UBS Scales Back China Private Funds Business, Announces Layoffs
According to Reuters, Swiss bank UBS is reducing its presence in China's private funds market, shutting down a significant portion of its existing funds and laying off staff. The move comes amid cost pressures, fierce competition, and sluggish returns in the Chinese market.
- Fund Closures and Staff Reductions: Up to 17 of UBS's 19 private equity and bond funds launched since 2016 will be closed, with investors receiving their money back. This decision will also lead to layoffs of around one-third of the 50-person team at UBS Asset Management Shanghai.
- Shift in Focus: UBS plans to shift its focus away from directly managing private funds in China. Instead, they will concentrate on alternative investment approaches like "funds of funds" and expand their private fund investments in overseas markets.
- Challenges for Foreign Asset Managers: This news reflects the broader difficulties faced by foreign asset management companies in China. These challenges include cost pressures, strong competition from local firms, and lackluster returns from Chinese markets. Other Western asset managers like Fidelity International and Legal & General have also downsized their China operations recently.
- UBS Maintains Commitment to China: Despite these cutbacks, UBS emphasizes its long-term commitment to China. A spokesperson stated that China remains a "key market" and they will continue to invest strategically, although they did not comment on the specific fund closures or layoffs.
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Date of record
19 April 2024
