In a move that will not only see UBS Capital target far more third party funds but also enjoy complete autonomy in its investing and divesting decisions, the private equity business has announced it is becoming an autonomous investment management firm. It will be 80 per cent owned by UBS Capital's current management and 20 per cent by UBS. The business will be given a new corporate identity during the third quarter of 2001.
UBS said in a statement that the business model was “designed to best capture the opportunities available from the growth of the international private equity market, and the strength of demand for this asset class”.
UBS was also keen to point out that this new fund advisor will remain strongly affiliated with both the bank's private client and investment banking businesses. UBS has said that individual clients will be supplied with a range of proprietary private equity products, while maintaining complete freedom of choice to select private equity investments from other providers. UBS Warburg will continue to benefit from IPO and M&A referrals.
UBS has also said that it will raise its target overall commitment to private equity investment from CHF5bn (E3.3bn) to CHF7.5bn.
UBS Capital reported a CHF56m pre-tax profit in the fourth quarter of 2000 with the fair value of its portfolio rising to CHF6.9bn on investments of CHF5.5bn. It claimed unrealised gains of CHF1.3bn.