ZURICH, Switzerland (AP) – Swiss banking giant UBS will buy the U.S. Prime Brokerage unit of ABN Amro Holding NV of the Netherlands for $250 million, the companies said Thursday.
The unit employs 190 people in New York City, San Francisco, Dallas and Boston. It has around 300 hedge fund clients.
The deal is expected to close in the fourth quarter, the companies said.
UBS said the unit is an excellent fit for UBS’s own business because it focuses more on smaller U.S. hedge funds, which court wealthy investors.
“This transaction presents an opportunity to accelerate our Hedge Fund Services business strategy by building relationships with clients at an early stage of their growth,” said John Costas, chairman and CEO of UBS Investment Bank.
In an interview Thursday with the magazine Cash, UBS president Peter Wuffli said the bank wanted to become a larger player in U.S. investment banking. But he ruled out big acquisitions and said most of the gains should be from organic growth.
Prime Brokerage provides securities lending, clearing, funding, custody and trade execution to hedge fund managers and other professional money managers in the United States.
Hugh Scott-Barrett, a member of the ABN Amro managing board, said, “This decision has been taken as part of our strategy to focus increased resources on a more limited range of core activities” for wholesale clients.
In Swiss trading, UBS shares finished 1.1 percent lower at 76.60 Swiss francs ($57.16).
