All articles by PBI Editorial
PBI Editorial
Hedge funds’ sheen is tarnished
In a year hedge funds were unable to deliver the absolute returns they promise and with clients becoming increasingly frustrated, private banks are looking at new ways of adding value One of the options is investing in fund of funds, but even they are not without their drawbacks.
UBS seen as potential takeover target
A failure by UBS to recover strongly in coming months after writing off $37.5 billion of US mortgage-related debt could trigger a takeover bid, radically altering the balance of power in private banking.With $1.8 trillion of client assets, UBS would put a bidder from among its competitors in an unassailable position. Analysts believe if UBS fails to deliver, then the cheap level of its stock off more than 50 percent in the past year will inevitably attract acquisition interest UBS is valued at only about $70 billion significantly below the $110 billion acquisition of ABN AMRO last year by the Royal Bank of Scotland consortium.Peter Kurer, successor to the outgoing UBS chairman Marcel Ospel, says it will take up to three years to put UBS back on track, a timescale considered by some analysts as far too long.The bank has issued a mea culpa in the form of a 50-page report detailing the cause of its write-downs, and said at its annual general meeting it would scale back its investment bank as a result of the losses But onetime UBS president Luqman Arnold, who is lobbying to break up the company, has received significant support in senior institutional investment quarters.Kurer, a lawyer rather than a banker, is still seen as an interim figure by many, and the new chairman will have to make good on his promise to appoint board members with more relevant knowledge bases if activist shareholders are to be placated.While few banks would have the clout to acquire UBS, HSBC may overcome likely Swiss political opposition to launch a bid
UBS takes $10bn subprime hit
Battered by the US subprime mortgage crisis, UBS has disclosed a shock $10 billion in additional write-downs and secured an emergency capital injection from the Singapore government and an unidentified Middle East investor.UBS plans to raise CHF13 billion ($11.5 billion) from selling bonds convertible into shares The Government of Singapore Investment Corporation, which oversees the Asian states foreign reserves, will invest CFH11 billion in the Swiss bank for a 9 percent stake The Middle East investor, variously reported to be from Saudi Arabia or Oman, will put in CHF2 billion.In a boost for UBS, the bank disclosed an accelerated flow of new money from its private clients despite the subprime crisis
Widmer becomes Baer Bank CEO
He becomes CEO executive of Baer Bank, heading its two main divisions private banking and investment products.At the same time, the Swiss bank is putting a holding structure into place above Baer Bank, with current CEO Johannes de Gier, 63, remaining CEO of the overall group.The move was triggered in part by the hire of former Clariden Leu banker Beat Wittmann earlier this year, who is building an investment advice division for private clients within the private bank.Former UBS banker David Solo will remain CEO of hedge fund manager GAM and US-based equities fund Julius Baer Investment Management, which has $71 billion in assets
Advisers get jittery over subprime problems
Big banks such as UBS, Citigroup and Merrill Lynch may find that some of their private banker advisers, unsettled over their companies deep embroilment in subprime write-offs, are increasingly ready to switch jobs.Merrill has become the latest casualty, preparing to write down $5 billion in subprime loans, complex debt instruments and leveraged loans UBS has already announced a $3.4 billion write-down and Deutsche Bank $3.1 billion.The Merrill write-down has caused frustration among its 16,000-financial advisers, who feel they make money for the bank while the investment bankers take risks that lead to painful write-downs.At UBS, some advisers are similarly said to be disenchanted at their banks exposures to subprime-related lending which makes it tougher to maintain private client confidence in the group
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UBS drops plan to buy StanChart Indian funds arm
UBS has abandoned its planned acquisition of Standard Chartereds (StanChart) Indian mutual fund management business at a price of about $129 million, apparently after regulatory opposition from the Reserve Bank of India (RBI) If confirmed, this will represent one of the most embarrassing setbacks for a global private bank operating in Asia since Citigroup was closed down in Japan in 2004 because of regulatory infractions.A new buyer will be sought for the $3.5 billion funds business, which StanChart stressed has continued to grow and operate normally Goldman Sachs, Credit Suisse, Morgan Stanley, ING, Deutsche Bank and Schroders are believed to be among potential bidders.The two banks decided not to continue negotiations after the sale and purchase agreement they concluded in January 2007 expired, UBS said
ANZ to create global wealth arm
ANZ Banking Group is to create a global wealth management division, catching up with other Australian banks which have been moving into international private banking.ANZs domestic Australian joint funds management venture with the Netherlands ING will not be ended by the move, ANZ said ANZs existing wealth management business, including its joint venture with ING and the private banking division, will be part of the lenders Australian division.A separate Asia-Pacific division will develop ANZs Asian wealth management arm.The wealth venture, for which no commencement date has been set, is aimed at complementing ANZs ambition to become an Asian super-regional bank, a spokesperson said.Under a new structure for the bank, ANZ plans to organise around its three geographies Australia, New Zealand and Asia-Pacific, and its global institutional client business
ABN AMRO brand gets ready for return
ABN AMRO will be promoted as a major private banking player again, after the Dutch government announced plans to revive the long-standing Netherlands financial services brand. But after one consortium member, Fortis, ran into difficulties amid the financial crisis this summer, a major part of the Fortis Belgium and Luxembourg operations was sold to BNP Paribas.
News Digest
UBS enters Dutch market…Merrill, Deutsche seek Russian clients…Vaduz moves to end EU tax fraud dispute…Client list hits JPMorgan LatAm operations…Taipei wants to be Asian financial hub…NetherlandsUBS enters Dutch marketUBS is acquiring VermogensGroep, an independent Dutch wealth manager to form what it said would be one of the leading wealth firms in the country
Banks follow the money to Hong Kong
Big Asian sovereign wealth funds have plenty of clout to help bankroll acquisitions and other transactions, bankers point out. While Citigroup, Morgan Stanley and other firms have been relocating senior executives to Hong Kong, Deutsche Bank has made the strongest commitment, announcing plans to raise its head count in the city to 4,000 from the current 1,500. Colin Grassie, CEO Asia Pacific for Deutsche said, We are experiencing rapid growth in the region and in Hong Kong in particular. Deutsche wealth head Pierre de Weck said that his private banking expansion in the region would call for 200 more staff. Within private banking, the whisper in Asia is that some wealth managers are quietly moving back to Hong Kong from Singapore because the costs in the latter are becoming too high, even compared to expensive Hong Kong. The one-time British colony has long held claim to being Asias leading wealth management centre in terms of fund management, with 80 fund houses currently operating there, including firms from the US, Britain and Switzerland.Perfectly positionedA big attraction is that fund managers can leverage Hong Kong to tap the huge domestic savings of China.But Singapore is considered to have the lead in classic private clients banking, with some 50 foreign and domestic banks offering services out of the city-state.The latest entrant to the Hong Kong funds business is Britains Threadneedle, which manages $125 billion of assets