Finance
UBS to liquidate O'Connor funds hit by First Brands bankruptcy
Published by Global Banking and Finance Review
Posted on November 7, 2025
Last updated: January 10, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on November 7, 2025
Last updated: January 10, 2026
(Reuters) -UBS Group is winding down investment funds run by its hedge fund unit O'Connor, it said on Friday, after suffering losses due to exposure to bankrupt U.S. auto parts supplier First Brands Group.
The liquidation comes after UBS CFO Todd Tuckner said in October the bank was moving ahead with O'Connor's sale to U.S. brokerage Cantor Fitzgerald.
He had acknowledged that the bank is "working through" whether funds with First Brands exposure would be included in the transaction.
"We informed investors last month that O'Connor's Working Capital Opportunistic funds are being wound down and the majority of the funds' assets will be monetized by the end of the year," a UBS spokesperson said.
"As a priority, we're taking steps to protect clients' interests and maximize recovery of the remaining First Brands Group-related positions through the complex bankruptcy process," the spokesperson said in an emailed statement to Reuters.
First Brands filed for bankruptcy protection in September after disclosing liabilities exceeding $10 billion.
UBS has more than $500 million in exposure to First Brands across several investment funds, including those managed by O'Connor, according to U.S. court filings.
The Swiss bank emphasized during its third-quarter earnings that it has no balance sheet exposure to First Brands and that the affected funds, targeted at sophisticated investors with clear risk disclosures, breached no investment guidelines.
UBS' plans to wind down its funds with First Brands Group exposure were first reported by The Financial Times on Thursday.
(Reporting by Raechel Thankam Job in Bengaluru and Saeed Azhar in New York; Editing by Shreya Biswas)
Bankruptcy is a legal process through which individuals or businesses that cannot repay their debts can seek relief from some or all of their liabilities. It allows for a fresh start financially, often involving asset liquidation or repayment plans.
A hedge fund is an investment fund that pools capital from accredited investors and employs various strategies to earn active returns for its investors. Hedge funds can invest in a wide range of assets and often use leverage.
Liquidation is the process of selling off a company's assets to pay creditors when a company is unable to meet its financial obligations. It often occurs during bankruptcy proceedings.
An investment fund is a pool of money collected from multiple investors to invest in various financial assets, such as stocks, bonds, or real estate. Investment funds are managed by professionals to achieve specific investment objectives.
Exposure in finance refers to the amount of money that an investor or company has at risk in a particular investment or market. It indicates the potential for loss or gain based on market fluctuations.
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