Dive Brief:
- Swiss bank UBS will sell O’Connor, its hedge fund, private credit and commodities business, to financial services firm Cantor Fitzgerald, the bank said Wednesday.
- The deal will “significantly bolster” New York-based Cantor Fitzgerald’s asset management arm, adding $11 billion in assets under management, the acquiring firm said in its release. The transaction is expected to close during the fourth quarter, subject to regulatory approvals and closing conditions.
- Terms of the deal weren’t disclosed. The bank said it will recognize an immaterial gain from the sale.
Dive Insight:
The divestiture reflects UBS’ effort to slim down operations following the 2023 Credit Suisse merger. The lender is also facing tougher capital requirements in Switzerland.
“In deciding to sell O’Connor, we considered a number of factors, including its strategic fit and growth potential within UBS, and have been guided by the best interests of investors,” said Aleksandar Ivanovic, president of UBS’ asset management arm. “Our priority has been to select a buyer with complementary capabilities, culture and leadership team.”
The deal returns O’Connor to the purview of Bill Ferri, a UBS veteran and founding member of the O’Connor business. He’s now the global head of Cantor Fitzgerald asset management.
“We believe our knowledge of and experience with O’Connor uniquely positions us to grow this business, focusing on attracting and retaining investment talent, investing in a flexible, unconstrained operating platform, and delivering attractive risk adjusted outcomes and best-in-class client service,” Ferri said.
Post-deal close, O’Connor’s investment and support teams will move to Cantor Fitzgerald, with O’Connor operating as a distinct alternatives business within Cantor Fitzgerald’s asset management unit, the acquirer said.
O’Connor capabilities will continue being offered to UBS global wealth management clients, and the asset management units of both the bank and Cantor Fitzgerald will establish “a long-term commercial arrangement” as part of the agreement.
“The acquisition of O’Connor is transformational for our asset management business and demonstrates our commitment to investing in attractive growth businesses,” said Cantor Fitzgerald Chairman Brandon Lutnick in the release. “With our leadership team’s deep familiarity with O’Connor, we are well-positioned to build upon the business’s strong foundation and drive its next phase of growth.”
In April, Cantor Fitzgerald said its investment bank, Cantor, would acquire Canaccord Genuity Group’s U.S.-based wholesale market making business. Cantor Fitzgerald is now majority owned by Howard Lutnick’s children, after the former CEO and chairman became secretary of the Commerce Department and transferred his ownership stakes in the company.
