UBS Hires More Barclays Nepo Hires
There was some level of hope that the earlier UBS US RBC biotech hires were a step in the right direction, since although one was ex-Barclays, A) it was in the HC space, which UBS has had momentum in/improved in over the past year or so, and B) they aren't directly coming from Barclays. However, their two latest hires of who are fairly junior MDs that are coming over from Barcalys very recently, have shown that it's just the same old. One M&A MD with 2 years of experience as an MD and a new head of Americas M&T MD, whose latest role wasn't even IB. UBS is just donating money to these ex-Barclays people at this point. Sergio wants to expand US IB and is clearly putting tons of money into it, but the nepotism is getting in the way despite all the capital investment in bringing in new MDs.
It might be the single most inefficient capital-wise growth strategy in the US (look at UBS tech for instance, which is mostly Barclays hires and has no flow). Most hires from Barcalys haven't bought in any fees, and any hits they have had are basically due to luck. I am not saying that UBS aggressively investing capital is a bad thing for the franchise as a whole, per se, just more so saying that it's clearly inefficient capital allocation due to nepotism.
Sources on the new hires:
https://finance.yahoo.com/news/ubs-hires-evan-raine-head-204149610.html
At least UBS is trying to grow, unlike a lot of other firms in the US. I understand the hires might not be ideal, but I would rather go to a firm aggressively trying to grow as opposed to one not even trying.
Marcos UBS Checklist:
1.Hire all my buddies from Barclays and a couple that I know from other banks (check)
2. Lose 50% of America’s fee revenue this year (check)
Agree on number 1, though I don't know what you mean by couple he knows from other banks... It's basically all been Barclays hires or hires bought over by other Barclays people. I think number 2 is a bit disengenuous to blame on MV and also a bit of an exaggeration, as it's more so due to a structural failure of the bank. The death of the LevFin markets has been the main reason for what will probably be a lower fee quarter when earnings come out tomorrow. The vast majority of deals (and associated fees) for UBS, even pre-merger, were due to sponsor fees/deals or sponsor-adjacent deals. When Sponsors don't do anything (like right now, where LevFin markets have completely died), UBS is disproportionately affected since maybe like 80% of the banks' flow is from some kind of sponsor activity. The fact of the matter is that UBS simply doesn't win or get any fees from corporate business, bar maybe 2 or 3 coverage groups.
I think what you can blame MV for is his terrible hiring. He came in saying he wanted to expand UBS's deal flow to include more corporates and certainly has been given ample capital and time to do so... he simply hasn't, to a large extent (obviously some corporate flow improved, but going from basically 10% to like 20% isn't enough especially given the huge capital investment into US IBD).
Not disingenuous, just data
No dog in this fight, but dude called the blaming on MV disingenuous, which can be true as well as what you're claiming. Not sure if these are mutually exclusive claims.
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