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UBS seeks more deals among billionaires through new U.S. venture

UBS starting a new venture at its U.S. operation, marrying its wealth management unit and investment bank to capture more deals and trading activity among its ultra-rich clients.

The move will merge capital-markets teams across wealth management and the investment bank in the U.S., while creating a single trading platform for all clients in the Americas, according to a memo sent to staff on Thursday. Mark Sanborn, Dylan Roy and Reinhardt Olsen will jointly oversee the strategy, and the changes will be phased in during the third quarter.

UBS has long been trying to wed the two divisions and lean on one of the world’s largest wealth managers, which oversees $2.4 trillion in assets, to help counter weaker deal fees. It created its Global Family Office unit almost eight years ago to sell the firm’s funds and dealmaking advice to its wealth clients. Rival investment banks, such as Goldman Sachs and Morgan Stanley, are also leaning on their units that manage funds for the super rich, often selling companies for wealthy clients or courting money for closely held firms.

The UBS Group AG logo sits on the bank's skyscraper offices in Frankfurt, Germany, on Tuesday, July 17, 2018. Frankfurt's efforts to attract bankers escaping Brexit are in danger of losing momentum. Photographer: Alex Kraus/Bloomberg
The UBS Group AG logo sits on the bank's skyscraper offices in Frankfurt, Germany, on Tuesday, July 17, 2018. Frankfurt's efforts to attract bankers escaping Brexit are in danger of losing momentum. Photographer: Alex Kraus/Bloomberg

The revamp is “focused on spurring growth — particularly in our ultrahigh-net-worth, middle market institutions and public finance businesses,” Tom Naratil, co-president of global wealth management, and Rob Karofsky, co-president of the investment bank, said in the memo.

The wealth-management unit also has many clients in the middle market, an area where Goldman in particular has said it’s also trying to expand advice as big-ticket mergers and acquisitions begin to slow after years of setting records.

UBS said earlier Thursday that revenue at the investment bank tumbled 27%, hurt by fees tied to equity underwriting and merger advisory. Global wealth management was down 9%, but the unit attracted $22.3 billion of net new money, led by wealthy clients in the Asia Pacific region. Both divisions reported disappointing results earlier this year, missing consensus estimates for the fourth quarter of 2018.