Phillips & Drew
Encyclopedia
Phillips & Drew was a large stockbroking partnership and company based in the City of London
, England
. It was fully acquired by the Union Bank of Switzerland
in 1986, which itself merged with the Swiss Bank Corporation
in 1998, to become UBS AG
.
. After several unsuccessful partnerships, Phillips formed a partnership with his chief clerk, Harvey Richard ('Dick') Drew, to form G.A. Phillips & Co. in 1895. The name of the firm was changed to Phillips & Drew in 1905.
In 1905, the firm assumed the Phillips & Drew name with the arrival of Geoffrey Harvey Drew, Dick's brother, as a new partner and the retirement of Phillips (though he rejoined the firm in 1907). Until the late 1940s, the Drew family continued to hold a controlling position within the firm.
s. The firm began to derive most of its income in dealing in gilts
, a type of British government bond, for institutions. Perry also instituted a merit-based hiring and promotion system, moving away from hiring on the basis of family or personal connections. The firm grew to over 350 employees by the end of the 1960s.
Also, under Perry, the firm began to establish a reputation as a leading source of equity research and investment analysis.
, predecessor of today's UBS acquired a 29.9% minority interest in Phillips & Drew and two years later announced an acquisition of the firm. At the time of the acquisition, Phillips & Drew, with 60 partners and 593 staff, was the leading dealer of gilts
, convertible bond
s and other fixed income securities in the U.K. The firm was also a leading asset manager.
UBS initially had issues integrating Phillips & Drew, which it had renamed UBS Phillips & Drew. The firm lost £15 million when a rush of orders overwhelmed the firm’s settlement system in 1987. Then the bank lost £48 million as a result of Philips & Drew positions in the October 1987 stock market crash. Between April 1987 and February 1988, UBS was required to spend as much as £115 million to shore up Phillips & Drew. Phillips & Drew unit returned to profitability in 1992 after years of losses. Due to its performance issues, the Phillips & Drew name was discontinued by 1992 and the business was renamed UBS Limited. However, the Phillips & Drew name was retained in the asset management business that became known as Phillips & Drew Fund Management.
City of London
The City of London is a small area within Greater London, England. It is the historic core of London around which the modern conurbation grew and has held city status since time immemorial. The City’s boundaries have remained almost unchanged since the Middle Ages, and it is now only a tiny part of...
, England
England
England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...
. It was fully acquired by the Union Bank of Switzerland
Union Bank of Switzerland
Union Bank of Switzerland was a large integrated financial services company located in Switzerland. The bank, which at the time was the second largest bank in Switzerland, merged with Swiss Bank Corporation in 1998, to become UBS to form what was then the largest bank in Europe and the second...
in 1986, which itself merged with the Swiss Bank Corporation
Swiss Bank Corporation
Swiss Bank Corporation was a large integrated financial services company located in Switzerland...
in 1998, to become UBS AG
UBS AG
UBS AG is a Swiss global financial services company headquartered in Basel and Zürich, Switzerland, which provides investment banking, asset management, and wealth management services for private, corporate, and institutional clients worldwide, as well as retail clients in Switzerland...
.
Founding and early history
In 1885, George Allen Phillips became a member of the London Stock ExchangeLondon Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
. After several unsuccessful partnerships, Phillips formed a partnership with his chief clerk, Harvey Richard ('Dick') Drew, to form G.A. Phillips & Co. in 1895. The name of the firm was changed to Phillips & Drew in 1905.
In 1905, the firm assumed the Phillips & Drew name with the arrival of Geoffrey Harvey Drew, Dick's brother, as a new partner and the retirement of Phillips (though he rejoined the firm in 1907). Until the late 1940s, the Drew family continued to hold a controlling position within the firm.
1936–1984
The firm remained relatively small with business dependent upon individual clients until the arrival of Sidney Perry, who joined the firm as a partner in 1936. Perry, would rise to the leadership of the firm over the next decade and by the beginning of the 1950s, he was running Phillips & Drew. Under Perry's leadership, the firm shifted its focus from retail brokerage business toward institutional investorInstitutional investor
Institutional investors are organizations which pool large sums of money and invest those sums in securities, real property and other investment assets...
s. The firm began to derive most of its income in dealing in gilts
Gilts
Gilts are bonds issued by certain national governments. The term is of British origin, and originally referred to the debt securities issued by the Bank of England, which had a gilt edge. Hence, they are called gilt-edged securities, or gilts for short. The term is also sometimes used in Ireland...
, a type of British government bond, for institutions. Perry also instituted a merit-based hiring and promotion system, moving away from hiring on the basis of family or personal connections. The firm grew to over 350 employees by the end of the 1960s.
Also, under Perry, the firm began to establish a reputation as a leading source of equity research and investment analysis.
Acquisition by Union Bank of Switzerland
In November 1984, Union Bank of SwitzerlandUnion Bank of Switzerland
Union Bank of Switzerland was a large integrated financial services company located in Switzerland. The bank, which at the time was the second largest bank in Switzerland, merged with Swiss Bank Corporation in 1998, to become UBS to form what was then the largest bank in Europe and the second...
, predecessor of today's UBS acquired a 29.9% minority interest in Phillips & Drew and two years later announced an acquisition of the firm. At the time of the acquisition, Phillips & Drew, with 60 partners and 593 staff, was the leading dealer of gilts
Gilts
Gilts are bonds issued by certain national governments. The term is of British origin, and originally referred to the debt securities issued by the Bank of England, which had a gilt edge. Hence, they are called gilt-edged securities, or gilts for short. The term is also sometimes used in Ireland...
, convertible bond
Convertible bond
In finance, a convertible note is a type of bond that the holder can convert into shares of common stock in the issuing company or cash of equal value, at an agreed-upon price. It is a hybrid security with debt- and equity-like features...
s and other fixed income securities in the U.K. The firm was also a leading asset manager.
UBS initially had issues integrating Phillips & Drew, which it had renamed UBS Phillips & Drew. The firm lost £15 million when a rush of orders overwhelmed the firm’s settlement system in 1987. Then the bank lost £48 million as a result of Philips & Drew positions in the October 1987 stock market crash. Between April 1987 and February 1988, UBS was required to spend as much as £115 million to shore up Phillips & Drew. Phillips & Drew unit returned to profitability in 1992 after years of losses. Due to its performance issues, the Phillips & Drew name was discontinued by 1992 and the business was renamed UBS Limited. However, the Phillips & Drew name was retained in the asset management business that became known as Phillips & Drew Fund Management.