UBS Loses 2 Global Co-Heads

Things are not going well

Absolutely agree, not sure why the MS. I think GIG will fine, assuming others don't leave alongside the GH, will be interesting to see if replacement is another Barclays banker or not, but otherwise will be fine. Perhaps also broadly an opportunity of further improve one of the few bright spots of the franchise in the US. It's prob still the best group to be in at UBS rn given the current Lev Loans downturn.

I think the HC build out is honestly going as well as it could've right now, even with the GH leaving the group, has improved market share (he left as head of the group a few months ago to be replaced by the current CR head). Also of note, HC has improved QoQ, which is not something many groups at UBS can say. Good idea for UBS to double down on it and keep investing in the sector. CR has also done well, but there's huge key man risk there. As you mentioned, all the other coverage teams need to be rebuilt, which is going to be a tough ask and perhaps an impossible task, given how incompetent most of the hiring strategy has been recently in the U.S at least.

It's striking how UBS has fumbled this opportunity; they are willing to invest a ton of capital in senior hires and are genuinely looking to grow the franchise, but the hires simply haven't been good in large part due to it basically being only ex-Barclays people. Good to at least see the firm is now hiring in areas where they have seen some level of success (HC) instead of money sinks hiring in groups like Tech, M&T, ECM, and M&A.

Everything the Barclays Bros touch turns to shit

I agree. WF also has made some phenomenal hires across IB, and seems to actually have a clear growth strategy that is working unlike UBS. They are actually investing in areas through strategic hiring instead of nepotistic hiring. I do acknowledge some hires bought in deals for UBS but rest ensured that's just due to blind luck and most hires on the guaranteed bonus from Barclays has been terrible. I don't even think WF has invested significantly more in hires than UBS over the last 12-18 months, straight up just has hired better. Yet another reason why this UBS leadership needs to go. Absolute misallocation of capital, if that money had gone into further improving groups that have actually had success in improving market share like HC,CR, Industrials or LevFin instead of money sinks perhaps UBS would be talked about the same way as WF is right now. 

del

What exactly are you hearing?

Hopefully true. Both Tech and M&T GHs are useless. Instead of lecturing juniors to come in early and to stop complaining about insane mid-level bankers, maybe try to generate some revenue? We’re waiting. We’ve been waiting.

In the meantime culture of the TMT teams continues to decline as all the good juniors leave for better opportunities (or any opportunity)

If there is a shake up, would be one of the best things the senior leadership has done because it at least shows they are learning, albeit slowly. Would also note guaranteed bonuses should be just about expiring for the early hires right about now. I don't think UBS is past the point of new return especially given the firm is still willing to be aggressive with hiring. It is crucial that UBS switches who it hires to be strategic hiring of actually strong MDs with transferable relationships. 

Gerry?

100%. The few true rainmakers that UBS has have been voting with their feet. Not good to be left with largely unproductive MDs. Our productivity per banker was already on the very low end vs peers. Will get even worse now

Clear UBS in particular can not retain top performers long-term (eg post gaurantees). So we’re left with seniors who are OK settling for UBS and / or forced to pay continued guarantees which hurt margins and the bonus pool for everyone else

True at the junior level too.. the best analysts/associates are hopping ship 

From my understanding, the people leaving are those who A) got low bonuses, or B) were in groups that are massively at risk of getting fired, or C) cases like this, where they lost the political battles. UBS is not doing terribly at retaining top talent, it's just that they are doing it in a very capital-inefficient way, in the sense that paying guaranteed bonuses and having to continue extending them is a terrible way to retain senior talent (obviously not the case for every rainmaker, but certainly the case for many).

Any juniors leaving is irrelevant, btw, to the quality of a franchise, but relevant to the junior experience. Nobody has any confidence in leadership, and a lot of people are scared of getting fired since this was historically a high year for people getting low bonuses. However, UBS retains most of its rainmakers outside the ones who lose political battles. The issue is more so that people are not being able to play nice, and that the winning of political battles is coming down solely to favoritism. 

I would expect a complete rebuild of some groups very soon. If I were still at UBS and not in one of LevFin/Sponsors, Industrials, HC, and CR:  I would be looking for a job right now.

Best one

Ye agreed. Might be a controversial opinion, but I think UBS will be fine in the long run, but worse off in the short run. It's simply too big of an overall bank, and this is a genuine, clear growth area for the firm with strong synergies with the firm's world-leading WM business. I think what we will see is that the failures will become even more obvious in 6 months to a year, new leadership gets bought in for IB and then more investment into the regions IB under new leadership.

The main thing with UBS as a franchise is that America is its weakest link. The franchise ultimately wants to grow overall revenues in America and is doing so aggressively in both WM and IB. I think the evident focus on actually investing capital into growing it + UBS's differentiation as the world's leading wealth manager means eventually it will at least go back to an actual top ~10 or so US M&A franchise. However, in the short run/medium run, it is simply not a good place to be. 

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