UPDATE 1-Credit Suisse to buy stake in York Capital

* Credit Suisse to buy minority stake in York

* York will operate independently

* York founder and CEO Jamie Dinan to remain in charge

NEW YORK, Sept 14 (Reuters) - Credit Suisse Asset Management said on Tuesday that it will buy a minority stake in U.S. hedge fund York Capital Management.

Credit Suisse (CSGN.VX) will pay an initial $425 million for a non-controlling stake in York, according to the bank.

Credit Suisse will also pay more money to York over the next five years based on York's financial performance as well as retention payments for York executives.

York will operate independently and continue to be led by founder and chief executive Jamie Dinan.

The Swiss bank said it expects to provide distribution services for York funds on a non-exclusive basis.

New York-based York was founded in 1991 and manages approximately $14 billion.

The deal is expected to close in the fourth quarter of 2010. (Reporting by Helen Kearney. Editing by Robert MacMillan)