In late June, we announced that
towards the end of the year we would
launch a new alternative investment
management business, Dillon Read
Capital Management, which will be
part of our Global Asset Management
Business Group.
The core of the business, to be headed
by John Costas, will be formed by
transferring the principal finance and
commercial real estate teams from
our Investment Bank. Approximately
120 staff, mainly based in New York,
will move from the fixed income, rates
and currencies area of our Investment
Bank to the new unit. Subsequently,
the trading strategies managed by the
team will be opened up to co-investment
from large, sophisticated clients,
and supplemented by further new
offerings. This will allow us to satisfy
the increasing demand from these
clients for long-term alternative investment
opportunities provided by strong
industry leaders. It will create a new
asset management revenue stream
from what has until now been a purely
in-house trading activity. We will retain
our current direct investment in the
relevant trading portfolios with the
Investment Bank. Control of the risk
on this and any incremental future
investments will be subject to our
usual processes. Returns achieved on
this capital will remain with the Investment
Bank, which, like other investors,
will pay a management fee to Dillon
Read Capital Management. This new
business is another example of leveraging
skill from the Investment Bank
into a broader client offering. In particular,
it will be an ideal complement
to the other alternative asset management
businesses at UBS.
As a result of moving to Dillon Read
Capital Management, John Costas will
leave UBS’s Group Executive Board at
the end of 2005, remaining non-executive
Chairman of the Investment Bank.
Huw Jenkins, previously head of the
equities business, has succeeded John
Costas as CEO of UBS’s Investment
Bank. He became a member of the
Group Executive Board on 1 July 2005.
