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Derivatives Specialist Di Stasi Enriches UBS’s Bottom Line

Head of equity capital markets for Europe, the Middle East and Africa at UBS, Salvatore (Chicco) di Stasi's skill in corporate equity derivatives is increasingly important for Basel- and Zurich-based UBS, which is refocusing its business on wealth management and investment banking.

When Salvatore (Chicco) di Stasi visits family in his native Italy, he feels like an outsider. “My grandparents and mother and father were all doctors, and they expected me to be one too,” says UBS’s Zurich-based head of equity capital markets for Europe, the Middle East and Africa. “I decided to follow a different path because I wanted to be the master of my own future.”

In that adventurous spirit, di Stasi captains a 50-foot sailboat that he keeps on the Italian island of Elba. And as a banker the derivatives expert has always charted his own course. Di Stasi, 44, joined UBS from Goldman Sachs Group in 2010 as global head of corporate equity derivatives. He’s arguably the power behind the throne at the Basel- and Zurich-based bank. In addition to his ECM duties, di Stasi helms the global strategic equity solutions (SES) division, a secretive unit that he created from scratch.

Corporate equity derivatives don’t grab headlines like M&A, but they can be more lucrative, and in a sluggish market for mergers and IPOs, that makes them increasingly important to UBS. Under group CEO Sergio Ermotti, the Swiss giant is closing much of its fixed-income operation in response to tougher trading rules, shedding 10,000 jobs as it refocuses on wealth management and investment banking.

SES is one of the biggest moneymakers in UBS’s corporate client solutions business, which houses ECM and M&A advisory. Di Stasi’s team provides hedging for mergers and other transactions. For example, if a corporate client wants to sell an equity stake in a block trade, SES might arrange a put option to give buyers downside protection and let the seller unload the shares at a premium. Last year UBS placed sixth in Dealogic’s EMEA book runner rankings for ECM, with 50 deals worth a total of $8.4 billion, up two places and 23.5 percent, by volume, from 2011.

Soon after di Stasi set up SES in 2010, UBS was lead lender on a $1.5 billion equity-backed financing for Moscow-based Lukoil, Russia’s No. 2 oil company. It was the first of many landmark margin loan deals. SES helped Thai billionaire Dhanin Chearavanont assemble $7.4 billion in cash for his Charoen Pokphand Group’s recent $9.4 billion purchase of a 15.6 percent stake in Ping An Insurance Group Co. of China from London-based HSBC Holdings, according to news agency Reuters. The bank, which will confirm only that it advised CP Group, reportedly contributed financing that included a $5.5 billion loan and will earn some $100 million in fees.

Born near Salerno in southern Italy, di Stasi grew up in Vietri sul Mare, a village on the Amalfi Coast. After earning an economics degree from Bocconi University in Milan, he started his career in that city by joining derivatives pioneer J.P. Morgan & Co. in 1993 as a bond trader; later he traded equity derivatives. Di Stasi soon left the trading floor to establish a team that structured derivatives for corporate clients. William Winters, JPMorgan Chase & Co.’s former co-head of investment banking, was an early supporter. “Chicco has always been a straight shooter who balances excellently the interests of his clients and his firm,” says Winters, who now runs alternative asset manager Renshaw Bay, in London.

In 2004, di Stasi joined Goldman as a London-based partner in the bank’s EMEA financing practice, where he set up a group to advise and finance sovereign wealth funds. Six years later he moved to UBS, which many then considered to be home to Europe’s leading equity franchise. “I loved the idea of starting something new at UBS, which did not have a corporate equity derivatives division,” says the father of two.

Hired by former investment banking head Carsten Kengeter, who worked with him at Goldman, di Stasi has built strong relationships with UBS chief Ermotti and Kengeter’s successor, Andrea Orcel, since moving from London to Switzerland in 2011. Last June he made himself even more useful by creating the institutional solutions group, which offers derivatives products to wealth management clients. He predicts another strong year for equity derivatives. “We expect nontraditional products to continue to form the bulk of future strategies, followed by products such as blocks, IPOs and convertibles,” di Stasi says. “But even here our clients will want more value added and smarter solutions.” • •

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