Ex-Goldman Partner’s Firm Says UBS Cuts Spoiled Partnership Plan

An asset management firm founded by former Goldman Sachs Group Inc. partner Vishal Gupta sued UBS AG, saying investment banking cuts at the Swiss lender have undermined a joint venture.

Decura IM Investments LLP is seeking to terminate a 2012 contract under which it would provide “managed accounts” and “algorithmic strategies” for UBS customers, according to the bank’s documents at a pre-trial hearing in London today.

UBS has undertaken a “drastic downscaling and disposal of its investment banking arm,” Decura’s lawyer Andrew Fulton told a judge as he sought an accelerated trial in the dispute. London-based Decura argues the bank is now “unable to market the services we are providing.”

UBS, Switzerland’s biggest lender, has cut about 4,000 jobs since late 2012 and is exiting most debt-trading activities while focusing on its wealth management business.

The Swiss bank said in court documents it “has not exited material product areas and maintains strong relationships in the relevant client areas.” Gupta didn’t immediately respond to an e-mail seeking comment and UBS spokeswoman Hana Dunn declined to comment on the case.

UBS lawyer Adrian Beltrami told the court it was too soon to set a timetable for the litigation and the bank needed more details about the claim. “The appropriate course is for a proper pleading of this case and a proper defense.”

Judge Richard Field said there should be another pre-trial hearing in July, when the court would consider the possibility of holding a trial in October.

Falling Out

Decura and UBS had “something of a falling out even before the venture was up-and-running,” Fulton said at the hearing. Hundreds of millions of dollars in revenue from the agreement are at risk and Decura is in a “position of limbo” until the issue is resolved, Fulton said.

The venture isn’t generating any money and an exclusivity arrangement means Decura can’t look elsewhere, according to its court documents.

Decura Group was founded in 2012 by Gupta, who previously worked at Goldman Sachs in a variety of roles including head of credit and equity exotics and fund derivatives.

The case is: Decura Im Investments LLP & Ors v UBS AG London Branch, High Court of Justice, Queen’s Bench Division Commercial Court, 14-561

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