UBS acquires Luxembourg Financial Group

UBS has bought the Luxembourg Financial Group, whose flagship service includes a platform for the distribution of Ucits funds, for $36.2m.

The Swiss bank tapped up the Luxembourg-originated boutique structured products and asset management provider in a sale expected to close in the next three months, or the second quarter of 2011, subject to regulatory approval.

Under the terms agreed, UBS acquires 100% of the shares of parent company LFG Holdings SA.

LFG Group will fall into investment banking giant UBS’ global equities division, where the Swiss bank plans to expand its businesses in global equity derivatives and synthetic equities.

Part of the rationale for the move on UBS’ part is likely to have been attaining LFG’s flagship offering, its Liquid Alpha Ucits Platform (LAUP).

The platform has seen a number of hedge fund managers create Ucits-compliant versions of their flagship offshore funds, including London’s Sabre Fund Management and RAB Capital, Singapore’s Quant Asset Management, as well as New York-based CastleRock Asset Management and Act II Capital LLC.

Other managers lined up immediately to launch funds through LFG, now part of UBS, include RP Capital, Cornhill Capital and German-based Fortinbras.

UBS’ co-head of global equities Yassine Bouhara made it clear in a statement that the bank already has a structured product offering, so the purchase of LFG is a strengthening of its existing capabilities.

Aside from its increasingly popular Ucits platform, UBS will benefit from the expertise of LFG’s staff, who include former employees of Deutsche Bank.

LFG holds its main offices in London and Luxembourg, but also has two others, one in Stamford, Connecticut, and another in Manama, Bahrain. It is not known whether UBS will retain all of those.

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