Why Swiss Bank Lured A Minnow

It likes Dillon Read's sterling reputation and blue-chip clients

Entering the Manhattan offices of old-line investment bank Dillon, Read & Co. is like stepping into a time warp. The teacups are china, not styrofoam; the bankers write with fountain pens, not ballpoints; and the desks are graceful old wooden rolltops, not boxy metal rectangles. Time seems to have passed Dillon Read by. Competitors, from Morgan Stanley & Co. to Merrill Lynch & Co., have globalized, diversified, and innovated to stay astride booming global capital markets. Meanwhile, Dillon Read peaked in the 1960s. Though retaining a core of blue-chip clients and its gentlemanly reputation, the firm has faded from view. "It's like a fish at 50,000 fathoms," quips a competitor. "Nobody can explain how they're still there."

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