UBS’s in-house hedge fund Dillon Read Capital Management is to begin accepting investment from outside institutional investors. The Zurich-based bank’s chief financial officer Clive Standish confirmed the move this week, although he gave no details on the amount of new investment he hoped the fund would attract.
Dillon Read is currently being run by UBS’s former head of investment banking John Costas, who set up the fund in early June this year. He took UBS’s principle finance and commercial real estate businesses and turned them into an in-house hedge fund with a total of 175 traders, who previously were investing funds solely from UBS investment bank. The move is seen as an attempt by UBS to compete with the more popular hedge funds that are taking business away from the investment bank. It is also an opportunity for the bank to access the potentially lucrative returns that alternative investment strategies involved can provide.