UBS Is Cutting Asset-Management JobsBy , , and
Firm redirects resources to passive products, sustainability
At least 100 jobs said to have been eliminated already
UBS Group AG’s asset-management head Ulrich Koerner is adding job cuts to a raft of initiatives intended to turn around the 792 billion-franc ($807 billion) business.
The Swiss bank is trimming jobs as it focuses on growth in China and lower-margin passive and sustainable investing, according to people with knowledge of the matter. The unit eliminated at least 100 positions in areas including distribution during recent months, one of the people said, asking not to be identified because the cuts are private.
Koerner has been working to overhaul the unit since 2014, disposing of assets and pushing into passive-strategy products, which now account for almost 40 percent of assets managed. While the focus on those investments has helped reverse outflows, it’s also reduced margins. The business missed first-quarter profit forecasts and has the highest cost-to-income ratio of any UBS unit.
About 30 of the cuts were in the U.S., with many in New York, two of the people said. The unit had 2,361 employees at the end of March, according to filings.
UBS asset management offers active and passive funds and is the smallest of the bank’s units, dwarfed by the wealth-management empire, for which it manages 210 billion francs, or 27 percent of its invested assets. Koerner’s unit had about 21 billion francs in outflows in 2015 and 2016.
“We don’t comment on adjustments that we make over time and are focused on serving the needs of our clients, growing our business and improving efficiency,” UBS spokeswoman Sheryl Lee said by email.
Koerner has initiated about 90 measures to revive the business. Apart from the focus on passive strategies and Asia, he launched a platform for other banks to outsource asset-management services and hired a team from RobecoSAM to boost sustainable-investing products. Earlier this year he started a platform dubbed UBS Partner, which helps other financial institutions analyze client portfolios. UBS won Banca Generali as its first client.
The lender is also exploring strategic partnerships in asset management, according to two people familiar with the matter. UBS declined to comment on specifics.
Growth in Asia has been a particular focus for Koerner. Last year the bank secured a private funds license in China, allowing the investment unit to start managing money for mainland institutional and high-net-worth investors in Asia’s largest economy.
UBS has a long history in the country and claims to have been the first Swiss-based bank to establish a presence in the Asia-Pacific region in 1964. In January, Chief Executive Officer Sergio Ermotti said that it’s ahead on a plan to double headcount in the country.
The asset-management unit currently manages 159 billion francs in the Asia-Pacific region, or roughly 20 percent of the total, and some of the best-performing funds are centered around China equities.
“UBS’s fund performance is only average but they have some strong spots, for instance some well-performing Chinese and European equity funds,” said Barbara Claus, an analyst at Morningstar.