Thursday, May 03, 2007

UBS Profit Falls as Hedge Fund Losses Hurt Bond Fees

i think ubs will be outperforming the other investment banks within the next few years. at the same time ubs is exiting the hedge funds business other players are increasing their exposure. and here is another interesting fact that ubs is more conservative than others

dieses beipiel zeigt einmal mehr das ubs die wohl mit abstand konservativste der großen investmentbanken ist. während andere banken zur gleichen zeit ihre hedgefondsaktivitäten ausweiten fährt ubs diese zurück. noch bemerkenswerter finde ich die nachfolgende statistik

ubs backing out of lbo madness http://tinyurl.com/2jr8nd

So far this year, UBS ranks 10th among LBO advisers after participating in 7.7 percent of announced deals by value, according to data compiled by Bloomberg. Goldman, the No. 1 M&A arranger for the past six years, is first, with 62 percent. Citigroup Inc., JPMorgan Chase & Co. and Credit Suisse Group, all commercial banks like UBS, each have more than 42 percent.


May 3 (Bloomberg) -- UBS AG, the world's biggest money manager, reported a third straight decline in quarterly profit and said it plans to scrap the hedge fund run by John Costas after losses in the U.S. mortgage market.

First-quarter net income fell to 3.28 billion Swiss francs ($2.70 billion) from 3.5 billion francs a year ago, Zurich-based UBS said today. That compares with the 3.3 billion-franc estimate of eight analysts surveyed by Bloomberg. Profit a year earlier was boosted by 290 million francs from the sale of a power company.

While Chief Executive Officer Peter Wuffli attracted a record 52.8 billion francs of new client money in the quarter, losses from Costas's hedge fund, Dillon Read Capital Management, led to a 7 percent decline in fixed-income revenue. UBS said it will close the hedge fund after 150 million francs of losses and give investors their money back.

>compared to other investvemt banks ubs looks like this ...

>verglichen mit anderen investmentbanken kommt mir ubs so vor...




i´m your animal spirit


``We concluded that the DRCM initiative did not meet our expectations,'' Wuffli said in a statement.

The losses at the hedge fund were ``related to the U.S. mortgage-backed securities market, which was obviously weakened by the U.S. subprime market,'' Standish said.



Shares of UBS have gained 8.7 percent in the past 12 months, trailing Credit Suisse's 20 percent advance and the 16 percent increase at Frankfurt-based Deutsche Bank AG.

>chart in €, in $ term the gap is closing to a few percent. so far the often extreme risk taking from players like goldman is paying of. but the perfect times don´t last forever......

>chart ist in €, aus sicht der us anleger schrumpft der vorteil auf wenige prozente. denke hier kann man schön sehen wie sehr sich bisher das oft extreme risiko das andere spieler eingehe ausgezhalt hat. die perfekten zeiten werden aber nicht ewig anhalten......


UBS shares down 4.4% after posting lower profit

disclosure: considering a long position in ubs and a short in goldman

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2 Comments:

Blogger Mike1 said...

Nice blog, I think the conservative move will pay off in the long run. Chasing different inflated asset classes is going to burn some...UBS will be avoiding that.

5:13 AM  
Blogger jmf said...

hello mike1,

thanks for the kind words.

on top of this ubs makes close to 50% from their stable asset management (nr1 worldwide).

goldman and others generating most of their earnings from "trading and principal investments"

5:51 AM  

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