However, we draw some comfort from UBS Asset Management being on a more solid footing following a strategic transformation that started roughly 10 years ago. This restructuring came with elevated turnover both at the senior leadership level and within the investment divisions. Stability has returned in recent years, and the firm is aiming to more closely align its product offering with strategic initiatives such as sustainable investing, private markets and alternatives, custom indexing, and Asian markets. That said, the firm still offers a wide range of active and passive products across traditional and alternative asset classes, and a certain level of product churn remains. The quality of the fund range is solid, though helped by a large share of passive products, which account for more than 40% of assets, while the active offering is less distinctive. Portfolio managers' bonuses are linked to funds' performance of up to three years, which does n't stand out and could be improved by considering longer time periods. UBS AM retains its Average Parent rating as we await more visibility on the combined firms' integration pathway.
The acquisition of Credit Suisse by UBS Group announced in March 2023 will add a lot of scale to its asset-management business and fill gaps in its product lineup, but integration will be a complex task given the breadth of the firms' franchises and substantial overlaps.