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| Dillon Read | |
| Industry | Investment banking |
| Founded | 1832 New York City, New York, U.S. |
| Defunct | 1997 |
| Successor | UBS |
Dillon, Read & Co. was an investment bank based in New York City. In 1991, it was acquired by Barings Bank and, in 1997, it was acquired by Swiss Bank Corporation, which was in turn acquired by UBS in 1998.
Dillon Read traces its roots to 1832 with the founding of the Wall Street brokerage firm Carpenter & Vermilye by Col. Washington Romeyn Vermilye, George Carpenter, and William Montgomery Vermilye. The firm was notable for selling war bonds during the U.S. Civil War. [1]
In 1905, it was renamed after its principal partner, William A. Read. [1] In 1921, it was renamed as Dillon, Read & Co. to include partner Clarence Dillon. [2] The firm underwrote bonds issued by New York City and underwrote stocks and bonds of railroads and other companies. In 1921, the firm managed the rescue of faltering Goodyear Tire & Rubber Company. In 1925, it engineered the buyout of Dodge Brothers and the sale of the company to Chrysler in 1928. In the 1930, it underwrote foreign bonds and arranged financing for the petroleum industry. In 1937, it underwrote the bonds used to finance the Triborough Bridge. [1]
After WWI, they were the largest lender to Germany for reconstruction and reaped great profits, whose funds were used to found the IG Farben company and Vereinigte Stahlwerke during the interwar period. [3] [4]
C. Douglas Dillon, the son of Dillon Read co-founder Clarence Dillon, served as chairman of the company before serving as U.S. Secretary of the Treasury under John F. Kennedy and as U.S. Undersecretary of State and U.S. Ambassador to France under Dwight Eisenhower. [5]
Nicholas F. Brady served as chairman from 1970 to 1982, before serving as a United States Senator from New Jersey and as U.S. Secretary of the Treasury under Ronald Reagan and George H. W. Bush. [6]
In July 1986, the company was sold by its 35 partners to The Travelers Companies for $157.5 million, which was initiated when the Bechtel family cashed out its 30% holding in February, forcing the partnership to sell to Travelers to increase their pool of capital which had been depleted by $25 million. [7]
The corporate office was located at 535 Madison Ave in New York City. The downtown office was located at 120 Wall street in New York City.
In 1991, the company was sold to Barings for $122 million. [8] Barings went bankrupt and in 1995, management bought back the firm. [9]
In 1997, the company was sold to Swiss Bank Corporation in 1997 and merged with S. G. Warburg & Co., to become Warburg Dillon Read. [10]
In 1998, it became part of UBS when Swiss Bank Corporation merged with Union Bank of Switzerland to become UBS. [11]
The Dillon Read name was dropped by 2000. In June 2005, UBS established Dillon Read Capital Management (DRCM), led by former UBS Investment Bank head John P. Costas.
On May 3, 2007, UBS announced the closure of Dillon Read Capital Management. After profits of $1.2 billion in 2006, the division lost 150 million Swiss Francs in the first quarter of 2007, primarily due to bets on the sub-prime mortgage industry in the United States. The assets under management were transferred into UBS's main asset management business. [12] The division had raised $1.2 billion in assets under management. [13] [14]
In her 2008 book, UBS: les dessous d'un scandale, Myret Zaki asserted that had UBS listened to Dillon Read Management, UBS could have limited its losses from the subprime mortgage crisis to $500 million instead of $40 billion. [15]
Union Bank of Switzerland (UBS) was a Swiss investment bank and financial services company located in Switzerland. The bank, which at the time was the second largest bank in Switzerland, merged with Swiss Bank Corporation in 1998 to become UBS. This merger formed what was then the largest bank in Europe and the second largest bank in the world.
Swiss Bank Corporation was a Swiss investment bank and financial services company located in Switzerland. Prior to its merger, the bank was the third largest in Switzerland, with over CHF 300 billion of assets and CHF 11.7 billion of equity.
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Michael W. Vranos is an American hedge fund manager and philanthropist who in the 1990s was referred to by some as the "most powerful man on Wall Street." In 1993, he reportedly earned $15 million from trading mortgage bonds. Fortune Magazine once called him "one of the best bond traders on Wall Street." According to a 2007 Wall Street Journal article, he has continued to be regarded as "the best-known mortgage-bond trader on Wall Street."
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Union Securities Corporation was an independent investment banking firm in existence from 1938 through its acquisition in 1956, although the name would survive through 1972. Union Securities was created in 1938 as a spinoff of the investment banking operations of J. & W. Seligman & Co. as a result of the Glass-Steagall Act.
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John P. Costas is an American businessman, banker, and trader. He is the former chairman and CEO of UBS Investment Bank, where he oversaw the growth of the Swiss bank's investment banking franchise globally from 2000 to 2005. From 2005 through 2007, Costas was the chairman and CEO of Dillon Read Capital Management, a UBS proprietary trading unit and alternatives management company.
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William Montgomery Vermilye was an American banker and philanthropist.
Col. Washington Romeyn Vermilye was an American banker who served as president of the New York Stock Exchange.
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