By Joan Gralla
NEW YORK, June 1 (Reuters) - UBS persuaded a U.S. municipal bond team that manages billions of dollars of assets to stay with the bank, reversing a decision made last week to join another employer, a bank spokeswoman said on Monday.
The four-member team is led by Elbridge Gerry, she said. Another team member, Kevin McIntyre, a senior portfolio manager, also decided to remain with UBS.
The asset management team serves wealthy individuals and institutions, including pension funds, and its departure would have further slashed UBS' muni business. In the spring of 2008, the bank shut the municipal bond underwriting unit it had inherited from Paine Webber in 2000 after failing to find a buyer.
The team's plan to join another employer, perhaps a boutique firm, led Western Investment LLC to warn that investors in a closed-end fund the bank managed risked getting trapped in what it called a 'worst case scenario -- a municipal fund managed by an investment adviser with little to no meaningful experience with municipal obligations.'
A UBS spokeswoman could not say which firm the employees had prepared to join and had no immediate comment on Western Investment's complaints, which reflected its dissatisfaction with the fund's performance.
The Salt Lake-city based hedge fund wants to replace UBS as the manager of the fund, called the Investment Grade Municipal Income Fund. But first it would have to win a majority of seats on the board in the January 2010 election, said Arthur Lipson, Western Investment's manager.
Western Investment narrowly lost such an election in January 2009. But just over 51 percent of the shareholders voted to bar UBS from serving as the fund's investment manager.
(Reporting by Joan Gralla; Editing by Dan Grebler) Keywords: UBS MUNICIPALS/ . Keywords: UBS MUNICIPALS/ (e-mail: joan.gralla@thomsonreuters.com; Tel: +1-646-223-6345; Reuters Messaging: joan.gralla.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
NEW YORK, June 1 (Reuters) - UBS persuaded a U.S. municipal bond team that manages billions of dollars of assets to stay with the bank, reversing a decision made last week to join another employer, a bank spokeswoman said on Monday.
The four-member team is led by Elbridge Gerry, she said. Another team member, Kevin McIntyre, a senior portfolio manager, also decided to remain with UBS.
The asset management team serves wealthy individuals and institutions, including pension funds, and its departure would have further slashed UBS' muni business. In the spring of 2008, the bank shut the municipal bond underwriting unit it had inherited from Paine Webber in 2000 after failing to find a buyer.
The team's plan to join another employer, perhaps a boutique firm, led Western Investment LLC to warn that investors in a closed-end fund the bank managed risked getting trapped in what it called a 'worst case scenario -- a municipal fund managed by an investment adviser with little to no meaningful experience with municipal obligations.'
A UBS spokeswoman could not say which firm the employees had prepared to join and had no immediate comment on Western Investment's complaints, which reflected its dissatisfaction with the fund's performance.
The Salt Lake-city based hedge fund wants to replace UBS as the manager of the fund, called the Investment Grade Municipal Income Fund. But first it would have to win a majority of seats on the board in the January 2010 election, said Arthur Lipson, Western Investment's manager.
Western Investment narrowly lost such an election in January 2009. But just over 51 percent of the shareholders voted to bar UBS from serving as the fund's investment manager.
(Reporting by Joan Gralla; Editing by Dan Grebler) Keywords: UBS MUNICIPALS/ . Keywords: UBS MUNICIPALS/ (e-mail: joan.gralla@thomsonreuters.com; Tel: +1-646-223-6345; Reuters Messaging: joan.gralla.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.