UBS Mulls Shift For Proprietary Trading

Feb 7 2012 | 11:50am ET

As banks race to close or spin-off their proprietary trading operations, UBS is looking for a way to hold on to its unit.

The Swiss bank may move its prop. desks into its asset management unit, where it could manage client money as a sort of internal hedge fund, Bloomberg News reports. CFO Tom Naratil called the prop. trading operation a "very good profitable business," adding, "if we're successful in getting this into global asset management, we think there's a great way to show that we can use a proprietary trading strategy in a way that benefits clients."

And, as required by the U.S. Volcker rule, "over time, we won't have our money involved," Naratil said.

"We do plan to exit that business at the investment bank."

About 50 people would be moved to asset management if UBS chooses to go ahead with the plan. If it does not, many of them would likely follow their prop.-trading counterparts at other banks and join—or found—hedge funds.

UBS shuttered its last internal hedge fund, Dillon Read Capital Management, in 2007.


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