UBS Chief Executive Oswald Gruebel has said that UBS will focus on larger, established hedge funds in order to scale down risk. In a briefing on Q2 earnings, Gruebel said that we’re aware it’s balance-sheet intensive – and that’s why we’re becoming more selective on the clients we are offering prime brokerage”.
The UBS Quarterly Report also stated that there has been de-leveraging in the prime brokerage business.
The Global Custodian Prime Brokerage Survey 2009 previously highlighted that a reversed strategy from UBS, in favour of fewer, but larger and more profitable clients has shrunk what was once the fastest growing client base in the bank by a fifth from 2008.
The number of staff has also decreased, with a shake-up at management level. Alex Ehrlich has swapped seats with Stuart Hendel, with the former becoming head of prime brokeage at Morgan Stanley. Hendel has taken over UBSs prime services business. Morgan Stanley has also recently poached John Carlisle, managing director of UBS Investment Bank’s prime services business based in Dallas.
Giles TurnerNews Editor