Monday, 25 July 2016
Last updated 2 days ago
May 15 2007 | 10:56am ET
UBS will be out of the hedge fund business sooner than later, the bank said today. Investment banking chief Huw Jenkins told investors at a conference in New York that Dillon Read Capital Management will be completely folded into the investment bank within a few months.
“We said the integration could take up to 12 months,” Jenkins said, adding, “from a practical point of view, I think it will be over and done within a couple of months.”
Dillon Read—founded less than two years ago and run by former UBS investment banking chief John Costas—had lost money for three straight quarters, including a $123 million loss in the first quarter on mortgage-backed securities trades. Jenkins noted that the hedge fund accounted for about 25% of the investment bank’s value-at-risk, and that UBS found it overly complicated to manage its own money alongside that of third-party investors.
Understandably, Jenkins noted that his focus this year will be to keep costs down.