UBS Group AG’s investment bank was dealt a fresh blow as Andrea Orcel, the top rainmaker at a business that has lost much of its clout in a shift toward wealth management, left for Spain’s Banco Santander SA.
The Swiss bank promoted two executives to head the investment bank, splitting the role of president held by Orcel, it said late on Tuesday.
Piero Novelli, executive chairman of corporate client solutions, is now to focus on advising clients on capital raisings, as well as mergers and acquisitions, while Robert Karofsky, global head of equities, is to oversee trading.
Orcel, who at one point was seen as a potential candidate to replace Sergio Ermotti as chief executive officer of the Swiss lender, is leaving after six years in a surprise move to become chief executive officer of Santander, a bank known for its retail business.
In splitting his role, Ermotti is putting two relatively unknown bankers in charge of a securities unit that is contributing a shrinking share of revenue under a so-called capital-light model.
“Having two people with lower profiles is perhaps what they wanted,” said Peter Hahn, a professor at the London Institute of Banking & Finance. “When they brought Orcel in, there was a keen effort to show that they were committed to investment banking, they needed to prove that. Today they feel comfortable appointing two guys who are already there.”
Orcel was leading a business that faced shrinking resources, as both the unit’s assets and the share of revenue reserved for staff compensation dropped over the past five years.
The firm has failed to crack the top 10 globally this year in fees from advising on mergers and acquisitions, data compiled by Bloomberg showed. It was the No. 7 adviser in 2007.
Orcel has worked to make his division lean and profitable, rather than focusing on building scale. At the same time, smaller rivals like Evercore Inc, which have paid more for bankers, surpassed UBS on so-called league tables.
Top dealmakers from the US investment-banking division were informed of Orcel’s departure in a conference call at about 11am New York time on Tuesday, just before the move was announced, people familiar with the matter said.
Orcel was widely seen to have wanted to chief executive officer position at a large financial firm, the people said.
“Life is a series of hellos and goodbyes, but still this moment is bittersweet,” Orcel wrote in a memo to employees. “I wouldn’t have left for anything less than a client I have been advising and working with my whole career.”
Like Orcel and Ermotti, Novelli is a former Merrill Lynch employee. He joined UBS in 2004, overseeing global mergers and acquisitions, and returned in 2013 after a stint at Nomura Holdings Inc.
Karofsky has helped expand equities and prime brokerage at UBS since joining in 2014 and previously worked at AllianceBernstein, Morgan Stanley and Deutsche Bank AG. In 2010, he left the German lender after being accused of having an affair with a colleague’s wife, the New York Post reported at the time.
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