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UBS Group (UBS) to Divest Quantitative Investment Strategies Unit
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UBS Group AG’s (UBS - Free Report) division — UBS Asset Management — has entered into a definitive agreement to divest the management of its Quantitative Investment Strategies (QIS) business to Manteio Partners LLC and its affiliates.
The transaction is expected to close in the fourth quarter of 2024, subject to regulatory and shareholder approvals and other customary closing conditions.
UBS’ QIS team currently manages approximately $1.5 billion in assets, which will be transferred to Manteio Partners. Following the completion of this deal, Manteio will oversee the investments of QIS funds and mandates while operating as an independent unit under Manteio.
In the second quarter of 2024, UBS’ asset management segment’s operating profit before tax surged 64.6% year over year to $130 million. The rise was mainly driven by the consolidation of Credit Suisse revenues and a net gain from the initial portion of the sale of the Brazilian real estate fund management business.
This decision aligns with UBS Group’s overall strategy of streamlining its operations focusing on its core functions after acquiring Credit Suisse in 2023.
UBS’ restructuring plan suggests that it is likely to wind down its Non-Core and Legacy portfolio, releasing more than $6 billion of capital by the end of 2026. Through these efforts, the company aims to achieve gross cost reductions of around $13 billion by 2026-end compared with 2022 levels.
Further, a gross cost savings of $0.9 billion was accomplished by the Swiss banking giant in the second quarter of 2024, which brought the total to a yearly exit rate gross cost savings of $6 billion compared with the combined cost base of Credit Suisse and UBS in 2022. The management anticipates achieving around $7 billion of gross cost savings at the end of 2024.
Last week, UBS announced that it would liquidate a flagship real estate fund it acquired when it bought Credit Suisse. The move came as the latest indication of the turmoil brought on by investors withdrawing their money from slumping commercial real estate markets. The fund, which comprises offices for four-fifths of its assets, has redemption requests from investors. However, the bank stated that fulfilling those demands would need selling assets at an “inopportune time,” which would affect current investors. UBS Group determined that closing the entire fund was preferable.
In June 2024, UBS Group announced that it is re-aligning its wealth management business to improve its offerings for ultra-rich clients. It also announced that it would establish a division named GWM Solutions to consolidate different products for clients, starting Jul 1. This new unit will have alternative products from both its wealth and asset management businesses, including real estate and private market investments.
These efforts will allow UBS to focus on its core activities while strengthening its financials in the long run.
In the past six months, shares of UBS Group have returned 9.3% on the NYSE compared with the industry’s growth of 12.2%.
Last week, Navient Corporation (NAVI - Free Report) agreed to divest its Healthcare Services business to CorroHealth, a leading health technology company. The move is part of NAVI's ongoing plan to streamline its business operations.
The Healthcare Services business will be acquired for $365 million in cash consideration and is expected to be completed by the end of September, subject to customary adjustments.
Citigroup Inc. (C - Free Report) recently announced its plans to divest its trust business, a unit within its private banking operations, which manages trust and estate planning needs for its ultra-wealthy clients. The bank confirmed this to Barron’s on Aug 8. This process aligns with C’s extensive, multi-year restructuring plan under the leadership of CEO Jane Fraser.
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UBS Group (UBS) to Divest Quantitative Investment Strategies Unit
UBS Group AG’s (UBS - Free Report) division — UBS Asset Management — has entered into a definitive agreement to divest the management of its Quantitative Investment Strategies (QIS) business to Manteio Partners LLC and its affiliates.
The transaction is expected to close in the fourth quarter of 2024, subject to regulatory and shareholder approvals and other customary closing conditions.
UBS’ QIS team currently manages approximately $1.5 billion in assets, which will be transferred to Manteio Partners. Following the completion of this deal, Manteio will oversee the investments of QIS funds and mandates while operating as an independent unit under Manteio.
In the second quarter of 2024, UBS’ asset management segment’s operating profit before tax surged 64.6% year over year to $130 million. The rise was mainly driven by the consolidation of Credit Suisse revenues and a net gain from the initial portion of the sale of the Brazilian real estate fund management business.
This decision aligns with UBS Group’s overall strategy of streamlining its operations focusing on its core functions after acquiring Credit Suisse in 2023.
UBS’ restructuring plan suggests that it is likely to wind down its Non-Core and Legacy portfolio, releasing more than $6 billion of capital by the end of 2026. Through these efforts, the company aims to achieve gross cost reductions of around $13 billion by 2026-end compared with 2022 levels.
Further, a gross cost savings of $0.9 billion was accomplished by the Swiss banking giant in the second quarter of 2024, which brought the total to a yearly exit rate gross cost savings of $6 billion compared with the combined cost base of Credit Suisse and UBS in 2022. The management anticipates achieving around $7 billion of gross cost savings at the end of 2024.
Last week, UBS announced that it would liquidate a flagship real estate fund it acquired when it bought Credit Suisse. The move came as the latest indication of the turmoil brought on by investors withdrawing their money from slumping commercial real estate markets. The fund, which comprises offices for four-fifths of its assets, has redemption requests from investors. However, the bank stated that fulfilling those demands would need selling assets at an “inopportune time,” which would affect current investors. UBS Group determined that closing the entire fund was preferable.
In June 2024, UBS Group announced that it is re-aligning its wealth management business to improve its offerings for ultra-rich clients. It also announced that it would establish a division named GWM Solutions to consolidate different products for clients, starting Jul 1. This new unit will have alternative products from both its wealth and asset management businesses, including real estate and private market investments.
These efforts will allow UBS to focus on its core activities while strengthening its financials in the long run.
In the past six months, shares of UBS Group have returned 9.3% on the NYSE compared with the industry’s growth of 12.2%.
Image Source: Zacks Investment Research
At present, UBS Group carries a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Finance Firms Taking Similar Steps
Last week, Navient Corporation (NAVI - Free Report) agreed to divest its Healthcare Services business to CorroHealth, a leading health technology company. The move is part of NAVI's ongoing plan to streamline its business operations.
The Healthcare Services business will be acquired for $365 million in cash consideration and is expected to be completed by the end of September, subject to customary adjustments.
Citigroup Inc. (C - Free Report) recently announced its plans to divest its trust business, a unit within its private banking operations, which manages trust and estate planning needs for its ultra-wealthy clients. The bank confirmed this to Barron’s on Aug 8. This process aligns with C’s extensive, multi-year restructuring plan under the leadership of CEO Jane Fraser.