n an effort to expand its domestic and international private banking business, UBS AG
, said Tuesday, it will buy Global Asset Management
for as much as $675 million, boosting its private banking business by adding more than 150,000 wealthy clients.
GAM, a 16-year-old Bermuda-based firm with $13.8 billion in assets under management, specializes in serving clients worth over $5 million.
About 35% of GAM's assets are handled by outside managers and the remainder is run in-house for institutional clients and mutual fund investors.The group is known for hiring outside managers such as George Soros
, Mario Gabelli
and Fayez Sarofim
to handle their money.
"This deal is a cornerstone of the strategic plan of the UBS Private Banking Division, and it will be central in developing our full range of wealth management services worldwide," said Rudi Bogni
, CEO of the Private Banking Division at UBS. "It is also instrumental in responding to changing global trends in asset management for high net-worth individuals."
UBS is Europe's second-largest bank. Under the deal it could pay as much as 4.8% of assets under management to purchase GAM. In similar deals Merrill Lynch & Co.
paid 3% of assets for Mercury Asset Management
, and Prudential Corp.
paid 10% for M&G Group
Gilbert de Botton
, GAM chairman, will remain with the firm. Denis Mirlesse
, currently head of integration for the Private Banking Division of UBS, will become CEO of the GAM business area, UBS said.
More acquisitions could be on the way. UBS has put aside some $6.5 billion to make private banking acquisitions.
GAM will continue to operate under its own brand name as a
dedicated business area within UBS's Private Banking Division.
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