US-based investment firm Yorkville Advisors has set up its first Asian office in Hong Kong with a team of six. While the office was informally opened in September 2008, the firm received licensing approval from the Hong Kong Securities and Futures Commission in March this year.
Yorkville is an “alternative capital fund” catering for all kinds of investment structures, Anthony Chan, managing director and head of Asia, said in an interview. The firm manages an unlisted, open-ended global fund which has different sub-vehicles.
Investors in Yorkville’s fund include institutions such as pension funds and endowments, and high net worth individuals.
The firm offers structured investments in the form of convertible debt, equity-linked instruments, bridge facilities, convertible preference shares and equity lines to public and private companies in the small- and mid-cap space globally. These investments are made in broad range of transactions, including growth and mature companies, special situations and management and leveraged buyouts.
The firm typically has a holding period of two to three years for its portfolio companies, according to Chan. However, the holding period varies on a deal to deal basis.
Yorkville is a flexible capital provider for investee companies, Chan said, adding that it is difficult to characterise the firm as either a hedge fund or a private equity fund. Some of the firm’s investments exhibit more private equity-like characteristics while others are similar to investments typically made by hedge funds, he added.
The fund has in the past participated in and looked at deals where private equity firms have invested, by either investing alongside them or providing debt for such deals. However, the firm’s primary focus is on proprietary deal flow, Chan says.
Yorkville has made about 40 investments in the Asia Pacific, primarily in Australia and a few in Singapore. The purpose of opening an office in the region is to provide financing options to companies at a time when traditional lending is scarce. Chan said that the firm sees a lot of opportunity in the region and therefore a local presence was desirable. Other Asian markets the firm will focus on include Japan, Korea and Greater China.
Before joining Yorkville, Chan worked at Lehman Brothers Asia where he was responsible for automotive, capital goods and heavy industries in the investment banking division. Prior to that, he was with Citigroup Global Markets Asia in the industrials group and the financial entrepreneurs group. He began his career with Credit Suisse First Boston in the M&A/ corporate finance group.
Established in 2001, Yorkville has other offices in Jersey City, London and Jupiter, Florida. It currently manages assets of approximately $900 million.