Sergio Ermotti is returning to his roots in high finance – cashing in on a boom in a niche style of stock-listing with potentially huge payoffs.
The long-standing CEO of UBS, Sergio Ermotti, isn’t abandoning Wall Street altogether when he leaves the wealth manager next week: He is listed as the chairman of a so-called black-check company, which is seeking to raise $350 million, from January 1, citing U.S. securities filings.
The 60-year-old Swiss banker is a veteran City trader who began his career in investment banking in 1987 in equity derivatives and capital markets at Merrill Lynch. Ermotti, who is withdrawing from UBS altogether after he hands over to successor Ralph Hamers next week, already took a board job at Swiss Re, where he is poised to take over as chairman in April.
Ermotti is the latest potent financial sponsor to put his name on a Spac, which has raised eyebrows for their opaque set-up, huge fees, and tendency to attract short-term shareholders versus long-term investors. The highest-paid banker in Europe, Ermotti has realized more than 50 million francs in pay since taking the helm at UBS in 2011.
He is also passionate about the wealth manager’s prospects and apparently still a trader at heart: nearly two years ago, he doubled down with a $13 million personal bet on his own stock – effectively, one year’s pay worth of UBS shares. Ermotti is the biggest UBS shareholder in top management (4 million shares, or 0.2 percent voting rights).
Once relegated to a corner of Wall Street, the blank-check playbook is to create a shell company, seek a public listing for it, and then use the money raised through the listing to merge with an actual business.
The potentially lucrative special-purpose acquisition companies, or Spacs, have emerged primarily in the U.S. equity market. That is about to change: a Spac focused on European targets raised $600 million this month.