Monday, 22 September 2014
Last updated 5 hours ago
May 3 2007 | 10:51am ET
While other investment banks are beefing up their hedge fund offerings, UBS is pulling the plug. The Swiss bank is shutting down its two-year-old hedge fund, Dillon Read Capital Management, after its 150 million Swiss francs (US$123 million) loss pushed profits down for the third straight quarter.
UBS Chief Financial Officer Clive Standish blamed the downturn in the U.S. subprime mortgage market, which “obviously weakened” its investments in U.S. mortgage-backed securities. CEO Peter Wuffli said in a statement that Dillon Read, named for Dillon Read & Co., a prominent New York investment bank acquired by a UBS predecessor in 1997, “did not meet our expectations.”
John Costas, the former investment banking chief who headed the unit, will stay on to shut Dillon Read down—which will cost the bank US$300 million—and will remain with the bank in an advisory role, Bloomberg News reports. The bank had set up the hedge fund in 2005 in an effort to keep Costas on staff. Dillon Read President Michael Hutchins will leave UBS, while most of the hedge fund’s other 250 employees will be transferred to the investment banking group.
UBS said that first quarter income fell to 3.28 billion Swiss francs (US$2.7 billion), down from 3.5 billion Swiss francs (US$2.9 billion) a year earlier.
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.