UBS chairman Kasper Villiger today launched the Swiss bank's new UBS Wealth Management Investment House at its branch in Tel Aviv. The unit will offer clients domestic and international investment management under a single roof.
Villiger said, "We understand that growth will come from Asia and emerging markets, because growth in Europe is limited. Creating wealth is difficult, and we hope that the continent will stabilize." He stressed the importance of China, Hong Kong, Brazil, Russia, and Israel as future growth engines for UBS AG (NYSE; SWX: UBS).
At the press conference, UBS Wealth Management Israel CEO Kobi Faigenbaum said, "It turns out that customers want their banker nearby, regardless of technological developments. UBS, which identified Israel as an important market, decided to deepen its operations in Israel. What is happening here is that a bank of our size is to bring shekel portfolio management, and we have our own concept of money management. We don’t manage mutual funds, and we're completely free to pick our investments."
Asked why UBS didn’t acquire an existing business, UBS Israel & Africa head Patrick Müller replied, "It is always a question whether you want to grow organically or through acquisitions. The reason we didn’t acquire a company is that there is no company or investment house in the market that suited the concept that we want to bring to Israel. We don’t rule it out, but it's not on the agenda at this time."
Asked why UBS does not what an Israeli banking license, Villiger said, "We're a full bank in Switzerland, but we cannot be everything everywhere. Israel is a very important place, and we want to bring our expertise here."
Asked about the timing of UBS's entry into Israel, given its struggling economy and the social protest, Faigenbaum said that the social protest was justified and that it should expand to issues such as management fees at Israeli mutual funds, which are far higher than their foreign counterparts.
UBS chose Israel as a strategic market following an in-depth study, which found that Israel is one of the three leading countries of six growth markets in terms of personal wealth growth. The study ranked Israel alongside Brazil and Russia, and ahead of Mexico, Turkey, and one of the major Gulf countries in terms of market attractiveness. These factors include the growth of personal wealth, the growth of new wealth, rapid GDP growth, the entrepreneurial and innovation characteristics of the market, the developed regulation of the capital market, the existence of policy that encourages the entry of foreign investment players, and most importantly, the absence of sufficiently comprehensive wealth management services for the wealthy individuals.
Faigenbaum said, "The Israeli public possesses more wealth than Mexico or the Gulf countries. In fact, the scope of the wealth is similar to that of Brazil or Russia. Accordingly, Israel was highlighted as a central target for UBS for the coming years and we embarked on establishing the innovative structure we are launching today. From a small representation office, UBS Wealth Management Israel was transformed into an investment house with large, professional team and exclusive offering of shekel and international investment on a global level, accompanied by financial planning in Hebrew."
He added, "In making this huge investment in Israel, UBS is acting on a vision of becoming one of Israel's most prominent wealth management investment houses with a few years' time."
UBS became a member of the TASE in 1997, a year after opening an office Israel, making it the oldest foreign TASE member. It provide wealth management, underwriting, merger and acquisitions, and bond market money maker services.
Published by Globes [online], Israel business news - www.globes-online.com - on February 21, 2012
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