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UBS Capital reports slowdown in Q1 writedowns

UBS Capital, the private equity arm of UBS, has continued to suffer writedowns on its CHF3bn portfolio but the losses slowed in the first quarter of 2003.

UBS has lost just CHF123m so far this year compared with CHF389m in the last quarter of 2002.

‘Prevailing economic conditions will continue to determine our financial performance, with our results expected to remain volatile due to the unpredictability of exit opportunities,' the firm explained to shareholders. ‘However, we see signs that the remaining portfolio is trending towards a performance more in line with overall equity markets.'

UBS trebled the size of its private equity portfolio to CHF5.7bn in less than three years, reaching its height at the end of 2000. Since then it has written down the portfolio by half and is now focusing on ‘managing existing assets in order to maximise value' and capitalising on exit opportunities as they arise.

UBS blamed the almost CHF3bn of losses over two years on poor economic conditions and the limited exit opportunities that have affected the entire private equity industry. But the firm has been encouraged by a number of divestments in the early part of this year that have led to gains of CHF70m.

The firm is currently negotiating the sale of its lawnmower manufacturing business, Global Garden Products, which is valued in the region of E500m.

UBS has continued to make staff cuts, reducing personnel from 73 at the end of 2002 to 54.

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