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UBS to hire 20 managing directors to boost investment bank

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UBS plans to bolster the most senior ranks of its investment bank to drive growth of coverage areas where it’s seeking to be more competitive.

The addition of 20 managing directors — who sit near the top of the unit’s hierarchy — will primarily be in the U.S. and take place over the next two or three years, people with knowledge with the plans said, asking not to be identified discussing a private matter.

UBS is hiring after deciding to narrow the focus of the investment bank on the consumer, industrial, TMT, and financial institutions industries, the people said. Co-heads Robert Karofsky and Piero Novelli are also tying the unit more closely to the wealth management business and seeking to boost cooperation between regions after cutting lower-ranking jobs and reshuffling management.

The bank declined to comment.

The securities unit, which relies on equities trading and deal advisory for Europe and Asia, has under-performed its peers in the last few quarters, prompting Chief Executive Officer Sergio Ermotti last week to say that the performance of the business has been unacceptable. Since taking over in 2011, the CEO has cut back capital-intensive trading in a pivot to wealth management.

Last year, the investment bank contributed about a quarter of revenue, but only 14% of pretax profit. Global wealth management, by contrast, accounted for a little under half of the top line and more than 60% of profit. The return on equity at the investment bank fell to 6.4%, while it was more than 20% in the wealth business, a number that’s been fairly steady.

UBS is building the top ranks of the investment bank even as it removes managing directors from its key wealth management business as part of a broad overhaul instigated by new co-head Iqbal Khan.

While UBS sees the U.S. as a strong growth opportunity, it’s also a region where the bank has struggled to keep up with peers with bigger balance sheets to strengthen their pitches. The Swiss bank ranks 25th among advisers for deals in the country in 2019, according to data compiled by Bloomberg. Former UBS investment chief Andrea Orcel had focused the bank on the retail, software and aerospace sectors in the U.S. during his tenure.

UBS last year split its investment bank to two segments: global banking and global markets. The new hires would be spread across newly-created teams in the banking division, the people said. Under the new structure, the teams report to global heads, in an attempt to encourage bankers from different regions to work together on cross-border deals that can generate the biggest fees.

These are UBS’s new global investment bank heads:

  • Terry Sullivan: Financial institutions, based in New York
  • Laurent Bouvier in London, Charles Otton in New York: global industries group
  • Ian Carnegie-Brown: Consumer and health care group based in London
  • Paul Crisci in the U.S. and Christian Leseur in London: TMT (Crisci also heads private financing markets)
  • Simona Maellare in London, Matt Eilers in the U.S.: private funds
  • Greg Pierce in Asia-Pacific and Marc-Anthony Hourihann in the U.S. Advisory and M&A
  • Brendan Connolly: public capital markets based in New York

--With assistance from Patrick Winters.

Bloomberg News