A deep-pocketed investment bank takes dead aim at a top spot in the U.S. corporate finance league tables. It makes a big acquisition or hires a cadre of expensive banking stars to generate the deal flow that will take it to the promised land.
By David Schutt
June 2001
Institutional Investor Magazine
Sound like the opening to a familiar Wall Street tale? So is the next chapter: Brash incoming bankers collide with corporate veterans, once-robust markets fade, and rivals respond more vigorously than expected. In the end, management, pestered by nervous shareholders, begins to rethink its strategy.
Deutsche Bank, J.P. Morgan and Smith Barney Shearson, among others, all spent untold millions and failed to break into the exclusive U.S. bulge bracket. The newest protagonist is UBS, the Swiss giant currently attempting to buy its way into the top tier of banks. If it succeeds in the U.S. as it has elsewhere, UBS will secure its position as one of the world’s premier financial powers. But UBS has yet to confront the problems that doomed other firms’ efforts. “UBS is fighting the weight of history in its quest,” says Staff Writer Jenny Anderson, who profiles the firm in this issue (“Taking on America”). Can UBS beat the odds? We’ll have to wait for the final chapter.
An international foray of a different sort is taking place in Seoul, South Korea. There the nation’s largest public pension fund, the very conservative National Pension Corp., is preparing to select its first foreign fund managers to handle overseas investments. As journalist Donald Kirk relates in “Seoul Searching” the choice is important to both South Korea and the fund candidates. Like many countries, South Korea faces a near-term threat to its pension solvency, partly the result of more than a decade of low returns from domestic stock and bond investments. If global funds can help improve those returns, South Korean pensioners can look forward to a more secure retirement. In turn, solid performance by the foreign firms may open other fund management doors in the Hermit Kingdom. Another story with an unwritten ending.
