UBS Group's Arm to Divest O'Connor Business to Cantor Fitzgerald

Globe and Mail

2 days ago

UBS Group AG 's UBS subsidiary, UBS Asset Management (Americas) LLC, has announced a definitive agreement to sell O'Connor, its hedge fund, private credit, and commodities business, to Cantor Fitzgerald as part of its ongoing strategy to streamline operations.
The initial close of the transaction is expected during the fourth quarter of 2025, subject to regulatory approvals and other customary closing conditions.
Details of UBS's Divestiture Deal
The sale includes six investment strategies with approximately $11 billion in assets under management. Upon closing the deal, O'Connor's investment and support teams will transition to Cantor Fitzgerald.
Additionally, UBS Asset Management and Cantor Fitzgerald will work closely together to ensure a seamless transition for clients. As part of the agreement, UBS Asset Management and Cantor Fitzgerald will establish a long-term commercial arrangement, maintaining continuity for UBS Global Wealth Management clients. Following the sale, UBS will remain one of the leading alternative investment managers, with over $440 billion in invested assets across its Unified Global Alternatives, Global Real Assets, and Credit Investments Group businesses.
Aleksandar Ivanovic, president of UBS Asset Management, stated, 'We have substantial growth ambitions and are focused on expanding our differentiated alternatives capabilities where we are positioned to win at scale. In deciding to sell O'Connor, we considered several factors, including its strategic fit and growth potential within UBS, and have been guided by the best interests of investors.'
Ivanovic added, 'Our priority has been to select a buyer with complementary capabilities, culture and team, and we believe that Cantor Fitzgerald is strongly placed to take the O'Connor business forward.'
Blake Hiltabrand, Global Head of O'Connor, stated, 'This marks a pivotal new chapter for our business. As a cornerstone of Cantor Fitzgerald's alternative investment platform, the O'Connor team is excited about the opportunity to invest in and expand our capabilities while staying true to our roots as fundamental investors.'
Our Take on UBS Restructuring Efforts
The decision to divest the hedge fund unit aligns with UBS's overall strategy of streamlining its operations, focusing on its core operations following the acquisition of Credit Suisse in 2023.
According to its business restructuring plans, it is likely to wind down its non-core and legacy portfolio and aims to reduce non-core and legacy risk-weighted assets to below $8 billion by the end of 2025 and around $2 billion by the end of 2026.
In sync with its restructuring plan, in April 2025, UBS made a strategic partnership with 360 ONE WAM Ltd, one of India's leading wealth and asset managers. Under this arrangement, UBS will purchase warrants to acquire a 4.95% share and will sell its onshore Indian wealth business to 360 ONE, while clients based in Singapore will continue to be served by UBS Singapore.
Through these efforts, the company is well-positioned to enhance the client experience and unlock further cost reductions toward the end of 2025 and into 2026 as it delivers on its ambition of $13 billion in gross cost savings by the end of 2026.
Zacks Rank & Price Performance of UBS
Shares of UBS have dipped 2.4% against the industry 's 21.7% growth in the past six months.
Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Restructuring Efforts by Other Finance Firms
This week, Citigroup Inc. C, through its subsidiary Citibank Europe Plc, announced that Citi Handlowy has announced an agreement to sell its consumer banking business in Poland to VeloBank S.A. (Velobank). This transaction aligns with Citigroup's broader strategy to exit consumer banking and strengthen its focus on core operations.
The agreement involves the demerger of Citi Handlowy's consumer banking operations, including wealth management, micro business banking, credit cards, consumer loans, deposits, and assets under management, consumer clients of the brokerage business, branches, and other consumer-related assets to VeloBank. Notably, employees and branches of the consumer business of C will also transition to VeloBank S.A. upon completion of the transaction.
Likewise, in February 2025, SEI Investments Co. SEIC agreed to divest its Family Office Service operations to Acquiline Capital Partners LP (Acquiline) for $120 million.
The family office business of SEIC will continue to operate as Archway upon completion. Under the terms of the transaction, employees based in SEI's Indianapolis, Denver and Oaks offices, including key members of the leadership team, will transition to Aquiline along with the business.
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