"It's Not Possible at the Moment to Estimate the Damage"
Jan. 05, 2010
Dr. Daniel Fischer, senior partner of the Zurich law firm "Fischer & Partner" has played a central role in the aftermath of a number of the latest financial scandals. He negotiated a succesful settlement – the first of its kind in Switzerland – on behalf of clients financially hit by the collapse of Lehman Brothers and is also part of the international alliance of attorneys representing victims of Bernard Madoff's ponzi scheme and other financial scandals like the recent problems with regard to the K1 hedge fund. He is now also representing investors of the UBS Global Property Fund. We have interviewed Dr. Fischer about the latest developments with regard to the UBS Global Property Fund.
MyPrivateBanking: Swiss bank UBS AG plans to dissolve the $6 billion Global Property Fund run by its private bank by selling assets and returning the proceeds to the fund's investors. Can you explain what caused the problems at the UBS fund?
Dr. Fischer: Predominantly the Global Property Fund is based upon investments in commercial real property in the USA, Japan, Europe etc.. At the end of 2007 it is known that the US real estate crisis hit the commercial real properties. This led to the fact that several clients wished to sell these securities and this led again to the circumstance that the property fund was lacking liquidity in order to reimburse the investors. The UBS' only action to actually save the Global Property Fund, was to command the closing of the Fund. This is a rather normal economical transaction and UBS cannot be blamed principally.
MyPrivateBanking: How many investors are potentially affected and are these predominantly private or institutional clients of UBS?
Dr. Fischer: There are about 107’000 clients financially hit by the closing of the Fund, predominantly clients with big portfolios and I also assume that institutions are affected as well. Generally, clients with an asset management mandate are affected. Apparently, 20% of the affected clients are from Switzerland.
MyPrivateBanking: What could be the consequences for these investors?
Dr. Fischer: The worst consequence for the investors would be a loss of 100%. There are others that speak of loss of approximately 40% . It is not possible at the moment to estimate the dimension of the damage.
MyPrivateBanking: What is your recommendation to the UBS customers and the management of UBS?
Dr. Fischer: In my opinion the legal position is quite good due to the fact that in the second half of the last year assets were placed in the client’s portfolios. I hope to lead negotiations with UBS in this case, since negotiations are better than court proceedings. I believe the today’s UBS management team is excellent. The bank has been subject to many changes, more than any other bank was and I hope that UBS will handle the situation with professionalism in order to regain their clients' trust.
MyPrivateBanking: Thank you very much for this interview.