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Cantor to buy O'Connor from UBS; no financial details

disclosed

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Deal will boost Cantor's alternative assets capabilities

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UBS continues streamlining business after Credit Suisse

takeover

May 28 (Reuters) - U.S. brokerage firm Cantor Fitzgerald

has agreed to buy UBS' hedge fund unit, it was

announced on Wednesday, expanding Cantor's offering in

alternative assets at a time of heightened investor interest in

such products.

For the Swiss lender, the divestment of O'Connor continues

the process of UBS streamlining its operations since the merger

with Credit Suisse in 2023.

O'Connor's investments include alternative assets such as hedge

funds, private credit and commodities. The platform will add $11

billion in invested assets to Cantor's asset management unit,

per separate statements from Cantor and UBS.

"The acquisition of O'Connor is transformational for our asset

management business and demonstrates our commitment to investing

in attractive growth businesses," said Brandon Lutnick, chairman

of Cantor, and son of former boss and current U.S. Secretary of

Commerce Howard Lutnick.

The terms of the deal were not disclosed, and a Cantor

spokesperson declined to comment when asked for further details.

UBS said in its statement that the bank expects to recognize an

immaterial gain from the sale.

Following the transaction's close, forecast to happen in

the fourth quarter, UBS Asset Management and Cantor will

establish a long-term commercial arrangement, which will include

allowing O'Connor's products to continue to be offered to UBS'

wealth management clients, the pair said.

Alternative investment products, such as private credit,

have grown substantially in recent years, as investors have

sought greater returns and to diversify their portfolios. In

turn, financial firms have sought to gain or supplement their

existing product ranges, leading to significant dealmaking

involving alternatives platforms.

Having spent the last two years integrating Credit Suisse's

business, UBS is awaiting details of the Swiss government's plan

to make the banking sector safer, and avert the kind of forced

takeover necessary for Credit Suisse after multiple scandals.

The regulator's plan, due early next month, is expected to

include a call for UBS to hold more capital, something UBS

executives have

said

will make it harder to compete against foreign rivals.