UBS is weighing the sale of a segment within its asset management division primarily centered on real estate investments, according to two sources familiar with the situation. The bank is looking to restructure its smallest business unit.
The segment in question primarily consists of Swiss real estate assets and could be valued at less than $1 billion, as per one of the insiders who chose to remain anonymous due to the confidentiality of the matter.
Under the leadership of UBS veteran Aleksandar Ivanovic, a restructuring of the asset management business in June led to the transfer of some real estate assets to a new unit that combines asset management and wealth products. Real estate investments not included in this new unit are being evaluated for potential sale, the source added.
This year, prospective buyers have engaged UBS bankers, including Joseph Azelby, the global head of real assets, in discussions regarding a possible deal, according to the source.
A UBS spokesperson highlighted the bank's significant growth aspirations for its asset management division and emphasized its commitment to enhancing its unique and scalable real asset capabilities, particularly its renowned Swiss Real Estate business.
The potential divestiture represents UBS's latest move to streamline operations following its acquisition of Credit Suisse in 2023. Filings show that UBS's asset management business has expanded to $1.7 trillion post the Credit Suisse acquisition, up from $1.1 trillion in 2022.
In February, CFO Todd Tuckner indicated to analysts a consideration of "exits of non-strategic businesses" to bolster the profitability of the asset management unit, without offering further details.
Following the government-orchestrated acquisition of Credit Suisse, UBS has been integrating its rival's businesses while divesting of unwanted assets. Last year, it sold Credit Suisse's securitized products Group to Apollo Global Management.
A UBS presentation earlier this year disclosed that approximately 8% of the $1.7 trillion under the asset management unit is allocated to real estate and private markets.
Swiss real estate investments have outperformed global real estate assets, thanks to favorable interest rates.
While asset management undergoes restructuring, wealth management continues to be UBS's flagship business, contributing over half of its total revenue.