Dillon, Read & Co. was an

investment bank Investment is traditionally defined as the "commitment of resources into something expected to gain value over time". If an investment involves money, then it can be defined as a "commitment of money to receive more money later". From a broade ...

based in

New York City New York, often called New York City (NYC), is the most populous city in the United States, located at the southern tip of New York State on one of the world's largest natural harbors. The city comprises five boroughs, each coextensive w ...

. In 1991, it was acquired by

Barings Bank Barings Bank was a British merchant bank based in London. It was one of England's oldest merchant banks after Berenberg Bank, Barings' close collaborator and German representative. It was founded in 1762 by Francis Baring, a British-born member ...

and, in 1997, it was acquired by

Swiss Bank Corporation Swiss Bank Corporation (French language, French: ''Société de banque suisse''; German language, German: ''Schweizerischer Bankverein'') was a Swiss Investment banking, investment bank and financial services company located in Switzerland. Prio ...

, which was in turn acquired by UBS in 1998.

History

Carpenter & Vermilye

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 War bonds (sometimes referred to as victory bonds, particularly in propaganda) are debt securities issued by a government to finance military operations and other expenditure in times of war without raising taxes to an unpopular level. They are ...

during the U.S. Civil War.

Dillon, Read & Co.

In 1905, it was renamed after its principal partner, William A. Read. In 1921, it was renamed as Dillon, Read & Co. to include partner

Clarence Dillon Clarence Dillon (born Clarence Lapowski; September 27, 1882 – April 14, 1979) was an American financier, and namesake of Dillon, Read & Co., an investment bank. In 1957, Fortune Magazine listed Dillon as one of the richest men in the United Stat ...

. 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 Dodge is an American brand of automobiles and a division of Stellantis, based in Auburn Hills, Michigan. Dodge vehicles have historically included performance cars, and for much of its existence, Dodge was Chrysler's mid-priced brand above P ...

and the sale of the company to

Chrysler FCA US, LLC, Trade name, doing business as Stellantis North America and known historically as Chrysler ( ), is one of the "Big Three (automobile manufacturers), Big Three" automobile manufacturers in the United States, headquartered in Auburn H ...

in 1928. In the 1930, it underwrote foreign bonds and arranged financing for the

petroleum industry The petroleum industry, also known as the oil industry, includes the global processes of hydrocarbon exploration, exploration, extraction of petroleum, extraction, oil refinery, refining, Petroleum transport, transportation (often by oil tankers ...

. In 1937, it underwrote the bonds used to finance the Triborough Bridge. After WWI, they were the largest lender to Germany for reconstruction and reaped great profits, whose funds were used to found the

IG Farben I. G. Farbenindustrie AG, commonly known as IG Farben, was a German Chemical industry, chemical and Pharmaceutical industry, pharmaceutical conglomerate (company), conglomerate. It was formed on December 2, 1925 from a merger of six chemical co ...

company and Vereinigte Stahlwerke during the

interwar period In the history of the 20th century, the interwar period, also known as the interbellum (), lasted from 11 November 1918 to 1 September 1939 (20 years, 9 months, 21 days) – from the end of World War I (WWI) to the beginning of World War II ( ...

. C. Douglas Dillon, the son of Dillon Read co-founder

, served as

chairman The chair, also chairman, chairwoman, or chairperson, is the presiding officer of an organized group such as a board, committee, or deliberative assembly. The person holding the office, who is typically elected or appointed by members of the gro ...

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 Dwight David "Ike" Eisenhower (born David Dwight Eisenhower; October 14, 1890 – March 28, 1969) was the 34th president of the United States, serving from 1953 to 1961. During World War II, he was Supreme Commander of the Allied Expeditionar ...

. 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 Ronald Wilson Reagan (February 6, 1911 – June 5, 2004) was an American politician and actor who served as the 40th president of the United States from 1981 to 1989. He was a member of the Republican Party (United States), Republican Party a ...

and

George H. W. Bush George Herbert Walker BushBefore the outcome of the 2000 United States presidential election, he was usually referred to simply as "George Bush" but became more commonly known as "George H. W. Bush", "Bush Senior," "Bush 41," and even "Bush th ...

. In July 1986, the company was sold by its 35 partners to

The Travelers Companies The Travelers Companies, Inc., commonly known as Travelers, is an American multinational insurance company. It is the second-largest writer of U.S. commercial property casualty insurance, and the sixth-largest writer of U.S. personal insurance t ...

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. 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.

Barings and Swiss Bank

In 1991, the company was sold to Barings for $122 million. Barings went bankrupt and in 1995, management bought back the firm. In 1997, the company was sold to Swiss Bank Corporation in 1997 and merged with S. G. Warburg & Co., to become Warburg Dillon Read. In 1998, it became part of UBS when Swiss Bank Corporation merged with Union Bank of Switzerland to become UBS.

Dillon Read Capital Management

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 Franc The Swiss franc, or simply the franc, is the currency and legal tender of Switzerland and Liechtenstein. It is also legal tender in the Italian exclave of Campione d'Italia which is surrounded by Swiss territory. The Swiss National Bank (SNB) iss ...

s in the first quarter of 2007, primarily due to bets on the sub-prime mortgage industry in the United States. The

assets under management In finance, assets under management (AUM), sometimes called fund under management, refers to the total market value of all financial assets that a financial institution—such as a mutual fund, venture capital firm, or depository institutio ...

were transferred into UBS's main asset management business. The division had raised $1.2 billion in assets under management. 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 The American subprime mortgage crisis was a multinational financial crisis that occurred between 2007 and 2010, contributing to the 2008 financial crisis. It led to a severe economic recession, with millions becoming unemployed and many busines ...

to $500 million instead of $40 billion.

References