Our private client had interests in various industries, including a substantial stake in a listed blue-chip company. Now he needed to raise funds for a new venture, but preferred not to sell down any of his existing holdings.
The answer came from our Corporate Advisory Group (CAG). Using the client’s shares in the blue-chip company as collateral, the team structured a USD 30 million equity-linked note that was then sold through our own distribution network.
The transaction generated benefits for all parties: the client raised capital without selling assets. Investors gained access to a product with an attractive yield, while we received a substantial flow of assets into our wealth management business.
CAG has specialized in corporate finance solutions for private company owners since 2002. As one would expect, the majority of the unit's 40 professionals come from an investment banking background. Yet it would be a mistake to regard CAG as a "mini-investment bank" within the Wealth Management business.
For CAG, corporate finance solutions are not an end in themselves. Rather, they form part of a holistic approach to wealth management. Together with client advisors, the CAG team takes into account the client's entire needs, both private and corporate, when advising on corporate finance solutions.
Typically, a client approaches CAG for assistance with a succession problem at a family-owned firm. If appropriate, the group can find buyers for all or part of such a company, then structure and execute the transaction.
But the transaction is only a first step. A team of specialists from different areas of Wealth Management ensures that the transaction is structured efficiently, the proceeds of any sale effectively invested and estate-planning issues settled in line with the client's objectives.
To this end, CAG works closely with client-facing and product units across the firm. Within Europe, CAG focuses mainly on the five core countries of the European wealth management business. Accordingly, the unit is represented in Frankfurt, Milan, Paris, Madrid and London, as well as in Switzerland. In January 2004, Euromoney named UBS as "Best in Western Europe" for corporate advisory services in the magazine's first annual survey of the global private banking industry.
Outside Europe, Swiss-based offices cater for clients with offshore assets, and additional CAG representatives in Latin America and Singapore are developing business within their regions.
CAG specializes in the type of transactions that might occur once in the lifetime of a typical entrepreneur, typically the sale or restructuring of a family-owned business. For larger deals or capital market transactions, it can call on the execution capabilities of the Investment Bank.
CAG is a relatively young business unit, but the market potential is considerable. As the post-war generation of entrepreneurs reaches retirement age, succession issues are looming in the family business sector across Europe. With the resources of the entire firm behind it, CAG is ideally placed to provide the right solutions.
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