The Growing Demand for LGBTQ+ Investment Options

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Nearly half of U.S. investors in a recent Morgan Stanley survey want opportunities to invest in LGBTQ+ equity and inclusion, across a broad range of products and strategies.

This demand increases substantially among LGBTQ+ investors (86%), heterosexual investors with an LGBTQ+ household member (76%) and younger investors (67% of Gen Z and 56% of Millennials). However, there are very few investment options today focused purely on LGBTQ+ equity.

For asset managers and wealth managers, exploring these options may have the benefit of helping to improve equity and inclusion for the LGBTQ+ community while meeting investor demand and capturing investible assets from younger investors.

The Market for Investments Advancing LGBTQ+ Equity & Inclusion

Although the LGBTQ+ community in the U.S. is growing, with 26 million people representing 8% of adults overall and 21% of Gen Z adults, individuals still face social and economic disparities. Half of LGBTQ+ workers report that they have experienced workplace discrimination5 and LGBTQ+ founders have raised just 0.5% of venture capital in the U.S.
Investor capital could act as a lever to address such inequities. “Investing with LGBTQ+ objectives describes the effort to direct investment capital toward the advancement of populations historically disadvantaged based on their sexual orientation or gender identity,” says Susan Reid, Morgan Stanley’s Global Head of Talent and Director of the Institute for Inclusion. “The goal is to advance equitable and inclusive opportunities for the LGBTQ+ community, while also delivering market-rate financial returns.”

The business case for LGBTQ+ investment products includes both investors who identify as part of that community as well as younger investors: Investors born after 1980, regardless of their identity, could play a significant role in demand for these products.

A majority of Millennial and Gen Z investors expressed interest in finding investment options that advance LGBTQ+ equity and inclusion. As older generations transfer wealth to their heirs in the coming decades, $73 trillion is predicted to move to investors more interested in investible products and strategies advancing LGBTQ+ equity.

In Morgan Stanley’s analysis, holding all else equal, this generational wealth transfer could drive demand growth by boosting the assets of those interested in LGBTQ+ equity investing by more than 40%.

Meeting the Opportunity

Despite this investor interest, investment options today are limited. Among interested investors, 42% highlighted a lack of LGBTQ+ equity investment opportunities. Nearly a third did not know how to invest in this theme (32%) and lacked research or data on the theme (31%).

This demand creates opportunities for asset managers to differentiate themselves among investors within and beyond the LGBTQ+ community. “Our research suggests that nearly $20 trillion9 is currently held by investors interested in products or strategies that advance LGBTQ+ equity but don’t have viable options to do so,” says Jessica Alsford, Morgan Stanley’s Chief Sustainability Officer and CEO of the Institute for Sustainable Investing. “Any new product or strategy aligned with this theme—from screening approaches to funds that target positive impact—could be well-received by interested investors, giving asset managers the opportunity to potentially differentiate themselves in the market.”

Investors may also consider philanthropic giving to organizations with the primary mission of advancing LGBTQ+ equity, or major programming dedicated to the LGBTQ+ community.

The survey found that demand for philanthropic giving targeting LGBTQ+ equity and inclusion was particularly high among people who identified as heterosexual but have an LGBTQ+ household member (89%), even higher than responses from LGBTQ+ investors (87%).

In addition, to specific investments that advance LGBTQ+ equity, 80% of LGBTQ+ investors and 40% of non-LGBTQ+ investors see this issue as an important factor when selecting a financial advisor or platform. In fact, 80% of LGBTQ+ and 31% of non-LGBTQ+ investors would switch financial advisors or investment platforms based on LGBTQ+ equity and inclusion opportunities.

More disclosure from corporates and reputable data providers will be needed to help scale LGBTQ+ equity investing and close the supply-demand gap for products and strategies targeting this theme. As younger generations more interested in LGBTQ+ equity investing inherit and build more wealth, and as the U.S. LGBTQ+ population increases, asset managers and financial advisors would be wise to examine the opportunities and position themselves for potential market leadership.

