Dillon, Read & Co.

Dillon, Read & Co. was a prominent American investment bank from the 1920s into the 1960s.

Dillon Read originated in 1832 as the Wall Street brokerage firm Carpenter & Vermilye. However, it is best known for its actions during the 1920s. During that time Clarence Dillon managed the rescue of faltering Goodyear Tire & Rubber Company, engineered the buyout (in 1925) and subsequent sale of Dodge Motors (in 1928) to Chrysler, launched the first post-war closed-end investment trust (in 1924), and led the largest-ever stock offering (in 1926). By the end of the decade, Dillon Read was considered to be an investment-banking powerhouse, alongside J.P. Morgan & Co. and Kuhn, Loeb & Co..

Dillon Read was purchased by Swiss Bank Corporation (SBC) in 1997 and merged with London-based investment bank S. G. Warburg & Co. (purchased by SBC in 1995) to become Warburg Dillon Read. The merged entity, in turn, became part of UBS AG when the latter firm bought SBC.

The Dillon Read name was dropped by 2000 but recently re-emerged in the name of UBS's internal hedge-fund division, Dillon Read Capital Management (DRCM). During its brief 18-month existence, DRCM launched a successful fund of $1.2 billion (which was over-subscribed by 50%) for outside investors which returned 16.6% after fees( SEE BOARD OF DIRECTOR'S LETTER BELOW), making it one of the top multi-strategy funds for 2007. Moreover, DRCM had been profitable every month of operation for UBS, making $1.21 billion for the bank in each of 2005 and 2006.*(http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a3sm9FOrsWcg) {http://www.ubs.com/1/e/investors/presentations/2006.html?template=layer&selected=54112l} (2006 Q4 PAGE 35) This performance for 2005 and 2006 were record years of profitablity for the 185-year-old Dillon Read brand. UBS decided to close the fund as DRCM had substantial profits in the rest of its proprietary business for the year and over $150 million of profits in its outside fund. (SEE BOARD OF DIRECTORS LETTER BELOW)

TO: Shareholders of Dillon Read Financial Products Fund Ltd

 Limited Partners of Dillon Read Financial Products U.S. Fund L.P. 

FROM: The Board of Directors

September 11, 2007 Dear Investors:

You have already been advised by Dillon Read Capital Management (DRCM) that the final external audit of the Fund is complete and that the final payment of the redemption proceeds is being processed and will be paid shortly by the Administrator of the Fund. We regret the slight delay in making the final payment resulting from some minor delays in the audit process. Nonetheless, the Board of Directors felt it important to conduct the external audit to ensure full transparency and independence in ascertaining the NAV. This was necessary, in our judgment, both to protect the interest of the Fund and its investors as well as to ensure the integrity of the NAV calculation as of April 30, 2007. The DRCM financial staff and Ernest & Young performed professionally and worked hard to get the audit completed. We are pleased that the Funds have generated positive returns for investors from inception through April 30. Based on the final NAV, the net return for the Fund for 2007 through April 30 was 9.7% (not annualized) for both Class A and B shares, after fees and expenses. For the six-month period, November 2006 though April 2007, the net returns (not annualized) were 16.5% and 15.5% for Class A and Class B shares, respectively, after fees and expenses. You may recall that Class B shares were not permitted to invest in !hot issues." We take this opportunity to commend the excellent results by the DRCM management and staff, and wish them individually the best of luck in their future pursuits. Finally, we wish to thank you, the investors, for your patience and support throughout the past year. Very truly yours,

Board of Directors

Works about Dillon Read

• Sobel, Robert (1991). The Life and Times of Dillon Read. New York: Truman Talley Books/Dutton. ISBN 0-525-24959-1.
• Geisst, Charles R (2001). The Last Partnerships: Inside the Great Wall Street Money Dynasties. New York: McGraw-Hill. ISBN 0-071-36999-6.
• WetFeet.com (2001). The WetFeet.com Insider Guide: Warburg Dillon Read. San Francisco, CA: WetFeet.com. ISBN 1-582-07078-4.
• UBS quarterly earnings' disclosures:see UBS website-www.ubs.com, investor relations

External links

• Home page of Dillon Read Capital Management
• Dillon Read & the Aristocracy of Stock Profits
• INVESTMENT BANKS (BROKERAGE) — Business History of Firms
• Report on UBS's Write-Downs of 18 April 2008 (PDF), summary of UBS's report to the Swiss Federal Banking Commission (SFBC), includes the role of Dillon Read Capital Management in UBS
  • Geschichte eines kompletten Versagens – UBS-Bericht zur Hypothekenkrise zeigt verhängnisvolle Fehlleistungen auf, NZZ article of 21 April 2008 summarizing the report