Banks are changing. Many of them, like UBS, are focusing on wealth management. In the case of UBS the Global Wealth Management division increased 21% year-on-year according to the banks’ first quarter 2025 results. To keep strong capital positions and prepare for the future, banks are divesting in some areas. This week Cantor Fitzgerald was the latest firm to take advantage by agreeing to buy UBS Hedge Fund Unit O’Connor.
You will know about Cantor Fitzgerald due to its ties to Commerce Secretary Howard Lutnick which we wrote about in May.
Bloomberg reported today that the Cantor and UBS deal includes O’Connor’s six investment strategies with about $11 billion in AUM.
Going forward, Cantor and UBS plan to establish a long-term commercial arrangement. In a press release from yesterday, the ‘pioneering’ financial institution, Cantor, stated how it had entered into a definitive agreement to acquire UBS’s O’Connor alternative investment platform. This would include hedge funds, private credit and commodities with approximately $11 billion in invested assets.
“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 Fitzgerald. “With our leadership team’s deep familiarity with O’Connor, we are well-positioned to build upon the business’s strong foundation and drive its next phase of growth.”
“Our priority has been to select a buyer with complementary capabilities, culture and leadership team,” said Aleksandar Ivanovic, President UBS Asset Management. “We believe that Cantor Fitzgerald is strongly placed to take the O’Connor business forward.”
The $11 billion acquisition significantly boosts Cantor Fitzgerald’s asset management portfolio, potentially doubling its alternative investment AUM and positioning it as a top-tier player in the hedge fund space. For investors in O’Connor’s funds, the transition could bring new opportunities. These include access to Cantor’s global distribution network. But there are also risks to consider, including potential shifts in strategy or management focus. The long-term commercial arrangement between Cantor and UBS aims to ensure continuity, but market watchers will be keen to see how Cantor integrates this $11 billion platform into its broader business.
Why is UBS Selling O’Connor?
UBS’s divestiture of O’Connor, a hedge fund unit it has owned for over three decades, reflects a broader trend among investment banks to streamline operations amid regulatory and economic pressures. O’Connor would seem to no longer align with UBS’s core focus on wealth management.
The Cantor-UBS deal comes amid a wave of consolidation in the hedge fund industry, as firms navigate market volatility and regulatory changes. Just last month, global hedge funds sold over $40 billion in stocks, the largest net selling in 15 years, following Trump’s tariff announcements, according to Reuters.
Looking ahead, Cantor’s move could signal a new wave of consolidation in the hedge fund industry, as firms seek scale.
Author: Andy Samu
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