By Sonali Basak
(Bloomberg) -- UBS Group AG is beginning a brand new enterprise at its U.S. operation, marrying its wealth-management unit and funding financial institution to seize extra offers and buying and selling exercise amongst its ultra-rich shoppers.
The transfer will merge capital-markets groups throughout wealth administration and the funding financial institution within the U.S., whereas making a single buying and selling platform for all shoppers within the Americas, based on a memo despatched to employees on Thursday. Mark Sanborn, Dylan Roy and Reinhardt Olsen will collectively oversee the technique, and the modifications might be phased in in the course of the third quarter.
UBS has lengthy been attempting to wed the 2 divisions and lean on one of many world’s largest wealth managers, which oversees $2.four trillion in belongings, to assist counter weaker deal charges. It created its International Household Workplace unit virtually eight years in the past to promote the agency’s funds and dealmaking recommendation to its wealth shoppers. Rival funding banks, similar to Goldman Sachs Group Inc. and Morgan Stanley, are additionally leaning on their models that handle funds for the ultra-rich, usually promoting firms for rich shoppers or courting cash for intently held corporations.
The revamp is “targeted on spurring progress -- notably in our extremely excessive internet price, center market establishments and public finance companies,” Tom Naratil, co-president of world wealth administration, and Rob Karofsky, co-president of the funding financial institution, stated within the memo.
The wealth-management unit additionally has many consumers within the center market, an space the place Goldman specifically has stated it’s additionally attempting to increase recommendation as big-ticket mergers and acquisitions start to gradual after years of setting data.
UBS stated earlier Thursday that income on the funding financial institution tumbled 27 %, harm by charges tied to fairness underwriting and merger advisory. International wealth administration was down 9 %, however the unit attracted $22.three billion of internet new cash, led by rich shoppers within the Asia Pacific area. Each divisions reported disappointing outcomes earlier this yr, lacking consensus estimates for the fourth quarter of 2018.
Different takeaways from Thursday’s memo:
Sanborn, head of funding platforms and options for wealth administration within the Americas, and Olsen, Americas equities chief, will collectively supervise institutional equities and regional institutional gross sales, in addition to household workplaces.
Roy, head of Americas overseas trade, charges and credit score, will deal with fixed-income buying and selling. That unit posted a shock bounce within the first quarter globally.
“Many of world wealth administration’s most refined shoppers want the form of institutional capabilities that the funding financial institution can present,” Naratil and Karofsky stated within the memo. “This new partnership will make us a extra aligned and more practical group.”
--With help from Patrick Winters.To contact the reporter on this story: Sonali Basak in New York at [email protected] To contact the editors chargeable for this story: Michael J. Moore at [email protected] Daniel Taub, Steve Dickson
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