Moelis to Leave CSFB for Smaller UBS Warburg

Ken Moelis, one of Southern California’s top investment bankers, is leaving the newly merged Credit Suisse First Boston for a far smaller banking firm: UBS Warburg.

The defection, announced by UBS on Tuesday, comes just a few weeks after CSFB completed its purchase of Donaldson, Lufkin & Jenrette Securities, where Moelis had been the star banker since the early 1990s.

CSFB had given Moelis, 42, the title of co-head of investment banking--a high-profile post--as part of its $11.5-billion purchase of DLJ.

Moelis’ promotion was followed by a decision by Mark S. Maron, head of CSFB’s investment banking operations for the West Coast, to depart in October for rival Lehman Bros., taking a crew of about two dozen CSFB staffers with him.

Now, Moelis, who managed a team of about 110 bankers at DLJ, is expected to take a large number of those bankers with him to UBS.

Moelis wasn’t available to comment on Tuesday.

The move to UBS Warburg, the investment banking arm of Swiss banking giant UBS, is considered a major shift for Moelis, because UBS is not viewed as a top-tier investment house.

In fact, UBS has struggled in the United States since entering the market in 1992. Even with its later acquisition of U.S. investment bank Dillon Read & Co., UBS has failed to rank among the top 10 bankers in terms of stock sales, debt deals or merger advisory.

Moelis will face a major challenge in helping build UBS’ American investment banking practice, observers say. UBS currently does not even have an investment banking office in Los Angeles, though it does have about 20 people working in private-client banking in the city’s downtown.

“It’s one Swiss bank poaching from another,” quipped one Los Angeles investment banker who did not want to be named.

UBS, like other major global financial companies, has been seeking to boost its size and scope. It recently bought U.S. brokerage PaineWebber Group.

One Los Angeles banker speculated that Moelis is moving in part to keep his Los Angeles team together, many of whom Moelis hired to help finance tech companies. Most of CSFB’s technology investment banking is done out of a large office in Palo Alto.

Moelis and his crew of bankers have long been a major force in junk-bond financing, though in recent years DLJ also had raised significant capital for tech companies. Moelis had been a key player at now-defunct Drexel Burnham Lambert before moving to DLJ after Drexel failed in 1990.

Moelis is expected to start his new job in the next three months, “upon satisfaction of his obligations to CSFB,” UBS said. Terms of his salary weren’t disclosed.

Moelis’ title at UBS will be co-head of Americas investment banking. The other co-head is UBS’ Robert Hotz, based in New York.