No comment from either UBS or State Street on asset management merger talk

A report from Reuters news agency in New York claims that Swiss bank UBS has discussed merging its asset management business with that of State Street Corp of the US.

The report yesterday, quoting “two people familiar with the situation”, said the talks fell through in June. UBS had $599bn in assets under management as of June 30 and State Street had $1.9trn.

UBS’ asset management business is known for its active asset management style, while State Street has built its profile mainly in passive or indexed products.

Reuters said a UBS spokeswoman referred a request for comment to a statement made by UBS Chief Executive Sergio Ernotti during the company’s Q2 earnings call, in which he said the bank’s strategy “builds on the strengths of all our businesses, including our diversified asset management business”.

The UBS spokeswoman declined to comment on the discussions with State Street, and a State Street spokeswoman also declined to comment. UBS indicated earlier this year it needed to raise roughly $16bn to meet new capital rules.

The Reuters report has been widely commented on in blogs and business pages in the US, with one commentator noting that “both groups would want to come out on top”, and another saying that while UBS may be committed to its asset management business, it clearly wants a “transformational deal”.

There have been no further statements from either firm since the Reuters report.



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