To view the full report, click on the following link.

 

Rapid RIAs Growth Drives Private Equity Deal Flow

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The impact of mergers and acquisitions (M&A) in the registered investment advisor (RIA) channels has rippled across the financial advice industry. A fragmented market with a growing service sector and a recurring revenue model, the RIA channels are attracting the attention of private equity (PE) giants that typically dominate sectors like industrials, technology, and healthcare, according to Cerulli’s latest white paper, Private Equity Carves Out Its Place in the RIA Space.

Based on Cerulli’s market estimates, the opportunity for RIA acquisitions grew to $3.7 trillion as of year-end 2021. The “buy to build” model is particularly effective in the RIA space, where the market is highly fragmented and few growth-focused businesses achieve the scale necessary to succeed as an acquirer.

This has built a steady base of RIA firms ripe for consolidation and partially fueled the affiliate growth of RIA acquirers over the last decade.

The key drivers of PE interest in the RIA channels include a perfect storm of market opportunity, fragmentation, and revenue.

According to Cerulli, total assets in RIA channels jumped from $2.3 trillion to $8.2 trillion over the last decade, a 13.2% 10-year compound annual growth rate (CAGR). Combined, the RIA channels now control 27% of asset marketshare, growing by seven percentage points since 2011.

“The rapid expansion of the RIA channels coupled with consistent consolidation has driven private interest in the marketplace to new heights,” says Stephen Caruso, research analyst. “With the opportunity for RIA acquisitions eclipsing $3.7 trillion in AUM across advisor retirements, new breakaway advisors, and growth-challenged RIAs, there is no shortage of potential acquisition targets.”

A reliable revenue model is also driving PE interest. RIAs operate in a fee-based model with sticky client relationships and a predictable stream of recurring revenue. On average, RIAs derive 82% of their revenue from asset-based fees and experience annual average asset inflows per advisor of $6.8 million across six new client relationships. This organic growth, combined with a strong recurring revenue base, presents an attractive opportunity for firms.

Yet, as the number of private equity firms in the RIA market grows, finding white space will be decidedly difficult. “PE firms will need to ensure their growth metrics, timelines, and business strategies mesh with the consolidators they are looking to acquire,” says Caruso. “While operational guidance from experienced investment partners is advantageous, any misalignment of objectives could cause significant friction,” he concludes.

After Tough 2022, Financial Markets Remain Challenged by Multiple Threats

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T. Rowe Price released its outlook for global financial markets for the balance of 2023 and the message is reluctantly bearish for the short term, with more room for optimism over the longer term.

Contributing factors making the near term uncertain include stubborn inflation, despite some recent slowing, tightening financial conditions and higher interest rates, a risk of recessions in many developed markets and reduced lending after the failure of several U.S. regional banks.

The resilience of many world economies is being tested as the effects of a steep U.S. Federal Reserve interest rate hiking cycle and a shift from quantitative easing to quantitative tightening are still being felt.

Labor markets remain strong and are an important signal for investors to watch as any softening could increase the risk of a recession.

As always, company earnings are an important focus. Although equity markets have delivered gains in the first half of 2023, earnings estimates may be too high for a weakening economy, putting further pressure on equity valuations.

Bonds, which suffered badly in 2022 alongside stocks, present potentially attractive opportunities in high yield, bank loans, and sovereign and local currency debt in certain emerging markets.

“The market is trying to reconcile two very different scenarios – one where the U.S. economy remains fairly strong and the Fed doesn’t cut rates, and one where the Fed has to cut by several percentage points.  In Europe, I expect both the European Central Bank and the Bank of England to raise rates despite the associated economic risks.  The Fed and other central banks in developed markets will lower rates eventually, but the timing is tricky.  Rates are likely to remain higher for longer.  Some emerging markets may be on the verge of rate cuts, but they are only attractive on a very selective basis,” said Arif Husain, Head of International Fixed Income and Chief Investment Officer.

