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March 20, 2023

How Does the Takeover of Credit Suisse by UBS Impact the European Asset Management Industry?

by Detlef Glow.

On March 19, 2023, UBS agreed to buy troubled rival Swiss bank Credit Suisse in a merger which was engineered by Swiss authorities to safeguard the financial markets and to calm down the turmoil in the global banking sector.

Assuming that a merger of the two largest Swiss banks will lead to a merger of their fund and ETF management branches raises the question about the impact such a merger would have on the fund management landscape. Therefore, is a topic of interest to see how the merger of the fund and ETF arms of the two banks will impact the assets under management of the “new UBS.”

After the merger, the “new UBS” will hold $811.0 bn in assets under management globally in mutual funds and ETFs overall. Therefore the “new” UBS will be the ninth largest promoter of mutual funds and ETFs globally, up from fifteenth place.

Since Europe is the home market of the two Swiss banks, it is clear that the merger has a large impact on the European fund industry landscape as the “new” UBS will become the second largest promoter (€597.3 bn) of mutual funds and ETFs in Europe behind BlackRock. This means that the “new UBS” will be the largest European fund promoter, as the assets under management of the new company will be well above of those of Amundi (€526.4 bn).

For the European ETF industry this merger will bring the “new” UBS ETF (€89.0 bn) up to fourth place, pushing Vanguard (€85.1 bn) down to fifth place. This means that the concentration in the European ETF industry will increase even further.

As a side note, it is noteworthy that the difference in assets under management between number four and number three (Xtrackers – €42.0 bn) is roughly on the same level as the difference between number three and number two (Amundi ETF – €43.0 bn). This may mean that the competition for the largest three ETF promoters in Europe may heat up further, as the new UBS may become ambitious to become Europe’s third largest ETF promoter.

Since the UBS already announced that it sees a huge potential for cost savings after the merger, one can expect that the new UBS will merge a number of funds and ETFs from Credit Suisse into existing UBS products to save administrative costs and to unlock economies of scale for the acquiring funds.

All data as of February 28, 2023

Source for all data: Refinitiv Lipper



This material is provided as market commentary and for educational purposes only and does not constitute investment research or advice. Refinitiv cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided in this publication or from any other source mentioned. Please consult with a qualified professional for financial advice.

This article is for information purposes only and does not constitute any investment advice.

The views expressed are the views of the author, not necessarily those of Refinitiv Lipper or LSEG.

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