Growth of UBS??
I have been reading up on UBS and looking at the recent league table rankings it has grown and is now back in the Top 6/7 for overall M&A dealflow. What are some views on UBS? Are people bullish on UBS growing in the coming years post Covid while other banks struggle with high default rates?
UBS just released incredible earnings for ECM, DCM, and credit trading. Its S&T revenue in 2020 Q2 has been remarkable, and it ranks best in Europe for Equities and FX trading. True, its Investment Bank is smaller than most, with the focus being on Wealth Management; but it’s faring incredibly well in Europe whereas others (Barclays, Deutsche) are really struggling.
UBS restructured their IB last year and hired over 20 MDs this year alone. They cut down in coverage groups and really focused on industrials, tmt, and fig. Also, because they have a pretty good ECM group, they’ve been working a lot with SPACs.
M&A deal flow is lumpy and a single good year is not really indicative of a wider trend
In revenue terms they are still smaller than DB, WF and even Jefferies
Current SA and can say we have been winning a lot of mandates lately of all varieties. We have consistently been top 10 in global M&A this year. We are working on a ton of SPACs and even have a few high profile RX mandates. Yes, UBS has an RX team within LevFin. Small team of ~7 but one of the few BB who focus in RX. They take 1-2 SA. Coverage groups at the firm get to work on the RX deals as well.
We also have a new CEO coming in later this year. I am not sure on his intentions with IB but Sergio Ermotti (current CEO) wanted to downsize IB and focus on WM. Hopefully the new CEO (Ralph Hamers) will look to grow the investment bank
Friend at the firm is in a coverage group and he's super busy. As mentioned above, they work on w all products (including Rx). UBS decided to focus on Industrials, TMT, FIG, and Consumer so those groups (Industrials is top) are really busy. LevFin, ECM is really strong as well
Heard the firm is building out an arena in NYC for the islanders, the name “UBS Arena” has a lot to be desired but it seems to show a strong commitment to their NYC franchise
We all realize that UBS isn't actually building the arena right? They bought the naming rights for publicity/advertising
I thought that’s what UBS industrials is all about
UBS took Bill Ackman public, largest SPAC IPO in Wall Street history. Definitely have landed some major deals this year
You should know that the only banks where exits are "usually UMM" are GS / MS / Evercore type places
Consumer is not strong in the US, their London consumer is solid though from what I hear. UBS has three primary coverage groups: TMT, Industrials, and FIG that are standalone and does their own modeling internally, each group has also been expanding with many MDs being poached. Every other coverage sector is put into one group and their modeling is handled by the product teams. UBS strategy is essentially to focus their resources into a few groups that has historically driven their IB revenue, and consumer isn’t one of them.
Levfin/Sponsors and FIG are probably the crown jewel groups. FIG is crazy on SPACs and was on the 4 billion Pershing IPO, friend there is getting wrecked with the amout of work and deal flow he's on. Levfin has good historical relationships and the sponsors team is strong and has done well given covid situation.