SWITZERLAND - Officials at UBS expect to see positive flows into its asset management unit next year, the Swiss bank said as it discussed an overhaul of the company's strategy aimed at bringing the firm back into positive territory.
The unit saw total outflows of CHF62.4bn (US$61.4bn) in the last four quarters. In the third quarter outflows totaled CHF17.1bn.
UBS GAM chairman and chief executive John Fraser said GAM expected net new money to be positive starting in 2010 and anticipated that the proportion of its business from third parties would increase in the medium term.
Fraser also said "monetizing improved investment performance across asset classes" was a key element of his division's strategy.
He added: "Third-party institutional and wholesale distribution will be expanded; cooperation with UBS's wealth management business increased and UBS's existing strong positions in emerging markets - in particular, China, Korea and the Middle East - leveraged, to help the division meet its medium-term objectives."
The firm will target a profit before tax of CHF1.3bn for UBS GAM over the next three to five years. Figures presented at UBS's 2009 investor day in Zurich also show UBS GAM targets an operating income of CHF3bn and a cost-to-income ratio of 50-60% for the medium term.
The asset management unit will contribute to an overall medium term goal of CHF15bn of annual profit before tax, a cost-to-income ratio of 65-70% and a return-on-equity of 15-20%.
UBS group chief executive officer Oswald Grübel said: "The transformation we are undertaking is a fundamental one and it will not happen quickly. I am determined, however, that we build a firm for sustainable profit and not one to focus only on short-term expectations."
Separately, UBS group chief financial officer John Cryan warned of a potentially restrictive dividend policy in the future.
He said: "We expect to satisfy additional capital requirements through retained earnings. Our dividend policy over the next few years will depend not only upon our level of earnings but also upon what additional capital requirements are adopted."
The Pension Protection Fund (PPF) has published contingency planning guidance for trustees to help them manage risk.
The trustees of the Autoenrolment.co.uk and Moore Stephens master trusts have been fined for "deficient" chair's statements after failed court action against The Pensions Regulator (TPR).
Henry Tapper shares his thoughts on how IGCs could provide value for money statements that people wanted to read