UBS executives announced today that the firm will create a new alternative investment group within UBS Global Asset Management. The unit, called Dillon Reed Capital Management, will offer fixed-income and real estate alternative investment strategies to large institutional investors, said John Fraser, UBS Global Asset Management chairman and CEO. "For some time now we have been aware of a number of emerging opportunities with large institutional clients who have a considerable appetite for higher alpha-generating investment products," said Mr. Fraser. "This new group is very much a model focusing on a handful of large global clients capable of making significant long-term commitments."
John Costas, current chairman and CEO of UBS Investment Bank, will lead Dillon Reed Capital. Over the next several months, 120 employees in the investment bank's principal finance and commercial real estate groups will join Mr. Costas in the new alternatives unit, said Mr. Fraser. He declined to discuss specifics but said the unit will offer "eclectic" and "high-return" alternative strategies. "We have already had what we consider to be a premier alternative investment management team within the investment bank," said Mr. Fraser. "This is a big leap forward for the asset management business and our development of a diversified set of investment capabilities and broader solutions for our clients."
Dillon Reed, which will mainly operate out of New York, is slated to launch in January 2006. UBS Global Asset Management had $38 billion in alternative assets under management as of June 1.