UBS is planning to open a New York fund administration unit this summer as part of a continuing global expansion plan for its Fund Services business. Mehdi Elofir, a director in UBS Fund Services Cayman office, is relocating to New York to run the office, according to Darren Stainrod, head of UBS Fund Services.
The New York office is expected to service primarily single-manager hedge funds, although it will not target any specific types of client, Stainrod says. It is tentatively scheduled to open July 1.
UBS considered selling its Fund Services business several years ago but opted to commit to the business instead by building up its core business development services and expanding geographically as well, Stainrod says. Last year the division opened a business development office in Hong Kong and an operations office in Singapore. Going forward, it will consider potential growth opportunities when they are the right fit with an eye on Texas, in the U.S. West Coast and in Brazil, depending on the performance of the New York office, according to Stainrod.
It bucks the recent trend among big banks, with speculation swirling that some institutions are looking to sell their fund administration units in order to focus on their core businesses.
Stainrod says the firm committed to the fund administration business because it diversifies the UBS product offering. It is a more constant revenue stream than asset management, which can be at the mercy of performance fees and cyclical swings, Stainrod says.
UBS Fund Services has about 200 employees in North America already, with about 150 in Cayman and 50 in Toronto. Initially, the New York office will comprise about ten employees, with gradual growth thereafter. In addition to Elofir, UBS will relocate a handful of employees from the other North American offices to New York and recruit new hires locally, Stainrod says.
While U.S. clients have been satisfied being serviced by the other North American offices, having a local presence is becoming more important in the single-manager, daily environment, Stainrod says. Being able to go down the road, visit the administrator, kick the tires and discuss issues and meet the people on a much more regular basis is certainly something that is recognized as important, he says.
Weve already got quite a few of our current clients interested in having the more local service, so we do expect the office to be successful and grow quickly.
(CG)