End of an Era: UBS Pulls Plug on Mortgage Research

As part of its previously-announced 2,000 job cuts, UBS AG (UBS) is yanking a widely-read mortgage publication that has become a staple among nearly every secondary mortgage market participant worth their salt, HousingWire has learned. UBS has shuttered the Mortgage Strategist after 15 years of publication, as it closes its asset-backed securities group — which includes mortgages. The move underscores much of what has become of the U.S. mortgage market in the past year, and marks the end of an era for those on the Street, for whom the weekly Mortgage Strategist literally set the pace for mortgage research. Reuters noted that the publication had earned a number 1 ranking in mortgage strategy for nine years straight, according to an annual Institutional Investor survey. HW contributor and magazine columnist Linda Lowell co-founded the publication along with Laurie Goodman while at Paine Webber in 1993, Reuters noted; Paine Webber was later acquired by UBS. She told the news service that “the Strategist was read in every shop. All the competition got it from customers within hours of its distribution.” The Mortgage Strategist published its last issue earlier this week. The move comes amid the literal death of the non-agency mortgage market — UBS will shed up to 40 jobs in its asset-backed trading and research operations, as a result. The company will maintain a presence in the agency market — which, for mortgages, seems likely to be the only meaningful market that will exist in the foreseeable future. The death of the well-known UBS publication also underscores an emerging problem for hedge funds and institutional investors looking to possibly trade in the private-party RMBS and CDO markets. Many are finding their sources of research and insight disappearing along with the sell side of the business that once funded them. “Some large players are planning to trade in what may be a multi-trillion dollar junk bond space, essentially,” said one fund manager, who asked not to be named. “But they’ll be facing an absolute dearth of research in the space, given the lack of new issuance.” Disclosure: The author held no relevant positions when this story was originally published; additional positions may be held indirectly via mutual funds. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.