The former CEO of Swiss bank UBSs independent proprietary trading and hedge fund unit, Dillon Read Capital Management, is back in the game. John Costas, along with partner Michael Hutchins and four other former UBS executives, has pooled $25 million to start a new boutique investment bank in New York, PrinceRidge Group.
Costas, 52, has hired more than 50 traders and bankers over the past several months to trade corporate bonds and structured-securities products. We have established client relationships with more than a hundred institutions, including hedge funds and banks, he says. Before taking over the proprietary trading unit in 2001 and spinning it out to form Dillon Read in 2005, Costas was chairman and CEO of UBSs investment bank. He has much to prove this time around. Dillon Read suffered large losses when the subprime mortgage market imploded, and UBS reintegrated the fund back into its investment bank in 2007, returning about $1.5 billion to outside investors.