In addition, Sébastien Page, Head of Global Multi-Asset and Chief Investment Officer commented: “Whenever the Fed has slammed on the brakes, someone’s head has gone through the windshield.  This time it was some U.S. regional banks.  Stock valuations aren’t broadly attractive right now, but small- and mid-cap stocks are trading at significant discounts to their historical averages, with small-caps priced like it’s 2008.  In an uncertain environment, market dislocations are inevitable.  With both stocks and bonds, skilled active management can help navigate market volatility by taking advantage of opportunities and avoiding riskier exposures. My takeaway fits in a fortune cookie: stay invested, stay diversified.”

 

 

Sandro Pierri, CEO of BNP Paribas Asset Management, Elected New President of EFAMA

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Sandro Pierri, Efama

Sandro Pierri, CEO of BNP Paribas Asset Management, was elected as EFAMA’s President for a two-year term, running until June 2025.

Sandro Pierri has been the CEO of BNP Paribas Asset Management since 2021. He has over 30 years of experience in various leadership roles within the asset management industry, including as former CEO of Pioneer Investments.

Massimo Greco, Vice-Chair Asset Management EMEA at JP Morgan Asset Management, was also elected as EFAMA’s Vice-President. Mr Greco has been Vice-Chair Asset Management EMEA since earlier this year, after heading EMEA Funds for J.P. Morgan Asset Management since 2012. He has 25 years of senior leadership experience at JP Morgan Asset Management and has previously served two terms as an EFAMA Board member.

President of EFAMA, Sandro Pierri, commented: “It is an honor to serve as EFAMA President for the next two years. In a challenging financial environment, regulation has become a key competitive component for our industry while navigating through major strategic transitions such as the retail investment strategy, sustainable finance and tech. I am deeply convinced that EFAMA has an essential role to play, to help build a true European Capital Markets Union to serve our clients and European savers but also finance the net zero transition. Our industry needs clear rules that allow fund and asset management companies to operate efficiently throughout the Union and beyond and I am truly committed to ensure the voice of our industry is heard at European and international levels.”

Pierri takes over from Naïm Abou-Jaoudé, CEO of New York Life Investment Management and EFAMA President since 2021.

Mr. Abou-Jaoudé commented: “I would like to congratulate and wish the best of luck to my successor and friend, Sandro Pierri. I have full confidence that he will lead EFAMA with excellence, ensuring our industry’s continued growth and success. I would also like to welcome EFAMA’s new Vice-President, Massimo Greco, and wish the very best to both of you in your mandate.”

Fidelity International Publishes its Sustainable Investing Report 2023

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Fidelity International released its annual Sustainable Investing Report 2023, entitled Nature Positive. The report details Fidelity’s approach to sustainable investing and the progress made in 2022 in several key areas of the ESG dimension.

“As an asset manager, Fidelity remains committed to climate change mitigation and, through this report, recognizes the weight of nature in achieving emissions neutrality and the power of effective governance in driving systemic change,” the firm said.

Jenn-Hui Tan, Fidelity International’s Global Head of Sustainable Investment and Oversight, commented: “Despite the enormous challenges of geopolitics and inflation that plagued economies in 2022, sustainable investing continues to evolve apace and our focus is shifting as systemic issues, such as nature, become more relevant. As around half of the world’s GDP is heavily or largely dependent on nature, we realize that reversing the loss of nature is vital to ensure the long-term prosperity of the global economy.”

Some of the highlights of the report include updating the Sustainable Investment Principles to reflect the evolving approach to active ownership, and introducing an Influence Framework to identify opportunities for dialogue with stakeholders around issues of systemic importance over several years.

On the other hand, the development of Fidelity’s ESG tools to drive dimension integration. In this regard, with the deployment of climate ratings, the ODS tool and ESG ratings currently cover around 4,000 companies.

In addition, the report highlights that the thermal coal thematic dialogue program was launched, designed to accelerate the phase-out of thermal coal by 2030 in OECD markets and by 2040 globally, in line with the IEA’s 2050 net zero emissions scenario.

