09.10.2025
UBS funds and the insolvency of First Brands: A new Greensill debacle for investors?
The insolvency of First Brands Group, LLC ("First Brands") is once again shaking up the supply chain finance market and directly and indirectly affecting several UBS investment funds. Particularly affected are the UBS Working Capital Finance Opportunistic Fund, UBS Hedge Fund Solutions, and various UBS Asset Management funds, which have invested a total of more than $500 million in First Brands. The value of the affected funds is estimated to have fallen by 10 to 20 percent, resulting in enormous losses for investors.
First Brands, a global manufacturer and supplier of automotive replacement parts with approximately 26,000 employees and reported revenues of approximately US$5 billion in 2024, filed for Chapter 11 bankruptcy on September 28, 2025, due to liabilities of more than US$10 billion.
The following overview shows identified first-brand exposures of individual UBS vehicles:
| UBS unit / fund area | Exposure type | Claim / amount (USD) | Seniority | Brief note |
|---|---|---|---|---|
| UBS Hedge Fund Solutions | Supply-chain finance / trade finance | 233.7 million | Unsecured | Largest unsecured creditor in the case. |
| O’Connor (formerly UBS; sale to Cantor agreed) | Unsecured notes / SCF receivables | 116.1 million | Unsecured | Separate claim of the O’Connor vehicles. |
| UBS Asset Management (various funds) | Loan receivables | >160 million | Secured | Secured claims; tranche-level details undisclosed. |
| UBS total (multiple vehicles) | Mixed (debt & SCF) | >500 million | Mixed | Group-wide exposure across various structures. |
The current events surrounding First Brands are clearly reminiscent of the Greensill debacle. In both cases, Greensill and First Brands, supply chain financing played a central role, often involving complex off-balance-sheet structures. Investment risks are often insufficiently disclosed in such cases. The structures serve to seemingly outsource credit risks, but they make it difficult for investors to gain an overview of the actual risks. Additional risks often arise from a concentration of investments in large individual exposures.
Similar to the Greensill case, the First Brands insolvency threatens legal disputes against the banks, investment advisors/brokers, and fund service providers involved, as well as possible criminal investigations against responsible employees and managers.
Investors in UBS funds face significant risks of loss as a result of the First Brands insolvency. The value of the affected funds is likely to have fallen by 10 to 20 percent, affecting several hundred million US dollars of investor funds. The affected UBS funds continue to be managed as "active" and are not in liquidation. At the same time, however, they face enormous valuation discounts and high default risks.
Similar to the Greensill case, aggrieved investors may be entitled to claims against advisors, brokers, managers, banks, or fund service providers. In particular, claims for damages arising from breaches of duty in investment advice or brokerage due to missing or incorrect risk disclosure, lack of transparency, or conflicts of interest may be considered.
Anyone affected by losses in value should seek legal clarification as to whether claims can be asserted. As experienced lawyers in the field of banking litigation, we offer you competent support in examining and enforcing your claims, drawing on our experience in successfully representing various investors in court proceedings for damages in the triple-digit million range in connection with the Greensill insolvency. Our close cooperation with LALIVE has proven to be extremely advantageous in this regard, enabling us to obtain information from the criminal files of the investigations initiated in Switzerland against various employees of the investment advisors and fund service providers involved.
If you have any questions regarding the assertion of possible claims for loss of value of investments in connection with the First Brands insolvency, please do not hesitate to contact our authors.
Dr Stephan Bausch, D.U.
Partner
Cologne
stephan.bausch@luther-lawfirm.com
+49 221 9937 25782
Dr Borbála Dux-Wenzel, LL.M.
Partner
Cologne
Borbala.Dux-Wenzel@luther-lawfirm.com
+49 221 9937 25100
Dr Marco Jerczynski
Counsel
Essen
marco.jerczynski@luther-lawfirm.com
+49 201 9220 0
Stephanie Quaß
Counsel
Frankfurt a.M.
stephanie.quass@luther-lawfirm.com
+49 69 27229 25782