Cantor Fitzgerald is seeking to adjust the terms of its acquisition of UBS’s O’Connor hedge fund unit following significant losses tied to the bankruptcy of First Brands Group, according to a report by Bloomberg citing unnamed sources familiar with the matter.

The New York-based investment bank, which agreed to purchase the unit in May, is reportedly discussing excluding O’Connor’s Working Capital Finance strategy, the segment most exposed to First Brands, and lowering the overall purchase price. When First Brands filed for Chapter 11 protection on 28 September after failing to refinance $6bn in loans, court documents showed that O’Connor held a $116.1m claim in supply chain finance.

The renegotiation comes amid broader fallout from First Brands’ collapse, which has already impacted other firms including Jefferies Financial Group, whose fund had a substantial portion of its trade finance portfolio tied to the auto-parts supplier. UBS itself faces more than $500m in exposure through various strategies, with UBS Hedge Fund Solutions holding a $233.7m claim.

While the transaction, expected to close in Q4 2025, is unlikely to be cancelled, the ongoing talks illustrate the challenges of managing risk in trade finance, a sector repeatedly hit by high-profile failures such as Greensill Capital. UBS and Cantor had initially planned a long-term revenue sharing arrangement following the acquisition, but the recent losses are prompting both firms to reassess the deal structure.

Representatives for UBS and Cantor declined to comment. UBS shares briefly rose after the news before trimming gains, closing at 32.82 Swiss francs ($40.95) in Zurich.

The O’Connor unit, originally a private derivatives and market-making partnership acquired by UBS in 1992, now operates hedge fund strategies ranging from multi-strategy and event-driven to private credit.