Finally, Fidelity highlights the development of a Deforestation Framework that “will help deliver on our commitment to do everything in our power to address the risks of deforestation caused by commodity sourcing in our investment portfolios by 2025 and, on neutrality.”

Home-buying Competition Pushes Prices Higher

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Competition among buyers over few available houses has made this home shopping season unusually hot, according to the latest market report from Zillow®. Meanwhile, high mortgage rates are continuing to deter homeowners from listing, pushing inventory to record lows.

“Many homeowners are still opting not to sell and give up historically low mortgage rates. But those who do have been rewarded with bidding wars as buyers compete for limited options,” said Zillow senior economist Jeff Tucker. “Spring is traditionally the hottest time of year in the housing market, and 2023 has been no exception. Time will tell if seasonal price slowdowns arrive on time this year, later in summer.”

Typical U.S. home values grew by 1.4% from April to May, the strongest monthly appreciation since last June. That’s a few degrees cooler than the previous two springs, but hotter than in 2018 or 2019. The typical home value is $346,856 — up 0.9% over last May and up 3.4% from a recent low in January.

A new loan on a home priced at the typical value in the U.S. would feature monthly mortgage payments just shy of $1,800. That monthly payment is 22% higher than last year, double that of May 2019, and the second highest on record after October 2022.

Regional appreciation trends
Affordability is still the key driver of demand, and that’s reflected in the markets that are appreciating fastest. The largest monthly home value gains are in the Midwest — home to six of the seven metros with the biggest gains in May. Columbus, Ohio, led the way (2.2% monthly gain), followed closely by Cincinnati, Detroit, Richmond and Milwaukee.

Price growth also sprang back in West Coast tech hubs after prices fell significantly there late in 2022. Home values rose faster than the national average for the second straight month in San Jose (1.9%), Seattle (1.7%) and San Francisco (1.4%).

Inventory shortage drags on, driven by high rates
A shortage of new listings has dogged the housing market for almost a year. The flow of new listings was down 23% year over year in May — a milder drop than in April, but nearly equal to that of March.

The chief driver is still higher mortgage rates, which make a new loan unattractive when the majority of mortgaged homes are financed for less than 4%. Even without intentions to buy again, anyone with a mortgage at a rate under 4% might be loath to sell when there’s a possibility to rent out the home for more than their carrying costs.

The lack of new listings, paired with resolute demand from buyers, has driven prices up and total inventory down to record lows for this time of year. The number of homes for sale on Zillow in May was 3.1% lower than last year — the former low-water mark — and a massive 46% below that of May 2019.

Buyers still motivated, despite challenging conditions
Sales measured by newly pending listings climbed 9.5% from April, shrinking the year-over-year decline to 18% in May and marking steady improvement since March. While this looks low in comparison to the hot pandemic era, sales figures are close to pre-pandemic standards.

Pending sales peaked in May in 2018, 2019 and 2022; the weeks ahead will reveal if that seasonal pattern repeats itself, or if the buying season stretches into summer, as it did in 2020 and 2021.

The Zillow Real Estate Market Report is a monthly overview of the national and local real estate markets. For more information, visit the following link.

 

The Market Feels Like it is Waiting for an Inevitable Recession

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Pixabay CC0 Public Domain

U.S. equities were mixed during the month of May. While mega-cap tech stocks benefited from a wave of optimism fueled by advancements in artificial intelligence (AI), the current Federal debt crisis loomed large, dominating the headlines and affecting market sentiment. The first quarter earnings season concluded and while the “better than feared” label can describe the past few earnings seasons quite well, the general increase to 2023 guidance is an encouraging sign for companies overall. After tense negotiations between the White House and Republican House Speaker Kevin McCarthy, the House of Representatives passed legislation to suspend the debt ceiling and set federal spending limits in an effort to avoid a potential economic catastrophe. The bill was sent to the Senate, which finally passed it on June 1st, so the nation’s new debt limit has been extended through January 1, 2025.

