Shear’s decision to leave was announced yesterday by Carsten Kengeter, head of UBS’s investment bank, in an internal memo obtained by Bloomberg News. Dominik von Arx, a company spokesman, confirmed its contents. UBS promoted Aryeh Bourkoff, 38, to head investment banking for the Americas, succeeding Kevin Cox, according to a separate memo.
UBS last month named co-heads of equities and debt-trading units to jointly run the securities business, which Shear, 56, headed since January 2010. The Zurich-based bank, which had the least revenue from trading last year compared with its eight biggest rivals, needs to almost triple earnings at the investment bank by 2014 to meet targets set by Chief Executive Officer Oswald Gruebel.
UBS said yesterday it cut Kengeter’s total compensation for 2010 by 29 percent after Gruebel, 67, described the investment bank’s performance as “not yet satisfactory.”
When reached for comment on his mobile phone, Shear said, “I’m playing golf right now. I’ll have to call you back” and hung up.
UBS’s securities unit more than doubled its share of about $142 billion in global sales and trading revenue in 2010 from a year earlier as its fixed-income division stopped losing money. The share of 6.8 percent was the lowest compared with Citigroup Inc. (C), JPMorgan Chase & Co., Goldman Sachs Group Inc., Bank of America Corp., Morgan Stanley, Credit Suisse Group AG, Deutsche Bank AG and Barclays Plc, data compiled by Bloomberg show.
The investment bank tries to increase risk-taking to boost profit “only when sensible opportunities arise,” which hasn’t been the case over the past few months, Gruebel told the Swiss magazine Bilanz last week.
He said that he underestimated how long it would take to rebuild the business, which was mostly responsible for more than $57 billion in writedowns and losses during the credit crisis, and how “shattered” UBS’s fixed-income unit was.
Before UBS hired Shear, he had worked at private-equity firm Apollo Management LP for about 17 months. Prior to Apollo, Shear spent about 25 years at Morgan Stanley (MS), where he rose to a role overseeing sales and trading and was once the bank’s second-highest-paid executive.
Yassine Bouhara and Francois Gouws, co-heads of equities, will be responsible for the securities business with Roberto Hoornweg and Rajeev Misra, who run fixed-income, currencies and commodities trading, UBS said in a Feb. 24 memo.
UBS promoted Bourkoff in recent years as other bankers left. He was appointed co-head of media and communications investment banking with Mark Lewisohn in 2009, replacing Jeff Sine. Last year, Bourkoff and Lewisohn also took over the technology group after Brian Webber left the position and joined Moelis & Co., the New York-based investment bank founded by former UBS executive Kenneth Moelis.
Bourkoff, the joint global head of technology, media and telecommunications banking, started at UBS in 1999. He initially worked in the fixed income clearing group and later as an equity research analyst.
The technology, media and telecommunications team at UBS is advising British Sky Broadcasting Group Plc on its takeover by News Corp. Last year, it advised International Business Machines Corp. on its $1.7 billion acquisition of data-warehousing company Netezza Corp. and Dell Inc. on its $940 million purchase of data-storage company Compellent Technologies Inc.
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