UBS Said to Face O’Connor Hedge-Fund Defections on Bonus
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UBS O’Connor LLC, the $6 billion hedge-fund unit within the biggest Swiss bank, risks upheaval as senior traders seek to defect after a clampdown on cash bonuses, two people with direct knowledge of the situation said.
Traders are contacting other hedge funds and recruiters after UBS AG moved them to a pay structure used throughout the firm, said the people, who requested anonymity because their plans to leave aren’t public. That resulted in immediate cash bonuses falling by 50 percent to 1 million Swiss francs ($1.06 million), and some deferred pay being tied to five-year UBS bonds rather than reinvested in O’Connor funds, the people said.