Presentation to Warwick School

Transcription

1 Presentation to Warwick School December 2012

2 Pradeep Kachhala Client Advisor Years of investment industry experience: 9 I left Warwick School in 1999 and worked for a year in an internet bank called "cahoot" before going to University. I attended City University London's CASS Business school and obtained a degree in Economics (BSc 2.1) and a Masters in Wealth Management from the Chartered Institute for Securities and Investments. After leaving University I began his career with State Street Global Advisors before joining Heptagon Capital. In 2006 I joined UBS Wealth Management initially working on bespoke portfolio analysis for Ultra High Net Worth clients. In 2011 I joined the charities desk as a client advisor. I am also a Trustee and Honorary Treasurer of a charity called the Boxing Academy. 1

3 About UBS Wealth Management at the core UBS is one of the world s leading financial firms We are present in all major financial centers and employ more than 62,000 people in over 50 countries The history of UBS begins in Switzerland in 1862 As an integrated bank operating on a global and regional basis, we combine the wealth management core business with investment banking and asset management for your benefit UBS Wealth Management focuses on delivering comprehensive financial services to individuals around the world with bankable assets above one million Swiss francs (or equivalent in other currencies). We provide clients in over 40 countries, including Switzerland, with financial advice, products and tools to fit their individual needs. UBS holds a leading position in Switzerland. UBS Wealth Management Americas provides advice-based relationships through financial advisors who deliver a fully integrated set of products and services specifically designed to address the needs of high and ultra high net worth individuals and families. We include the former Wealth Management US business unit as well as the domestic Canadian business and international business booked in the United States. UBS Global Asset Management is a large-scale asset manager with businesses diversified across regions, capabilities and distribution channels. We offer investment capabilities and styles across all major traditional and alternative asset classes including equities, fixed income, currency, hedge fund, real estate and infrastructure, which can also be combined in multi-asset strategies. UBS Investment Bank provides securities and other financial products and research in equities, fixed income, rates, foreign exchange and precious metals. We also provide advisory services and access to the world's capital markets for corporate and institutional clients, governments, financial intermediaries and alternative asset managers and private investors. 2

4 Benefit from 150 years of banking tradition When the Bank in Winterthur was founded in 1862, no one would have thought that one of the major global financial institutions would have emerged from it 150 years later In our anniversary year, we want to thank our clients, our staff and the general public for the support they have given us throughout our history The Founders era Swiss banks become "engines" of credit and industrial ven-ture capital. The Bank in Winterthur opens as the first antecedent of UBS First steps towards international expansion by a Swiss bank Swiss Bank Corporation opens a branch in London Union Bank of Switzerland launches the first automated cash dispenser in Continental Europe 1995 Creation of UBS through the merger of the Union Bank of Switzerland and the Swiss Bank Corporation, becoming the world's premier private bank 1998 Swiss Bank Corporation acquires S.G. Warburg, a leading European investment bank 2009 UBS's Basel II capital ratio is one of the highest in the industry and we will build on this strength and our stable funding and sound liquidity positions 2012 Following the financial crisis, UBS returns to profitability and has recorded consistent profitability ever since 3

5 UBS Wealth Management around the world We became international very early on, with our first branches in London in 1898 and in New York in 1939 Wherever you are in the world, we are close to you Since 2010, we have opened new offices in Saudi-Arabia and Peru, and extended our presence in Uruguay, Brazil, and Russia 100+ Wealth Management Offices in Switzerland 70+ Wealth Management Offices worldwide UBS AG Representative Offices Notes: 1 Incl. branches and Advisory Offices (an Advisory Office is a UBS onshore entity that services clients whose assets are booked in a UBS booking centre located in a different jurisdiction), Wealth Management Offices in the US are not shown on this map. For illustrative purposes only 4

6 UBS Wealth Management in the UK An established presence in the UK since 1999 Around 850 employees 1 More than 200 Client Advisors 1 Serving over 15,000 clients across the UK Over 85 Investment Products and Service professionals 1, including wealth planning specialists focused on delivering UK tax-effective solutions* Dedicated teams to support clients with specific needs including family offices, charities, intermediaries, professionals and executives One of the Top 5 UK wealth managers by invested assets 2 Recognised as one of the best private banks in the UK and top for High Net Worth ($1m to $30m) and Family Office services 3 Awarded Best Global Wealth Manager 4. A network of regional offices to ensure fast and reliable access to our specialists Birmingham Edinburgh Newcastle Leeds Manchester 1 As at All figures rounded. 2 Source: PAM Insight Ltd Source: Euromoney Private Banking Survey Source: Euromoney Awards for Excellence 2012 Source: UBS Wealth Management * UBS does not provide tax advice Figures will be updated on the next publication of UBS's quarterly results (30 October 2012 for 3Q 2012) Jersey (St. Helier) London 5

7 UBS charity clients 1.2 billion managed for c. 300 UK-based charities. GBP millions Portfolio size 169 UBS is ranked as the 2 nd largest fund manager to grant makers and 8 th to fundraisers < 1m 1m 5m 5m 10m 10m 20m > 20m Source: UBS 6

8 Value added services Banking Lombard lending Financial modeling Investment Yield enhancement bespoke structured products Private equity impact investing ESG research Trustee training Professor Paul Palmer Investment symposium designed for charities 'Charity Compendium' 7

