Exclusive: UBS poaches Bank of Montreal oil banking team - sources

By Mike Stone

(Reuters) - UBS AG (:UBSN.S) has poached a U.S. team of 15 oil and gas investment bankers from Canada's fourth largest bank, Bank of Montreal (BMO) (Toronto:BMO.TO - News), marking a shift in power in the energy banking market, according to people familiar with the matter.

The moves come amid plummeting oil prices that have prompted banks to try to lure talented energy bankers with deep technical expertise to help them win new investment banking business from companies looking to shed assets.

The investment banking business in the oil and gas sector has shifted from a focus on initial public offerings when oil prices were high, to advising companies on deals to raise cash, as their earnings dwindle in a lower oil price environment.

The team leaving BMO is the "acquisitions and divestitures" (A&D) group tasked with the complex engineering and technical research needed to value oil and gas deposits laying far beneath the earth's surface, the people said this week.

The leader of that BMO team, Miles Redfield, is based in Houston, Texas, where he will remain as he takes a senior role at UBS while continuing to lead that team, the people added.

UBS has a reserve-based lending business in Dallas but has so far lacked a team of acquisition and divestiture bankers to provide the in-depth technical advice which clients now demand, according to the sources.

By poaching Bank of Montreal's bankers, UBS will join the ranks of other bulge bracket banks such as Citigroup (NYSE:C - News) and Morgan Stanley (NYSE:MS - News), which have offered such technical expertise to clients for some time.

"Having deep technical expertise is now not just a nice-to-have, it is a must-have, and without it you cannot be competitive in energy M&A," said Bobby Tudor, CEO of Tudor Pickering Holt & Co, a smaller competitor with a large acquisition and divestiture investment banking team.

Teams staffed with 20 acquisition and divestiture investment bankers or more have helped smaller firms such as Evercore Partners Inc (NYSE:EVR - News), Jefferies LLC and Simmons & Co compete with larger peers. For example, Tudor's firm completed the most U.S. energy M&A transactions of any competitor in the 2010-2014 period, Tudor said.

One of the sources said BMO will have a small team remaining to perform A&D work, so its U.S. capacity for such work will not completely diminish.

UBS and BMO declined to comment. Redfield did not immediately respond to a request for comment.

(This story restores dropped word "with" in first paragraph.)

(Reporting by Mike Stone in New York; Editing by Christian Plumb)