Dillon Read Capital Management: UBS does a U-turn

Challenges of running prop and client money prove too much for Dillon Read Capital Management.

John Costas, UBS: DRCM offered him a painful lesson

The lesson to be learnt from UBS’s unexpected closure of Dillon Read Capital Management? Don’t mix bank and client money.

John Costas, head of UBS’s investment bank, was given the remit in June 2005 to carve out and run the bank’s proprietary trading business. The subsidiary, Dillon Read Capital Management (DRCM), was to be developed so that outside investors’ money would be accepted in managed accounts and funds.