of how they have made money has been exceptional.
Nonetheless, a handful of investors continue to suspect that the deal was about nothing more than Dinan and his partners cashing out and that the group will lose its incentive to continue generating returns the second it receives its back-end payments.
“We don’t like any firm selling out; we just think it’s a bad sign,” says the chief investment officer for one of York’s major institutional investors. In fact, he says his institution is considering creating a rule that if a firm sells part of itself, he will withdraw his institution’s capital. “We just prefer to be with firms that are independently owned,” he says.
“Right now the sale is kind of a nonissue, and the firm’s probably even more aligned than ever because the deal poured more money back into the funds. But in the long term, it creates an organization that’s less stable,” says a fund-of-funds investor in York. “They did this in a year that they both get capital gains treatment, whereas they might not have next year, and the expectation is that taxes are going to be going up.” Though York’s partners acknowledge that the deal’s timing was attractive since taxes are expected to rise, they insist the main reason for the sale was to better position the firm for the future.
Investors’ concerns about York are not limited to the Credit Suisse deal. Despite York’s consistent returns, many investors believe the firm’s portfolios have too much risk in them and that if the market goes down, York will get clobbered as happened in 2008. “Dinan’s generally looking for a reason to buy something, as opposed to reasons to short things,” says the fund-of-funds investor. Adds the institutional investor: “Having so much market risk in their portfolio is not the best quality to have, and as they get bigger and bigger, they’re in the same deals as everybody else.”
As is the case for other funds, the criticisms go back to what happened in 2008. “The problem Dinan had in 2008 was that they just kept taking in assets. But this was supposed to be a firm with an event-driven focus, so like a lot of firms they wound up investing in equities where the so-called catalysts just became looser and looser—and that’s part of the reason they got their head handed to them,” says the head of investing for one family office in York.
But perhaps the most surprising criticism from York’s investors is in regard to the firm’s decision on gating in 2008. “I don’t see their decision not to gate people as a positive the way that other people do,” says one of York’s institutional investors. “If they’re not gating or suspending, then potentially the longer-term investor can get hurt by that. So I have a tendency to gravitate to managers who are interested in locking up and retaining capital for longer in return for a discount.”
For the most part, investors have an overwhelmingly positive opinion of Dinan and the firm he has created—even those who believe York still has areas where it needs to improve. “Jamie’s a great guy, and I think he’s a wonderful person, and I like his philosophy on life and on investing,” says the institutional investor who is considering redeeming from the firm.
Praise for Dinan is not limited to investors but is shared by many of his peers as well. “Jamie’s the kind of person you want to do business with—a clean-cut, stand-up guy who is smart,” says the founder of one hedge fund firm who has known Dinan for years. “Before 2008, some of the high-flying funds with 20 people could raise a lot of money and nobody really cared about the culture of the firm. But now investors seem to care more about the culture and who they feel that they can trust,” he says, noting that sentiment is one reason York has been able to continue raising assets.
One part of York’s business that has long impressed investors is Dinan’s early focus on institutionalizing the firm. “Post-2008, investors are really focused on what I would call risk and enterprise risk, and I think the fact that at York we’ve been focused on this for the past six years really shows Jamie’s vision and foresight,” says Weber, emphasizing that Dinan was ahead of many of his peers in 2004 when he decided to create the role of president. Similarly, investors cite York’s decision to voluntarily register with the Securities and Exchange Commission ahead of the regulator’s requirement for hedge funds to do so by February 2006—which was ultimately shot down by the courts but will go into effect as part of the new financial reform legislation—as another indication that the firm has been proactive about its efforts to provide transparency. “They keep you apprised of things and are good at managing your expectations,” says the head of investments for another fund of funds invested in York. “When Jamie makes a mistake, he sits right down and straight up tells you, ‘that was a mistake’—like getting involved with the likes of GM or Chrysler. He’s not full of himself like some other managers.”
| William Vrattos : The whole we’re creating at York is greater than the sum of its parts |
Dinan’s efforts to create an atmosphere of teamwork among his employees and to ensure that York’s identity is about more than just him have helped the firm avoid the turnover of senior management common at most large firms. “When I came here nine years ago and interviewed with Jamie, he told me he wanted to create an institution that would outlast him,” says William Vrattos, a partner who heads up York’s credit business. At that time, York had only 20 employees and was just beginning to make the transition from a fund to a hedge fund firm. Vrattos believes that since then, Dinan has managed to create a solid foundation for a business that will outlast its employees. “We all realize that the whole we’re creating at York is greater than the sum of its parts,” says Vrattos. For Dinan, much of the firm’s success is due to the collegial environment within the firm and the long-term relationships among its management team, many of whom have worked together for much of the past decade. So close is the group that when Dinan and his family recently traveled to Israel for his oldest son’s bar mitzvah, several of York’s partners went as well. “You can put 10 superstars together overnight, but it’s going to take them a long time to work as a cohesive unit,” says Dinan. “Organizational and portfolio growth have to be more organic than I think most investors realize.” In investors’ minds, the entire identities, as well as returns, of some firms, such as Paulson & Co. and SAC Capital Advisors, are directly tied to their founders. But Dinan has spent years striving to ensure that York’s investors are as comfortable with the investment capabilities of Schwartz and the firm’s other partners as they are with his. Unfortunately, York didn’t have the luxury of waiting for Dinan’s retirement to put the success of his efforts to the test.