9 Working in the city of London Finance is a generic term, how many of the following industries do you know? Investment Banking Private Banking Investment Management Hedge Funds Private Equity Accountancy Management Consultancy However a great number of these industries may overlap, have sub industries or be available at one firm Internships are competitive, but well worth applying for, before and during University. Research an area you are interested in does it sound interesting? Does it fit your skill set? A relevant degree helps but isn't vital. Current hiring levels low and tough but this may change in 3 years! Recruitment can be volatile in certain industries. Try investing yourself? 8

10 Key financial market driver overview Global economic momentum is improving albeit at a very moderate pace. Overall, we expect the moderate improvement in global economic activity to continue ahead. The US housing recovery continues supporting growth and in emerging market China and Brazil growth has started to pick up again. The US economy stays on a moderate growth path and the unemployment rate has come down gradually. The US elections confirmed the current political power constellation, although Democrats gained some momentum. We do not expect a full fiscal cliff, but some modest fiscal tightening. The Eurozone economy seems to have troughed in the summer although growth in the fourth quarter will be temporarily weakened. We believe that Spain will apply for a program by early 2013 at the latest with Italy likely following in the first half of We expect the Chinese economy to continue to stabilize in the coming months as recent data has been positive on balance. China's new leaders to maintain the existing proactive fiscal and slightly expansive monetary policies. We upgrade our GDP growth as this is slightly supportive. Please see important disclaimer and disclosures at the end of the document. Source: UBS CIO WM Global Investment Office as of

11 Economic Outlook US election results a fiscal cliff-hanger Barack Obama re-elected, Democrats retain control of the Senate, Republicans retain control of the House of Representatives US political system remains in gridlock as neither party has a clear majority in either house Fig 1: National congressional results 2012 Gridlock means the fiscal 'cliff' looms large: 1 st January 2013 $600 billion spending cuts & tax increases, equivalent to c. 3.5% of US GDP Would send US back into recession (2012 estimate GDP 2.1%) and increase unemployment to 9% according to Congressional Budget Office Would most certainly send global economy into recession (< 2% real GDP growth) UBS Investment Bank estimate 30% downside risk for global equities UBS believes the US politicians will reach a compromise to avert a fiscal adjustment of such magnitude Source: BBC, BlackRock & UBS Investment Bank 10

12 Economic Outlook Global Economic Outlook Real GDP growth in % Inflation in % F 2013F F 2013F Americas US Canada Brazil Asia/ Pacific Japan Australia China India Europe Eurozone Germany France Italy Spain UK Switzerland Russia World

13 Pick-up in consumer sentiment should support US growth Consumer sentiment and retail sales Source: Thomson Reuters, UBS CIO WM Global Investment Office as of

14 as Chinese inflation remains muted Chinese consumer price inflation (y/y) Source: Thomson Reuters, UBS CIO WM Global Investment Office as of

15 Equity markets: PEs low compared to their 10y-average Price-to-earnings (P/E) ratio for MSCI indices based on realized earnings Australia Canada EM EMU Japan Switzerland UK US World P/E ratio based on realized earnings 10-year average of P/E ratio Note: For Japan periods with negative earnings (2002/03 and 2009/10) excluded Source: Thomson Reuters, UBS CIO WM Global Investment Office as of

16 Disclaimer This document is issued by UBS Wealth Management, a division of UBS AG which is authorised and regulated by the Financial Services Authority. It has been prepared solely for information purposes and is based upon opinions which reflect our current views but which may be liable to change, and upon sources believed to be reliable. This publication is for your information only and is not intended as an offer, or a solicitation of an offer, to buy or sell any investment or other specific product. Although all information and opinions expressed in this document were obtained from sources believed to be reliable and in good faith, no representation or warranty, express or implied, is made as to its accuracy or completeness. All information and opinions as well as any prices indicated are subject to change without notice and the asset classes, the asset allocation and the investment instruments are only indicative. In accordance with FSA requirements, we should point out that with regard to any investments mentioned, values may fall as well as rise and that exchange rates may have a similar effect. It should be noted that past performance is not an indication of future returns. At any time UBS AG ("UBS") and other companies in the UBS group (or employees thereof) may have a long or short position, or deal as principal or agent, in relevant securities or provide advisory or other services to the issuer of relevant securities or to a company connected with an issuer. Some investments may not be readily realisable since the market in the securities is illiquid and therefore valuing the investment and identifying the risk to which you are exposed may be difficult to quantify. Futures and options trading as well as alternative investments are considered risky. Some investments may be subject to sudden and large falls in value and on realisation you may receive back less than you invested or may be required to pay more. Changes in FX rates may have an adverse effect on the price, value or income of an investment. Furthermore, performance information may be based on simulations and/or be for illustration only. We would recommend that you take financial and/or legal advice as to the implications of investing in any of the products mentioned herein, including tax matters. UBS does not provide tax advice. This document may not be reproduced or copies circulated without prior authority of UBS. This document is not intended for distribution into the US and / or to US persons or in jurisdictions where its distribution by us would be restricted. Where services are provided from outside the UK, they will not be covered by the UK Regulatory Regime or Investor Compensation Scheme. Alternative investment funds are unregulated collective investment schemes under the UK regulations. As such, they have their own specific risks. They may only be proposed to private clients for which they are suitable. UBS AG 1 Finsbury Avenue London EC2M 2AN Tel: Fax: