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Rebuilding a Franchise

Jim Renwick is determined to restore UBS to the top tier of European equity issuers.

Jim Renwick has had plenty of firsthand experience with distressed situations. His investment banking career nearly ended in its infancy in 1989, when Citicorp, to stanch heavy losses, shuttered the equities business of its British brokerage subsidiary, Scrimgeour Vickers Securities, and laid off Renwick, then a trainee.

More recently, he spent a year trying to revive troubled U.K. small-cap brokerage firm Bridgewell Group, first as head of capital markets, then as CEO, before selling it in May 2007 at the knockdown price of £60.3 million (then worth $119.4 million) to Iceland’s Landsbanki. That bank was taken over by the government in October after the collapse of Iceland’s banking sector.

Now Renwick, 48, faces another daunting challenge: restoring the investment banking fortunes of UBS, the once-mighty Swiss bank that has been devastated by massive U.S. subprime losses.

The son of an Australian Treasury department economist and a teacher of deaf children, Renwick has spent the better part of his career at UBS. After leaving Scrimgeour he took a job in the equity capital markets division at SG Warburg — he won over the division’s boss, Rory Tapner, now the chief executive of UBS Asia Pacific, by saying he had been turned down by Warburg’s merchant bankers, jokingly blaming that fact on his having worn ill-chosen argyle socks. He initially worked on many of the British government’s water and energy privatizations. UBS bought Warburg in 1995 and two years later made Renwick head of U.K. capital markets. He was promoted to head of European equity capital markets three years later and in 2004 was named chairman of corporate broking, a post in which he offered capital markets advice to such chieftains as Sir Christopher Gent, former CEO of mobile phone giant Vodafone; Henri de Castries, chief executive of Europe’s second-largest insurer, AXA; and Stephen Hester, former CEO of British Land who, since November, has held the chief executive post at Royal Bank of Scotland. Renwick pushed UBS toward the top of the league tables; the bank ranked second among European equity book runners in 2006, handling 74 deals worth $22.3 billion, trailing JP Morgan, which handled deals worth $22.7 billion, according to London-based data provider Dealogic.

Renwick jumped to Bridgewell in March 2006, then returned to UBS in January 2008 as vice chairman of investment banking. UBS’s franchise has been tarnished over the past 18 months by $46 billion in credit write-downs and the forced resignations of its chairman, CEO and head of investment banking. The bank slumped to eighth place as a European equity book runner, doing 26 deals, worth $9.1 billion, in 2008, according to Dealogic.

Renwick is confident, though, that the bank has touched bottom. In October, UBS offloaded $60 billion of illiquid assets to a fund set up by the Swiss National Bank and received a Sf6 billion ($5.3 billion) capital injection from the government. “We were lacking firepower before that deal, but now we have a balance sheet reduced both in size and risk, and we are set up to come into 2009 with a top-tier equity capital markets operation as strong as anyone’s,” he asserts.

Renwick has a reputation for proffering the kind of advice CEOs don’t always like to hear. “Renwick was an advocate of the need for a massive capital raising at RBS early in the year, when management still wanted to avoid that,” notes a rival banker. “When it became clear that Renwick was right, he got the mandate.” UBS didn’t get league table credit for the £15 billion ($22 billion) November rights issue because it ended up being underwritten by the U.K. government.

“We are positioning UBS to win mandates in sectors like finance, autos, defense, infrastructure, power and utilities, where national interest in preserving industries is strong,” says Renwick. “The crisis is not about to end, but there should be a huge amount of work for us in capital markets in 2009.”