Andrea Orcel’s move to UBS could end in tears

David Hellier
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THE decision by UBS to hire star investment banker Andrea Orcel is pure box office. Orcel, one of the highest paid bankers of all time (known by some as the George Clooney of banking for his looks), is a big recruit.

His impending arrival at UBS marks a statement of intent from the giant Swiss bank. It may have slipped down the league tables – the latest Dealogic first quarter figures out yesterday show UBS in 12th position in global mergers & acquisitions compared to ninth last year – and it may have suffered reputationally from the rogue trader scandal, but some interpret this appointment as saying in capital letters that it still means business in investment banking.

Cynics are not so sure. They say that Orcel, whose clients include Santander and UniCredit (but not many more, they say), is a deal junkie first and foremost who is inevitably unsuited to managing an investment banking team as he must do as co-head of the US investment bank.

They say his hire owes much to his friendship with UBS chief executive Sergio Ermotti, whom he has known for years, and that although he was at Merrill Lynch for 20 years he would have moved much sooner if the right offer had come along.

They query how he will get on with some of the remaining leading lights at UBS such as Simon Warshaw and also question how long his working relationship with Carsten Kengeter (with whom he will be co-head of investment banking) will last.

One banker said yesterday: “I suppose this shows that the UBS investment bank still has a pulse. But strategically it would have been much smarter for the bank to have acquired something like Moelis.”

Moelis is the boutique set up by the former star of UBS, Ken Moelis, that has done so well in the US and Asia where UBS could do with being stronger than it is.

Like a marquee signing in the world of professional sport (think Cristiano Ronaldo when he moved from Manchester United to Real Madrid), the Orcel arrival at UBS will be hotly awaited, but it is far from clear what the outcome will be.

Sources close to the bank were yesterday downplaying its impact, aside from saying that the bank had hired a terrific banker who would add to an already established team. “This is business as usual. I don’t know what the storm is about.” Others are only too happy to predict that there will be a storm and it won’t necessarily be an easily navigable one.

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