UBS Winds Down Funds as First Brands Bankruptcy Ripples Through Global Markets
From the desk of Jim Eccleston at ÍøÆسԹÏ
UBS Group AG has begun liquidating two invoice finance funds with direct exposure to First Brands Group, marking one of the earliest moves by a major financial institution to contain the fallout from the bankrupt auto-parts supplier’s collapse, as reported by Bloomberg Law.
The bank is closing the Working Capital Finance Opportunistic funds within O’Connor, its Chicago-based hedge fund unit. According to a source familiar with the matter, O’Connor faced redemption requests after the funds’ performance suffered due to concentrated exposure to First Brands. Bloomberg Law reports that UBS confirmed the wind-down and told investors that it expects to monetize most of the assets before year-end.
First Brands filed for bankruptcy in September, revealing more than $10 billion in liabilities owed to a broad group of global lenders. UBS emerged as one of the largest creditors. According to Bloomberg Law, the bank’s decision to unwind the funds reflects how Wall Street firms are moving to reassure investors as losses become clearer. The same source indicated that the funds are projected to recover roughly 70 percent of their net asset value by the end of the year.
UBS is also liquidating a separate high-grade strategy with no ties to First Brands, with full monetization expected by the end of 2025.
According to Bloomberg Law, UBS’ asset management division maintains approximately $500 million in exposure to First Brands across various strategies, including O’Connor and its broader hedge fund platform. Court filings show that O’Connor holds an unsecured claim of $116.1 million. UBS Hedge Fund Solutions reported a larger $233.7 million claim tied to supply chain financing. UBS Asset Management holds more than $160 million in secured claims through term loan interests and a sidecar facility established in June to raise capital from private credit investors.
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Tags: eccleston, eccleston law, ubs
