Union Bank of Switzerland is readying a series of initiatives aimed at quadrupling its U.S. private banking assets over the next three to five years, top executives said.
Next month, the Zurich-based banking company will launch a mutual fund family for investors with at least $1 million of assets. The move would open the company's doors to a new slice of wealthy clients: UBS currently limits its private account services to those with at least $3 million.
Also in April, UBS will unveil a print advertising campaign in publications ranging from Barron's to Cigar Aficianado.
And to help drum up new clients across the country, the bank has already hired six new business development executives over the past two months. The executives, recruited from such companies as Chase Manhattan Corp., Merrill Lynch & Co., and J.P. Morgan & Co., boost UBS' cadre of officers in the U.S. to 75.
Company officials are betting that these steps will help UBS to stand apart from the cluttered pack of U.S. and foreign private banks.
Right now, no single competitor has more than a 3.5% market share of affluent customers, said Peter E. "Tony" Guernsey Jr., a managing director who heads UBS' U.S. private banking operation. By hiring private bankers with existing accounts, Mr. Guernsey expects to be able to add new clients faster than this competitors.
An industry observer said he was impressed by UBS' strategy. "It's one of the first times I've seen somebody aggressively coming forward," said David Ross Palmer, a private banking consultant. "People have been doing a lot of talking, but they've been standing around collecting dust while brokers take their business."
UBS executives would not disclose details of the U.S. private banking operation's business volume or assets under management. But Hanspeter Lochmeier, senior managing director for UBS' investment services in North America, said the mutual funds - dubbed the UBS Private Investors Funds - should of particular help in the company's drive to quadruple assets.
He said that the bank decided to launch the mutual fund family to help meet clients' needs for more diversity in their international holdings.
"Individually managing accounts is not the ideal way to go," Mr. Lochmeier said. "That led to a restriction in the sizes of new accounts."
For instance, he explained, a client with $3 million at the private bank who wanted to allocate 10% to international investments could buy into only a few foreign companies - because their share prices tend to be higher than those of U.S. companies.
The client "would have $300,000 in international equities, and there's no way you can diversify that risk appropriately with individual securities," Mr. Lochmeier said.