UBS Warburg is reorganizing its fixed-income research unit to leave no doubts that it is not connected to its investment banking activities. Robert Wolf, global head of fixed-income, says the firm wants to be pro-active in light of the current regulatory environment. He stresses that the changes to the fixed-income activities are not part of the settlement that UBS Warburg reached with regulators along with 11 other investment banks. Other firms are said to be contemplating similar moves, particularly Citigroup, Goldman Sachs and Merrill Lynch, but UBS Warburg is believed to be the first to do so. Officials at the other firms either declined to comment or did not return calls.
UBS Warburg will move some of its analysts to the origination group where they will work with the firm's investment bankers to focus on the new issue process. These analysts will perform much the same functions as investment bankers--including due diligence on issuers, meeting with finance officials at the company, developing a view of the risk inherent in a deal and working with the investment bank's distribution arm to help investors understand it. They will have no contact with investors after an issue has come to market. A separate publishing, "client-facing" research group will be "totally independent" of origination and will report into distribution on a regional basis, Wolf says. Those analysts will publish research and recommend securities to investors.
Rosemary Sisson, currently a retail sector analyst, will become global chief administrative officer for research, reporting to Steve Chronert, current head of high-yield sales who adds U.S. credit reseach to his brief. Philip Olesen and Bill Hoffman high-grade and high-yield analysts, respectively, will become publishing research heads. Similar moves will be made in Europe and Asia.
Headcount in credit research will be reduced globally by 25%, or over 20 people, but Wolf says cost cutting was "absolutely not," a reason for the changes.
Steve Ruggiero and Helen Clement, former global co-heads of fixed-income research, resigned after being offered new positions at the firm, Wolf says. He declined to say what the positions were, and Ruggiero and Clement could not be reached.