On May 3, the Federal Reserve announced another 25bps rate hike at the end of its two-day policy meeting, bringing the targeted federal funds rate to 5.00-5.25%. During his press conference, Fed Chair Jerome Powell noted that inflation has moderated somewhat since the middle of last year and that the process of getting inflation back down to 2% has a long way to go.

Mega-cap tech stocks have been the prime beneficiaries of the recent positive momentum regarding artificial intelligence, with NVIDIA (NVDA), Microsoft (MSFT) and Amazon (AMZN) as the top three contributors to the Russell 1000’s performance for the month of May.

May was a challenging month for merger arbitrage investing as First Horizon (FHN) and Toronto-Dominion Bank (TD) walked away from their deal, and the U.S. FTC sued to block Amgen’s (AMGN) $27 billion acquisition of Horizon Therapeutics (HZNP). Spreads on other deals widened in sympathy, however, we view this as an opportunity to add to positions at wider spreads despite the setbacks. The market has appropriately begun pricing in more concerns around regulatory scrutiny and risk, which has resulted in wider spreads that have negatively impacted performance. New deal activity is creating opportunities for investors to deploy capital in deals where we believe arbitrageurs can be appropriately compensated, and believe that over time will continue to generate absolute returns.

The convertible market was essentially flat in May, as fears of a recession and the US debt ceiling impasse weighed on the market while mixed economic data and company guidance gave some optimistic investors hope. Equity market breadth is quite low with only a few names driving performance. On balance the market feels like it is waiting for an inevitable recession. We recognize the importance that these macro factors have on a convertible portfolio, but believe the market currently offers an opportunity for favourable risk adjusted performance relative to underlying equities in this environment.

The unique opportunity in convertibles currently comes from fixed income equivalent issues that are trading at attractive yields to maturity in excess of our long term expected return. These are often convertibles within a few years of maturity that we expect to accrete to par over that time. While this is not the profile we have focused on historically, we find it to be attractive for the fund in this environment. These convertibles should have limited downside from here and we expect them to outperform equities in a flat, down, or volatile market.

 

 

 

Blackstone Announces Majority Investment in New Tradition

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Blackstone announced that funds managed by Blackstone Tactical Opportunities have acquired a majority stake in New Tradition Media, a leading out-of-home media operator with assets across the nation’s largest markets.

Founded in 2010, New Tradition develops, owns and operates premium digital and static signage for leading national brands and advertising agencies. It manages some of the most iconic, large-format, spectacular out-of-home advertising assets nationwide, including One Times Square in New York City and The Reef in Los Angeles, the press release said.

This partnership with Blackstone, the largest owner of commercial real estate globally, will help fuel New Tradition’s continued growth and meaningfully enhance its network of real estate and advertising relationships. The company’s management team, Evan Richheimer, Bret Richheimer, Vince Mastria and Lu Cerda, will continue to run day-to-day operations of the business and remain significant equity holders after closing.

Evan Richheimer, Co-Founder and CEO of New Tradition said: “We’re thrilled to partner with Blackstone, whose track record of scaling founder-led businesses and significant real estate expertise, will enable New Tradition to accelerate the expansion of our footprint and continue to provide cutting edge out-of-home advertising solutions to new and existing clients.”

John Watson, Managing Director, and Kern Vohra, Senior Associate, at Blackstone, said: “Technological advancements in digital signage are transforming the way consumers engage with the physical advertising industry. Evan, Bret, Vince and Lu are respected leaders in this evolving market and have created iconic advertising activations across the country on behalf of their customers. We’re excited to leverage Blackstone’s scale, resources and relationships to support New Tradition’s continued expansion and innovation.”

Terms of the transaction were not disclosed. Moelis & Company LLC served as a financial advisor to Blackstone, and Weil, Gotshal & Manges LLP served as a legal advisor to Blackstone. Solomon Partners served as a financial advisor to New Tradition, and Lowenstein Sandler LLP served as a legal advisor to New Tradition.

