Warburg Dillon Read

Warburg Dillon Read was an investment-banking brand used by Swiss Bank Corporation and, after 1998, by UBS. It was created in 1997 when Swiss Bank Corporation acquired the American investment bank Dillon, Read & Co. and combined it with the British merchant-banking business S. G. Warburg & Co. The name joined two established financial traditions: Dillon Read's Wall Street investment-banking history and Warburg's European merchant-banking heritage. Dillon Read's origins reached back to 1832, when Carpenter & Vermilye was established in New York. The firm developed into a prominent securities house, taking the name Dillon, Read & Co. in 1921. Its historical activities included underwriting corporate and municipal securities, arranging industrial finance, supporting railroad companies, and advising on major corporate transactions. Among the better-known transactions associated with its earlier history were the restructuring of Goodyear Tire & Rubber in 1921 and the acquisition of Dodge Brothers followed by its sale to Chrysler in 1928. The firm also participated in foreign-bond finance and petroleum-industry funding during the interwar period. Ownership of Dillon Read changed several times in the late twentieth century. The partnership was sold to The Travelers Companies in 1986, then to Barings in 1991. After Barings collapsed, management bought the business back in 1995. Swiss Bank Corporation acquired it in 1997 and combined it with S. G. Warburg & Co. to create Warburg Dillon Read. The new brand represented an effort to integrate a major American advisory and underwriting franchise with a respected European corporate-finance platform. The brand's independent life was brief. In 1998, Swiss Bank Corporation merged with Union Bank of Switzerland to form UBS. Warburg Dillon Read consequently became part of the enlarged UBS group's investment-bank structure. UBS subsequently reorganized and consolidated its investment-banking activities, and the Warburg Dillon Read name was discontinued around 2000. It therefore survives principally as a historical stage in the development of UBS Investment Bank rather than as an operating financial institution. The Warburg Dillon Read name is sometimes discussed alongside Dillon Read Capital Management, an investment-management unit established by UBS in 2005. That later unit drew on the Dillon Read name but was not the same entity as the 1997-2000 Warburg Dillon Read investment-banking brand. Dillon Read Capital Management was closed in 2007 after losses connected largely with positions exposed to the U.S. subprime-mortgage market. The episode is relevant to the broader Dillon Read name and UBS's history, but it should not be treated as evidence that Warburg Dillon Read itself continued operating after its brand was retired.

Warburg Dillon Read was formed in 1997 during a period of rapid consolidation in international investment banking. Its immediate predecessor on the American side was Dillon, Read & Co., a New York financial institution whose lineage extended to Carpenter & Vermilye, founded in 1832. Dillon Read developed expertise in securities underwriting, corporate finance, industrial funding, and major restructuring assignments. It adopted the Dillon, Read & Co. name in 1921 and became associated with prominent transactions including assistance to Goodyear Tire & Rubber and the acquisition and later disposition of Dodge Brothers. The firm's ownership history reflected the changing economics of Wall Street partnerships. In 1986, its partners sold the business to The Travelers Companies. Travelers later sold it to Barings in 1991. Following the failure of Barings, Dillon Read's management bought the firm back in 1995. Swiss Bank Corporation acquired Dillon Read in 1997 and merged it with S. G. Warburg & Co., a major European merchant-banking and corporate-finance business. The combined operation was named Warburg Dillon Read, linking the two predecessor franchises in a single international investment-bank identity. The new brand had only a limited period of autonomy. In 1998, Swiss Bank Corporation merged with Union Bank of Switzerland to create UBS. Warburg Dillon Read was absorbed into UBS's enlarged investment-banking organization, where the parent company increasingly used the UBS name across its businesses. By approximately 2000, the Warburg Dillon Read label had been retired. A later UBS unit called Dillon Read Capital Management should be distinguished from Warburg Dillon Read. UBS established that investment-management operation in 2005 under John P. Costas. It closed in 2007 after reporting a first-quarter loss of CHF 150 million, attributed primarily to positions related to the U.S. subprime-mortgage market; its assets were transferred to UBS's main asset-management business. Although the later unit reused the Dillon Read name, it was not a continuation of the Warburg Dillon Read investment-banking brand.

