02/29/2012

Nexar Chief Is Big Winner in Deal With UBP

Arie Assayag, head of fund-of-funds shop Nexar Capital, will take over Union Bancaire Privee’s $12 billion alternative-investment business once UBP closes on its acquisition of Nexar.

After months of negotiations, the Swiss private bank last week signed a letter of intent to buy Paris-based Nexar, a 3-year-old firm that has quickly grown to $3 billion under management via acquisitions. The transaction isn’t expected to close for at least 90 days, pending approval by European regulators.

The deal will install Assayag atop one of the world’s largest fund-of-funds operations, albeit one that has shrunk dramatically in the wake of the financial crisis and the Bernard Madoff scandal. Assayag will leapfrog a number of senior UBP executives, including asset-management chief Richard Wohanka, whose duties will now be limited to long-only investments. Another Nexar executive, chief investment officer Eric Attias, also is expected to assume a senior role at UBP.

Indeed, Nexar’s management team is acting as if it’s buying UBP, rather than the other way around, said a person familiar with the deal. “[Nexar’s] senior people are going to be running [UBP’s] alternatives business,” he said. “It will be an integrated business, and it will be tilted toward the Nexar group having more control.”

For its part, UBP sees the Nexar acquisition as an opportunity to halt years of turmoil, during which its fund-of-funds assets have plummeted from a peak of $60 billion before the financial crisis. UBP was among the biggest victims of the Madoff fraud, funneling some $700 million of client money to the Ponzi scheme. Earlier attempts by UBP to restructure its business have failed to stem the tide of investor redemptions.

Wohanka, formerly the chief executive of Fortis Investment, joined UBP in 2009 with a mandate to combine the ailing hedge fund unit with the bank’s long-only business. But he apparently has missed asset-raising goals. Around the same time, UBP recruited former Fortress Investment managing director Sara Sprung to fill the role of chief investment officer, only to see her depart a year later.

In addition to Wohanka, two other senior UBP executives will now report to Assayag: Laurent Reiss, the long-time head of nondiscretionary hedge fund investing, and Larry Morgenthal, head of commingled funds and customized portfolios. Morgenthal joined UBP in 2010 from Ivy Asset Management, the former fund-of-funds unit of BNY Mellon.

Assayag was head of hedge fund investments at Societe Generale before he and two other SocGen executives, Bernard Kalfon and Attias, founded Nexar in 2009 with backing from private equity firm Aquiline Capital. Aquiline has agreed to sell all of its interest in Nexar to UBP.

In 2010, Nexar acquired Allianz’s alternative-investment business. Last year, it bought London-based fund-of-funds manager Ermitage.

Back Print