Credit Suisse

Integration is a complex task given the breadth of the firms' franchises and plans to build out a new investment technology platform. Bringing the two groups together absorbs a lot of attention and will likely keep the firm very busy for some years to come. However, we draw comfort from UBS Asset Management being on more solid footing following a strategic transformation that started more than 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, but it has been elevated in the former Credit Suisse AM ranks following the acquisition. UBS AM 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. This will be put to the test as the firm consolidates its product shelf with that of Credit Suisse AM. While the acquisition brings some complementary capabilities in the thematic equities, commodities, high yield, and leveraged loan space, which UBS AM was lacking, there is also substantial overlap elsewhere that the firm aims to reduce. Liquidations and mergers will need to be carefully managed to safeguard the interests of affected fund shareholders. Despite the consolidation, the combined firm will continue to offer a wide range of active and passive products across traditional and alternative asset classes. The quality of the fund range is solid, though helped by a large share of passive products, which accounted for more than 46% of combined assets as of the end of 2023, while the active offering is of mixed quality. 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. Overall, UBS AM retains its Average Parent rating as we monitor investors' experience with the firm throughout the integration process.