DAMAC International Submits an Application for Planning Approval, Incorporating Zaha Hadid Architects’ Stunning Design

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Photo courtesy

DAMAC International announces it has submitted its application for planning approval to the Town of Surfside, incorporating Zaha Hadid Architects’ (ZHA) stunning design.

This commission marks the second Miami project for the award-winning British architecture and design firm founded by the late, Pritzker-prize winning architect Zaha Hadid.

Zaha Hadid Architects has produced a pair of design variations for a 12-story ultra-luxury boutique oceanfront condominium with 57 residences at 8777 Collins Avenue. The submission takes place less than a year from when the 1.8 acre oceanfront property was purchased in July 2022.

Each project by Zaha Hadid Architects is the very specific assimilation of its unique context, local culture, programmatic requirements and intelligent engineering— enabling the architecture and surrounding urban fabric to seamlessly combine, in both formal strategy and spatial experience.

“We are honored to have been chosen for this very special project. While no work of architecture can ever remove the pain of the past, nor should it, a truly ambitious work of architecture can respect such a significant site,” said Chris Lepine, Director, Zaha Hadid Architects. “It’s a great responsibility to be providing this vision for Surfside.”

As part of the planning application to the Town, DAMAC has elected to submit two variations of a common theme for consideration. The submission is based on alternative interpretations of the town planning ordinances. The first which steps in on the South elevation and the second with consistent elevations on all sides. The intention is to provide the Town with designs that we believe accord to the ordinances and meet the highest design standards possible under each interpretation.

Both designs feature a twin-building duality, with a sculptural form modulated with nested crescents that coalesce at the corners. These soft, cloud-like elements, stretch pull and contract emulating the ebb and flow of the ocean to animate the façade. Balconies stagger, never aligning vertically, to give variety to every floor and so that horizontal movement is emphasized. Balcony extensions, shading elements and geometric curves help to ensure privacy between condominiums and their adjacent spaces with a contemporary reinterpretation of privacy fins, a characteristic detail of Miami Modernism’s (MiMO) patterned screens filtering the strong Miami sun.

Each proposal incorporates precision-engineered façades that echo the colors and textures of sand within the adjacent dunes and beach. The rich materiality of these crafted façades embeds the building within its Surfside community and warmly reflects the magnificent variety of light throughout each sunrise, daytime and sunset on Miami’s internationally renowned coastline.

The designs maximize views and natural light into the condominiums from at least three aspects. The condominiums will flow seamlessly from indoors to outdoors with generous balconies extending the internal living space capitalizing on the Miami weather and ocean breezes. The condominiums, ranging from 4,000-15,000 square feet, will provide a variety of living experiences to the residents. The community amenities will include a 100-foot rooftop pool bridging across the atrium between the north/south arms of the building with direct views of Downtown, as well as a 75-foot indoor exercise pool.

Adjacent to this pool, will be a spa and gym with views to the exterior landscape. The building is set within landscaped grounds enveloped by nature, reflective of its beachfront location and interface with the dunes and ocean.

“We are pleased to submit our planning application, featuring Zaha Hadid Architects’ design variations for the Town’s approval,” said Niall Mc Loughlin, DAMAC International Senior Vice President of Communications. “They have raised their own bar once more with these two design variations, expertly weaving together form and space to engage the senses, and create an unrivalled ultra-luxury experience and a true sense of place.”

“We know we cannot replace what was so painfully lost, but it is our desire that the building honors and respects its location at the heart of Surfside’s community and offers a sense of closure to the tragic event of the past while also providing a sense of a new beginning,” added Mc Loughlin.

UBS Completes Acquisition of Credit Suisse, Creating the World’s 11th-largest Asset Management Company

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Pixabay CC0 Public Domain

UBS has completed the acquisition of Credit Suisse, passing a major milestone. According to a statement released today, the combined entity will operate as a consolidated banking group and will create the 11th largest asset manager in the world and the third largest in Europe.

