UBS AG has realigned its asset management division to focus its wholesaling efforts on the intermediary market banks, financial planners, financial planning broker-dealers, insurance companies, and Web sites.
In the realignment, which was done last week, Mitchell Hutchins Asset Management, which had been the investment management subsidiary of PaineWebber Inc., was combined with a portion of UBS Brinson Partners unit, renamed Brinson Advisors Inc., and brought under the supervision of UBS Asset Management.
UBS closed its purchase of Paine Webber Group Inc. in November.
The mandate of Brinson Advisors will extend beyond Mitchell Hutchins business, which was proprietary money management for mutual funds, separate accounts, commingled accounts, and variable annuity funds managed by PaineWebber, said Brian M. Storms, the realigned units president and chief executive officer.
Brinson Advisors third-party distribution business is UBS first in the United States. The Swiss banking company previously did not offer its funds or fund management services in the retail market, Mr. Storms said.
Benjamin F. Lenhardt Jr., president and chief executive officer of UBS Asset Management, said Mitchell Hutchins was brought from PaineWebber into his unit to let Brinson Partners focus on institutional business, such as managing pools of government and corporate pension money.
Brinson Advisors will focus solely on the wholesale channel, Mr. Lenhardt said. It will offer investment products such as mutual funds, both stand-alone and as part of variable annuities and 401(k) plans, and managed alternative investment products to independent broker-dealers and those affiliated with banks and insurance companies. It will also offer money management capabilities to financial planners.
Rather than build a wholesale business from the ground up, we have been able to make this complementary realignment, Mr. Lenhardt said. This allows our existing institutional business to remain focused, while this new team targets wholesale channels.
Mr. Storms said this is a good opportunity for Brinson Advisors. Mitchell Hutchins had only a small presence in the wholesale market, and the realignment lets it focus on selling products to high-net-worth investors through intermediaries.
Brinson Advisors has $74 billion of assets under management. UBS Asset Management has $320 billion of assets under management. Mr. Lenhardt said there is no plan to integrate the two investment platforms.
Burton Greenwald, a Phila-delphia financial services analyst, said the consolidation should help UBS maintain its recent momentum. The fact that the companys profits from investment services grew 134% last year is even more impressive when it is noted that PaineWebbers influence is only factored in for the final two months, he said.
UBS has made some important strategic decisions over the past year, Mr. Greenwald said. By combining these groups, Brinson and Mitchell Hutchins can concentrate their efforts.
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