International Investing

Per HedgeWorld,

Peter Wuffli’s sudden departure from his role as chief executive of Swiss banking giant UBS has caused some speculation among the local press, who are describing it as a “surprise move.” …

… In recent years UBS has rapidly overtaken Credit Suisse as Switzerland’s largest bank, but has suffered a number of setbacks lately. As a result, the bank’s share price has underperformed those of rivals such as Credit Suisse and Deutsche Bank by a wide margin over the past year.

Reversals that have affected the performance of the bank include the closure of New York-based trading unit Dillon Read Capital Management little more than a year after it began trading in earnest Previous HedgeWorld story. The unit suffered a series of trading losses related to wrong bets in the U.S. subprime mortgage market totaling around $124 million at the beginning of the year. In early May, a UBS spokesperson said the unit would be wound up at a cost of around $300 million to the bank. Some Zürich traders suggested that it was these hedge fund losses that ultimately cost Mr. Wuffli both the leadership of the bank and his future position as board chairman. Bank spokespeople refused to confirm that.

Not to mention,

NEW YORK (Reuters)—Heavy redemptions from investors concerned about their holdings of subprime mortgage securities claimed Braddock Financial Corp.’s Galena Street Fund as the latest hedge fund victim. Braddock, a top-performing bond hedge fund manager, on Thursday said it will liquidate the $300 million fund after redemptions slashed its assets by a quarter since 2006, Chief Executive Officer Harvey Allon said in an interview. The fund’s closure comes just days after United Capital Markets Holdings Inc. suspended redemptions on its funds exposed to the risky subprime mortgages.

The bleed thickens …