In the fall of 2009, Alan Cohen, the 49-year-old manager of York’s first private equity offering, the York Special Opportunities Fund, was forced to take a leave of absence when he was unexpectedly diagnosed with an aggressive form of leukemia. With the sudden departure of Cohen, who had joined York in 1998 and was widely known to be the firm’s No. 3 partner, York risked the possibility that nervous investors would redeem. Dinan assigned Vrattos to take over Cohen’s investment responsibilities, and York was quick to inform investors that there would be no disruption to the firm’s investment activities, but many investors were still uncertain.
“Even though we didn’t miss a beat, the outside world has seen too many instances where a star manager leaves and after the fact there’s real damage,” says Dinan. “The fund continued to do tremendously well, but investors were worried, and many left or put subscriptions on hold, and we were in essence put in a kind of a hold box, pending clarification that the fund wasn’t permanently or temporarily damaged.”
Cohen’s illness not only put the firm’s investment prowess to the test, it also led to a public display of York’s unique culture. In an effort to find a bone marrow match that could save Cohen, whose Ashkenazi Jewish background enhanced the difficulty of finding a match, York partnered with the Gift of Life Bone Marrow Foundation and Ezer Mizion, an Israeli charitable health care organization, to launch a widespread campaign encouraging people to register their DNA with the foundation’s donor pools to see if they were a match. Along with Cohen’s friends and family, York also helped to raise roughly $2.7 million for the foundations—a large portion of which came from the hedge fund community—in order to cover processing costs for the saliva-swab tests and blood tests used to identify matches. Despite the efforts, Cohen passed away on December 30, 2009, but more than 60,000 people signed up as donors with the bone marrow registries established in his name, and 40 transplants have since been scheduled. “Alan’s legacy is that almost on a weekly basis lives are being saved from matches from people who were trying to save him,” says Schwartz.
Despite being a billionaire, Dinan—whose $1.3 billion net worth ranked him #308 in a 22-way tie on Forbes’s 2010 list of the 400 richest people in America, a spot he shares with Avenue Capital Group’s Marc Lasry and Chilton Investment’s Richard Chilton Jr.— is still one of York’s first employees to arrive at eight o’clock each morning. He keeps his personal life fairly low profile, and those who know him best describe him as a down-to-earth, ordinary guy who never let success go to his head. In fact, on any given weekend, as the father of two sons and a daughter, Dinan says one of his favorite things is do-it-yourself projects around his house, which he often works on with his younger son.
One area in which Dinan has been willing to leverage his financial success is in the political arena. A longtime Democrat, he was one of the hedge fund industry’s top fundraisers for the presidential campaign of Barack Obama—whom Dinan praised at the time for the then-candidate’s potential to bring about promising changes for some of the country’s long-term problems. Two years later, Dinan remains a Democrat, but he shrinks a bit when asked about his political views. “Like many loyal Democrats, I have been disheartened by the populist rhetoric that I think has pervaded politics over the last two years,” he says. And he doesn’t see any easy fix for many of the biggest issues currently facing the country, such as the tax debate. “The way we need to fix our fiscal imbalance as a nation is under the concept of a shared sacrifice,” says Dinan, who is also on the board of the Alternative Investment Management Association, an industry lobbying group.
Like many of his peers, Dinan is an active philanthropist. He is a director of Publicolor, a nonprofit group that gets disadvantaged children involved in painting their own schools; chairman of the board of trustees of the Museum of the City of New York; and a member of the board of directors of the Hospital for Special Surgery. He’s also involved with the Christopher and Dana Reeve Foundation and maintains close ties to his alma maters, serving on Harvard Business School’s Board of Dean’s Advisors and the University of Pennsylvania’s Wharton Undergraduate Executive Board. Many of York’s partners also went to one or both schools.
Dinan’s school ties led to his discovery of Weinberger, who, like Dinan, completed his undergraduate degree at Wharton, did a brief stint in investment banking and then went on to get his MBA at Harvard Business School. When Dinan was looking to recruit new talent in 2000, deciding for the first time ever to purchase Harvard Business School’s résumé book, Weinberger’s résumé was among those that jumped out at him. Weinberger, however, had set his sights on larger, more-recognizable hedge fund firms and knew nothing about York when he received an e-mail asking him to come in for an interview.
“I met with Jamie and Dan and what was really appealing to me was that I thought they were both really smart people and visionaries,” says Weinberger. Shortly after the interview, he received an offer from Dinan, but it was far below other offers. Weinberger’s wife encouraged him to go back to Dinan and ask him to match the others, so he did. “Jamie said, ‘That’s really great that they’re offering those salaries and all those perks, but if you’re coming here, this is the offer,’” says Weinberger. Feeling that he needed to negotiate some sort of additional incentive, he made a deal with Dinan that if the New York Yankees made the World Series that year he would get seats to the game. Not only did the Yankees make the World Series that year, but they ended up playing the New York Mets. “I did not hear the end of how much money it cost Jamie to buy those tickets,” Weinberger says.
Dinan’s own sport of choice is skiing. Each winter he heads out West with his wife, whom he met during business school and began dating after inviting her to a Halloween party. He is also big on adventure travel. Earlier this year the family went to the Galapagos Islands, and in the spring they plan to hit Easter Island. “I’ve always had a vagabond soul,” says Dinan, adding that his alternate career choice would be running a nightclub in Casablanca.
He’ll always have York.
