Business Context and Reporting Period
This Form 6-K filing by UBS Group AG and UBS AG, dated March 17, 2022, reports an ad hoc announcement regarding a strategic divestiture. UBS Asset Management has agreed to sell its holding in Mitsubishi Corp.-UBS Realty Inc. (MC-UBSR), a Japanese real estate joint venture established in 2000 with Mitsubishi Corporation, to KKR & Co. Inc.
Key Financial Metrics
- Expected Gain: UBS anticipates recording a gain of approximately USD 0.9 billion in its Asset Management segment upon transaction close.
- Capital Impact: The transaction is expected to result in a Common Equity Tier 1 (CET1) capital increase of approximately USD 0.9 billion.
- Assets Under Management (AUM): The divested entity, MC-UBSR, manages approximately USD 15 billion in assets across two Tokyo Stock Exchange-listed J-REITs.
- Revenue/Profit/Cash Flow: The filing text does not provide specific revenue, profit, or cash flow figures for the reporting period, as this is a transaction announcement rather than a periodic financial report.
Material Changes
The primary material change is the exit from a 20-year joint venture in the Japanese real estate market. The sale concludes the partnership with Mitsubishi Corporation. However, UBS explicitly states that its asset management, wealth management, and investment banking businesses operating in Japan will not be affected by this sale. UBS Japan Advisors will continue to advise clients on Japanese property investments.
Outlook, Risks, and Management Commentary
Transaction Timeline: The deal is expected to close in April 2022, subject to required filings and regulatory approvals.
Management Commentary: Suni Harford, President of UBS Asset Management, stated that the Japanese market remains a cornerstone of the Real Estate & Private Markets business in Asia Pacific. UBS remains focused on capturing growth opportunities in the region through its real estate investment unit.
Risks and Contingencies: The closing is contingent upon regulatory approvals. The filing includes a standard cautionary statement regarding forward-looking statements, noting that actual results may differ materially due to risks and uncertainties.
Key Facts for Investor Verification
- Confirmation of the transaction closing date in April 2022.
- Verification of the final USD 0.9 billion gain and CET1 capital impact in the next quarterly report.
- Regulatory approval status for the sale to KKR.
- Continuity of operations for UBS Japan Advisors and other Japanese business lines post-divestiture.