UBS 2.0

In the latest change to the secondaries advisory landscape, UBS is staffing back up – and interestingly taking a cue from some of the market’s smaller brokers. 

There’s been a lot of market chatter about what’s going on over at UBS during the past year or so, as the bank’s secondaries advisory group – which for years has been regarded as one of the market’s top advisory practices – has suffered a series of high-profile departures.

It started to experience senior turnover when veteran Nigel Dawn, who helped form its secondaries advisory group, retired in July 2013. The bank then promoted New York-based Philip Tsai to co-head the advisory practice alongside Nicolas Lanel, who moved to London to head European activities. But soon after, Dawn re-emerged at rival placement and advisory firm Evercore, which simultaneously poached Lanel so the duo could kick-start its private capital advisory business. UBS then tapped London-based Rodney Reid to lead its European activities, but this summer it emerged that he, too, would be jumping ship to join Evercore.

UBS, meanwhile, has been quietly going about business as usual and, talking to Tsai, you’re certainly not given the impression of a sinking ship – but of one that may be seeking some new horizons.

In addition to actively recruiting at present to grow its 16-person team with a senior hire in Europe and a number of junior-level professionals in New York, UBS is adding a new pillar to its advisory practice: a ‘relationship brokerage business’.

That confirms the rumours that have been circulating about the bank setting up a new trading desk approach for some deals, similar to the tactic used by some smaller advisory groups like Tullett Prebon as well as some of the online platforms offered by groups like NYPPEX and Second Market.

Tsai (unsurprisingly) waved away references to other advisors, saying the added strategy was akin to a match-making service that will pair sellers of between one and five fund stakes with buyers. UBS will then reap introduction fees.

“We find there are a lot of opportunistic sellers in the market trying to take advantage of an attractive pricing environment and are looking for more of a ‘matchmaking service’, if you will, where they have a price in mind and don’t need a full process run.”

In evolving its offerings, Tsai stressed UBS was not taking a “throw everything against the wall and see what sticks approach”, but was instead leveraging its relationships to consummate trades.

As the secondaries market continues to grow, new advisors seem to keep popping up while competition between established advisors of all sizes intensifies. It’ll be interesting to see which groups – and which advisory style – end up leading the pack.