“We are excited about bringing together our highly complementary businesses and product offerings to scale our capabilities and enhance our client offering. With a combined USD 1.6 trillion in invested assets, we are creating the third largest Europe-based asset manager and the number 11 firm globally,” UBS Asset Management said in a press release.

In the asset management business, the acquisition also creates the number one Europe-based Index player with leading capabilities in customized and sustainability-focused solutions; an expanded Alternatives offering, across real estate, hedge funds and commodities, as well as the leading collateralized loan obligation (CLO) franchise globally; leading active investment capabilities, including a strong thematic equities offering; a continued commitment to sustainability and innovation, with an expanded offering; our increased asset base will provide a more influential ‘seat at the table’ for our stewardship and engagement activities; reinforce our strengths as the asset management leader in Switzerland; and an increased presence in the US and APAC, with an expanded footprint in China including Credit Suisse’s joint venture with ICBC, the firm said.

UBS Asset Management leadership team

UBS will build on UBS Asset Management’s existing target operating model, growth strategy and organizational set-up. Through the course of the next 90 days, they will work swiftly to determine the best options to create most value in the interest of our clients, employees and shareholders, the statement added.

The entity has now shaped the organizational structure of its business and announced the management team appointed for the Asset Management business, which will report to Suni Harford. Michael J. Rongetti will be CEO at Credit Suisse Asset Management; Barry Gill, Investment Director; Joe Azelby, Real Estate & Private Markets (REPM) Director; Aleksandar Ivanovic, Head of Client Coverage and EMEA & Suiza Head; Michael Kehl, Product Director; Nasreen Kasenally, Operations Director; James Poucher, América Regional Director and Raymond Yin, APAC & China Onshore Regional Director.

In the beginning, the UBS and Credit Suisse businesses will be required to run as separate affiliates. For its Asset Management clients, however, “we understand the importance of moving swiftly to provide clarity on how your assets are managed while we work to bring together our teams, capabilities and product offering,” the firm said.

As previously announced, UBS will operate the following governance model pending further integration: UBS Group AG will manage two separate parent banks – UBS AG and Credit Suisse AG. Each institution  will continue to have its own subsidiaries and branches, serve its clients and deal with counterparties. The Board of Directors and Group Executive Board of UBS Group AG will hold overall responsibility for the  consolidated group. 

As it completes the acquisition, UBS announces Board of Director nominations for certain Credit Suisse  entities. Subject to regulatory approval, the Credit Suisse AG Board will consist of Lukas Gähwiler (Chair), Jeremy Anderson (Vice-Chair), Christian Gellerstad (Vice-Chair), Michelle Bereaux, Mirko Bianchi (until 30 June  2023), Clare Brady, Mark Hughes, Amanda Norton and Stefan Seiler.  

Colm Kelleher, UBS Group AG Chairman, said: “I‘m pleased that we’ve successfully closed this crucial  transaction in less than three months, bringing together two global systemically important banks for the first  time. We are now one Swiss global firm and, together, we are stronger. As we start to operate the  consolidated banking group, we’ll continue to be guided by the best interests of all our stakeholders,  including investors. Our top priority remains the same: to serve our clients with excellence.” 

Sergio P. Ermotti, CEO of UBS Group AG, added: “Today we welcome our new colleagues from Credit Suisse  to UBS. Instead of competing, we’ll now unite as we embark on the next chapter of our joint journey.  Together, we’ll present our clients an enhanced global offering, broader geographic reach and access to even  greater expertise. We’ll create a bank that our clients, employees, investors and Switzerland can be proud of.”

UBS expects its CET1 capital ratio to be around 14% in the second quarter of 2023 and to remain around  that level throughout 2023. It anticipates that Credit Suisse’s operating losses and significant restructuring  charges will be offset by reductions in RWA. 

In the future, UBS will report consolidated financial results for the combined group under IFRS in USD. The  second-quarter 2023 earnings will be communicated on 31 August 2023.