UBS shuts some China private funds

HONG KONG: UBS is shuting down some of its China private funds business and will lay off one-third of the staff as the Swiss bank cuts operating costs in the country, said three sources with direct knowledge of the mater.

UBS will shut up to 17 of its equity and bond private funds and return the money to the investors, out of 19 funds launched since the private fund management unit started in 2016, said two of the three sources. In China, private funds are equivalent to hedge funds and private equity funds, serving high net worth and institutional investors.

As a result, the fund management unit, UBS Asset Management Shanghai, will soon start laying off around one-third of its team of 50, the two sources said, joining other global asset managers that have cut headcount in China in recent months.

The firm plans to focus on alternative strategies such as funds of funds and is moving to expand private funds investing into overseas markets, all three of the sources said.

The sources declined to be named as they were not authorised to speak to the media.

“China remains a key market for UBS, and we will continue to invest strategically,” a UBS spokesperson said in an email statement to Reuters, without commenting on the fund closures or the layoffs.

The scaling back underscores how foreign asset managers are struggling to grow in China, faced with cost-cuting pressure, intense competition from local peers in the private fund space and sluggish returns from Chinese markets.