UBS has moved to reassure staff at Global Asset Management (GAM) that their numbers will not be cut, despite its eagerness to reduce GAM's high cost base.
Responding to questions sent in anonymously by GAM staff, Burkhard Poschadel, the UBS man appointed as GAM group chief executive, told the firm its weakness was its expensive administrative and client-servicing operation.
According to fund research group Fitzrovia International, the total expense ratios on GAM's funds are among the most expensive in Europe.
Poschadel said he was 'less inclined' to invest in this side of the business than in the directly client-facing side. His aim is to increase the proportion of staff involved in asset gathering.
Andrew Hanges, the chief executive of GAM UK (and a GAM executive prior to its acquisition by UBS last year) said: 'There is no plan to cut staff. There is nothing in the budget for such a thing, and that goes as far as 2001.
'At the start of this year we had 360 administrative staff and 240 potentially client-facing staff. The figures are now 360 and 260.'
He wants to move towards an equal balance. Natural wastage within the admin side looks a likely strategy.
Hanges and Poschadel emphasise their plan is to cut the expense ratio by growing the business rather than cutting costs. Hanges said that, with the same number of people, it could manage funds of $100bn, compared to the current $15bn.
To this end, the loss of the late Gilbert de Botton, GAM's founder, is a blow.
De Botton's personal contacts formed the foundation of the business. However, use of the UBS distribution network is developing. GAM processed its first UBS private client trade last Thursday (September 21).
Hanges said UBS was determined to leave GAM to its own devices. Fund managers (who have not been given golden handcuffs) will continue to work unfettered by UBS' risk control mechanisms.
Decisions on capital investment, product launches, staff hires and staff remuneration were solely GAM's, he said.
Elsewhere, UBS has acquired 49% of hedge fund manager Quaestor as a result of the purchase of current stake holder PaineWebber.
Quaestor's chief in London is Matthew Lovett, who recently took over from David Steyn, newly recruited by Sanford C Bernstein.
He says he does not believe that UBS will seek to make any change to the way his business operates. 'The other - 51% - shareholder, Yasuda Life, was happy to agree to the deal.'
Quaestor is a market-neutral specialist. Last year saw indifferent returns for the firm, but the volatility of its returns remains well under control.
The company manages a total of $300m (€351m). It is receiving more inquiries from institutions concerned at the slowdown in market-related returns. But conversion of inquiries into solid gains tends to be relatively slow.