UBS Group (UBS.US) sells its hedge fund division, O'Connor Financial Services company Cantor Fitzgerald to take over $11 billion in assets

The Zhitong Finance App learned that UBS Group (UBS.US) announced on Wednesday that it will sell its hedge fund, private credit and commodities business O'Connor (O'Connor) to financial services company Cantor Fitzgerald.

New York-based Cantor Fitzgerald said the deal would “significantly enhance” the company's asset management business, adding $11 billion in assets under management. The deal is expected to close in the fourth quarter, pending regulatory approval and delivery conditions.

Terms of the deal were not disclosed. UBS said the sale will bring non-material benefits. The divestment is part of UBS's streamlining of operations after acquiring Credit Suisse in 2023. The bank also faces more stringent capital requirements from Switzerland.

“When deciding to sell O'Connor, we considered a number of factors, including its strategic fit and development potential within UBS, and guided by maximizing investor interests,” said Alexander Ivanovich, president of UBS Asset Management. “We preferred acquirers with complementary capabilities, cultural fit, and excellent management teams.”

The deal brought O'Connor back under the jurisdiction of Bill Ferry, a former UBS veteran who was a founding member of O'Connor's business and is currently the global head of Cantor Fitzgerald's asset management.

Ferri said, “With our knowledge and experience of O'Connor, we are uniquely positioned to grow this business, focusing on attracting and retaining investment talent, investing in a flexible and unrestricted operating platform, and providing attractive risk-adjusted returns and first-class customer service. ”

The acquirer said that after the transaction is completed, O'Connor's investment and support team will be merged into Cantor Fitzgerald to operate as an independent alternative investment business within its asset management division. According to the agreement, O'Connor's services will continue to be open to UBS global wealth management clients, and the two asset managers will establish “long-term commercial cooperation”.

“The acquisition of O'Connor was transformative for our asset management business and demonstrated our commitment to investing in high-growth businesses,” Cantor Fitzgerald Chairman Brandon Lutnick said in a statement. “With the management team's deep understanding of O'Connor, we are capable of driving the next phase of growth on a solid foundation.”

In April of this year, Cantor Fitzgerald announced that its investment banking division Cantor would acquire Canaccord Genuity Group's US wholesale market-making business. The company is now mostly owned by the children of former Chairman and CEO Howard Lutnick. Previously, Lutnick transferred his shares after becoming the US Secretary of Commerce.