UBS Asset Management is seeking to sell its direct infrastructure equity and debt investment business, which has recently grappled with senior departures and slow fundraising.

The Swiss group earlier this year started a process overseen internally by its own bankers to find a buyer for the unit, which has around USD 6.6bn of assets under management, said sources familiar with the situation.

UBS AM has contacted other asset managers that could be interested as potential buyers and requested initial bids by around mid-March.

It is not clear if it received any offers, although one source said New York-headquartered investment manager Neuberger Berman expressed initial interest.

A UBS spokesperson did not comment on a possible sale but said: “UBS has substantial growth ambitions for its asset management division. Asset management is investing in its differentiated and scalable real asset capabilities globally.”

Neuberger Berman declined to comment.

The sale of the direct infrastructure business is being handled in parallel with a possible disposal of a bigger unit holding a large part of UBS AM’s global real estate investment business, excluding its Swiss operations, said the sources.

The banking group is said to prefer offers for both arms but is also open to bids for each unit individually.

Neither is an easy sell, sources said.

The infrastructure business is weighed down by lacklustre performance by its first two infrastructure equity funds, which posted negative returns in recent years, according to filings by LPs Devon County Council and CalPers.

One source said the UBS group sees the direct infrastructure investment arm as a business largely “in run-off”.

It has recently struggled with fundraising for its infrastructure equity business. Its third equity fund closed in 2022 at below EUR 400m, against a EUR 1bn target, while fundraising for a co-invest vehicle stopped after obtaining an EUR 80m anchor investment, well short of a EUR 300m target.

Its third infrastructure equity fund however is performing well, posting a 16.9% return since inception, according to filings by an LP last year.

The business also still has a sizeable investment mandate for a large US investor, and is in the market to raise its third senior debt fund, Archmore Infrastructure Debt Platform III, with a EUR 2bn target, twice as much as its predecessor. It is also raising a US-focused energy storage fund targeting USD 600m.

The real estate business is struggling in the US with its legacy Trumbull Property Fund, a vehicle worth USD 8bn that last year had a USD 6bn queue of redemption requests pending.

The businesses on the block are part of UBS AM’s real assets group led by Joseph Azelby, who joined the Swiss banking group in 2019.

UBS AM’s sizeable infrastructure fund-of-funds operations are not part of the sale, sources said, after they were spun out of the real assets group and into a new unit called Unified Global Alternatives.

Compounding the challenges, several of the infrastructure arm’s executives have left in the past two years.

The infrastructure equity unit this year saw the departures of team head Andrew Morris alongside Borja de Luis, head of origination in Europe.

The former head of infrastructure debt, Alessandro Merlo, left in 2023 at the same time as director Richard Hulme, while director David Thoma exited this year to join Copenhagen Infrastructure Partners.

Tommaso Albanese, the long-standing global head of infrastructure equity and debt, retired in April 2024.

New York-based Danny Mills now runs the infrastructure equity business, while Viktor Kozel in London leads infrastructure debt, with both units overseen by Dan Dvorak.