As UBS re-hires, is it better to work for core, or non-core?
With UBS riven with factionalism and political infighting, it’s hard to imagine there being much peace around Broadgate.
Until last week, Rajeev Misra and Robert Hoornweg are said to have had distinct factions in the ill-fated FICC business. Now Hoornweg has gone and Misra reigns supreme. However, headhunters say a new rift is emerging: between Orcel and Misra’s core bank and the non-core bank run by Carsten Kengeter. In UBS’s terms these are the ‘legacy’ and ‘non-legacy’ parts of the business.
“It’s a nightmare there,” says one fixed income headhunter. “People who’ve been assigned to non-core are being sidelined by Andrea Orcel’s group – not being invited to meetings, told to leave meetings, that sort of thing. Core bankers are asserting their dominance.”
Reuters reported yesterday that some of the UBS bankers currently on ‘special leave’ are being tapped to come back and work for the core business which is too thinly staffed to function properly.
Another fixed income-focused headhunter confirmed that this is the case. “On the core side of the business they shot 60% of the sales staff and 25% of the traders,” he says, “now they’re pulling some of those people back again.”
1 Finsbury vs. 100 Liverpool Street
Carsten Kengeter’s non-core operation will reportedly be housed at 100 Liverpool Street, while the core business will be run from 1 Finsbury.
Headhunters say many people still haven’t been informed whether they’ll be working for the core or the non-core businesses and that the situation remains fluid.
While Rajeev Misra and his lieutenants such as Guido Cortesani, a former Unicredit and Citigroup banker and Chris Murphy, global head of rates are among the key staff in the core business at UBS, Kengeter’s non-core business is said to include the likes of Afif Baccouche, global head of structured credit trading, and his team.
Ostensibly, Misra’s core business would seem the more appealing of the two: it does - after all, house the operations UBS wants to continue with.
However, this is an over-simplification. UBS’s non-core business has a lot going for it.
In the first place, it’s apparently paying impressive profit-related packages: Kengeter was said at the weekend to have been offered a ‘lucrative’ contract to stay. Headhunters say this has been extended to his senior managers.
In the second place, additional redundancies are expected in the core business, whereas jobs in non-core will be protected as assets are wound down.
And in the third, just because a business is designated core and is being closed, doesn’t imply closure is imminent – it could take years.
"Non-core operations are highly complex businesses that will often retain some of the most talented people,” says Klaus Woeste, head of people and change advisory at KPMG.
“Jobs at a non-core business are likely to be more secure. Where would you rather be working - in a non core business with a defined task for
the next five years, or in a core business where the strategy could change in the next quarter?” Woeste adds, pointing out that pay in non-core businesses is typically tied to particular performance targets, which is appealing when bonuses are falling.
What about the UBS bankers who are unwanted for either core or non-core? One headhunter says the best of UBS's FICC business are being interviewed to death. "Some guys are getting five or six offers," he claims - declining to speak on the record. "Banks that didn't have headcount are suddenly willing to rethink. Literally, every bank has been interested in them."
The head of another fixed income search boutique warns against getting too excited, however: "People are just interviewing these UBS people to gather data," he says. "I'd be surprised if the interviews are going anywhere."