1. 2000The brand is discontinued

   UBS retires the Warburg Dillon Read identity during the consolidation of its investment-banking operations.

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2. 1998UBS is formed

   Swiss Bank Corporation merges with Union Bank of Switzerland, making Warburg Dillon Read part of UBS.

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3. 1997Warburg Dillon Read is established

   Swiss Bank Corporation acquires Dillon Read and combines it with S. G. Warburg & Co. under the Warburg Dillon Read name.

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4. 1995Management buys back Dillon Read

   After the collapse of Barings, Dillon Read's management reacquires the firm.

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5. 1991Dillon Read is acquired by Barings

   Barings purchases Dillon Read as part of its expansion in investment banking.

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6. 1986Dillon Read is sold to The Travelers Companies

   The partnership is acquired by The Travelers Companies in a transaction intended to strengthen its capital base.

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7. 1921The firm adopts the Dillon, Read & Co. name

   The business adds Clarence Dillon's name and operates as Dillon, Read & Co., expanding its securities and corporate-finance activities.

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8. 1832Carpenter & Vermilye is founded

   The predecessor lineage of Dillon Read begins with the establishment of the New York brokerage firm Carpenter & Vermilye.

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A high-end international investment-banking franchise combining Dillon Read's New York securities and corporate-finance heritage with S. G. Warburg's European merchant-banking reputation.

• Investment bankingInvestment banking1997

  Warburg Dillon Read represented the combined investment-banking capabilities of Dillon Read and S. G. Warburg. Its scope included corporate advice, securities underwriting, capital raising, and international financial transactions carried out for companies, governments, and other institutional clients.

• Corporate finance and advisoryAdvisory1997

  The franchise inherited Dillon Read's long-standing role in corporate finance and Warburg's European merchant-banking advisory tradition. Activities included advice on acquisitions, restructurings, industrial finance, and strategic transactions.

• Debt and equity underwritingCapital markets1997

  The business arranged and underwrote stocks, corporate bonds, municipal securities, foreign bonds, and other capital-markets instruments. These activities extended the predecessor firms' historical underwriting role into UBS's international investment-bank platform.

• 1998Integrate Warburg Dillon Read into UBSM&A

  Swiss Bank Corporation merged with Union Bank of Switzerland to form UBS.

  What changed. Warburg Dillon Read was incorporated into the new UBS group's investment-banking activities.

  Aftermath. UBS progressively consolidated the inherited brands and discontinued the Warburg Dillon Read identity around 2000.

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• 1997Combine Dillon Read with S. G. WarburgM&A

  Swiss Bank Corporation sought to combine its newly acquired American investment bank with the European merchant-bank franchise S. G. Warburg & Co.

  What changed. The two businesses were brought together under the Warburg Dillon Read name.

  Aftermath. The brand became part of UBS after the 1998 Swiss Bank Corporation and Union Bank of Switzerland merger, and was later retired.

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• 2000UBS retires the Warburg Dillon Read brand

  UBS discontinued the Warburg Dillon Read name as it consolidated its investment-banking businesses under the broader UBS structure.

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• 1998Warburg Dillon Read becomes part of UBS

  The merger of Swiss Bank Corporation and Union Bank of Switzerland created UBS, bringing Warburg Dillon Read into the new group's investment-banking operations.

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• 1997Swiss Bank Corporation creates Warburg Dillon Read

  Swiss Bank Corporation combined its newly acquired Dillon Read business with S. G. Warburg & Co., establishing the Warburg Dillon Read investment-banking brand.

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1. Warburg Dillon Read
2. Dillon, Read & Co.