UBS is considering moving its proprietary stock trading business to UBS Global Asset Management, its money management division, CFO Tom Naratil said Tuesday.
UBS would seed the unit, then seek outside investors, Mr. Naratil said to Bloomberg News.
“We do plan to exit that business at the investment bank,” Mr. Naratil said. “However, we do think that the strategies that the proprietary equity team pursues would actually be attractive to asset management clients.”
The bank has to close its proprietary trading operations in the U.S. because of the so-called Volcker rule, while elsewhere it doesn’t fit with UBS’ strategy even though it’s a “very good profitable business for us,” Mr. Naratil said.
“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,” Mr. Naratil said. “And over time, we won’t have our money involved.”
The unit would be placed within the existing alternative and quantitative business of the money management division, Mr. Naratil said.
Separately, UBS Global Asset Management on Tuesday reported 574 billion Swiss francs ($623 billion) in client assets under management as of Dec. 31, up 9.5% from three months prior and up 2.7% from a year ago.
About half of the increase in assets came from the acquisition of ING Investment Management’s Australia business. The terms of that deal require UBS to sell about half of the acquired business, which is expected in the first quarter of 2012.
Total net new inflows was very small, about 200 million francs; however, UBS recorded 3 billion francs in net inflows in the fourth quarter to infrastructure and private equity, and net outflows of 2.2 billion from traditional asset classes. UBS saw total net outflows of 2.6 billion francs in the previous quarter.
Total net inflows of 4.3 billion francs for 2011 was up from 1.8 billion francs for the previous year.
Operating income rose 49.4% to 118 million francs in the fourth quarter, which was a 20.4% drop from 148 million francs a year ago. Operating income for the year was 428 million francs, down 17.1% from 2010.
Drew Carter contributed to this story.