Posted March 13, 2018 03:10:30As the market for home equity loans continues to be buoyed by an uptick in interest rates, some of the world’s biggest investment banks are getting in on the action, with the latest addition of UBS AG becoming the latest to launch a new asset class in recent weeks.
UBS has agreed to purchase BNP Paribas AG’s $1.9 billion stake in Fidelity Investments for $2.2 billion, the Wall Street Journal reported Friday, citing people familiar with the matter.
The deal would bring the investment bank’s investment banking division to the asset management firm, which operates on a roughly equal footing to Fidelity’s.
Boris Stavrovsky, chief executive of UB Group, the Swiss bank’s portfolio company, said he and his team have been discussing the move with the Fidelity team, according to the Journal.
Fidelity declined to comment.
Stavrovksy said he had no reason to think the bank would change its focus from the home equity market to other asset classes, but that the investment banking arm of UBM is a natural fit for Fidelity.
UB shares rose 1.5 percent on Friday, while Fidelity jumped 1.4 percent.
“We are focused on investing in the asset classes we understand best and most effectively, and we are confident in UBS’s ability to continue our strong momentum in the market,” said Stavrosky, adding that the bank has invested in some of its best-known assets, including Goldman Sachs Group Inc. The investment bank also has a stake in hedge funds.
In addition to UBS, the New York-based investment bank is in talks to acquire the reinsurance business of UBC Bank, the Journal reported.
UBC, which has a market value of about $3.3 billion, has about $1 billion in cash.
Its investment banking and investment-banking businesses are the largest in the world.UBS was founded in 1889 and is one of the oldest investment banks in the U.S. and Europe.
The bank is known for its low-cost investment products and for its aggressive pursuit of high-quality products.
Fulfillment companies have contributed to the bank’s profit growth in recent years.