UBS
UBS clinches the award for best equity house in the world for the second year in a row, fending off tough competition from Goldman Sachs, Citigroup and Morgan Stanley.
UBS, Goldman, and Citi have all placed in the top five of league tables in the US, Europe and Asia for equity capital markets but it is UBS?s strength in institutional trading, sales, and research across the globe as well as in equity-linked origination that really tip the scales in its favour. Neither Goldman Sachs nor Citigroup managed to place in the top five for equity-linked in Europe or Asia, where UBS ranked third, although they placed second and fourth in the US, where UBS managed only seventh.
Morgan Stanley, a strong competitor in the US and Asia for ECM and equity-linked, and one of the strongest trading houses globally, failed to place within the top five of ECM bookrunners in Europe over the past year.
UBS has also been bookrunner on some of the most high profile ECM deals over the past year, including the $4.5 billion accelerated bookbuild for Royal Bank of Scotland, the second-largest one-day offering ever, and the Belgacom IPO, the largest in Europe since 2001. In the US, the bank led the $930 million Apollo Investment Corp IPO, the second largest so far in 2004 and a complex combined follow-on, hybrid convertible, subordinated debt and credit facility for Omnicare that totalled $1.5 billion. In Asia UBS led a $2.4 billion follow-on for West Japan Railway Company, the largest Japanese government sale since 2002, and a simultaneous A$1.2 billion (US$840 million) rights issue and A$1.2 billion share placement for AMP, the largest ever in Australian corporate history.
When it comes to research, UBS is the clear leader globally. In the latest Institutional Investor polls, UBS ranks as the top house in Europe, Asia and Latin America as well as placing second in Japan and fifth in the US. No other house?s equity research even comes close to achieving consistency at that level globally.
The pattern is very similar in sales and trading, where UBS is rated number one in Europe, Asia, Latin America and number two in Japan for trading and sixth for sales. UBS?s relative weak spot has historically been the US, where it has yet to fully replicate its European and Asian successes. But UBS is making real progress in the US. ?Although we don?t enjoy the same market share in the US as we do in Europe, our ECM revenues from the US are now greater than from anywhere else,? says James Garvin, global co-head of ECM at UBS. ?Growing a US equity capital markets business has given us the third leg of the stool.? The bank is hiring aggressively in the US.
UBS?s overall sales and trading market share still trails its leading US rivals but it has succeeded in carving out some niches.
The bank is one of the top programme trading houses, jostling with Deutsche Bank for the number two spot behind Morgan Stanley. It is well ahead of bigger US players such as Goldman Sachs, CSFB, Lehman, Merrill Lynch and Citigroup.
The growing proportion of trading volumes from hedge funds and their increasing importance as investors in new issues, especially convertibles, means that the ability to service this client segment is becoming a key skill. Although Morgan Stanley and Goldman Sachs are still the clear leaders in the field, along with Bear Stearns in the US, UBS has been one of the most successful new entrants.
Its poaching in March 2003 of Alex Erlich, Goldman?s former head of European prime brokerage sales, and its purchase of ABN Amro?s US prime brokerage business in September 2003, have helped UBS to become the fourth-largest prime broker in the US by assets, according to Tass research, albeit a distant fourth. In Europe, too, UBS?s recent share of new wins has been strong.
