Siegmund George Warburg -- the Banking Jew that Hitler Kicked Out of Germany

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Siegmund George Warburg


Siegmund George Warburg (30 September 1902 – 22 October 1982) was a member of the prominent Jewish-German-American-British Warburg family. He played a prominent role in the development of merchant banking.

Career

He was born in Tübingen, Germany, the only child of Georges Siegmund Warburg and Lucie.

Georges Siegmund Warburg and Lucie raised a young Siegmund Warburg on an estate in Swabia in South West Germany far away from the main branch of the family, which operated the second largest bank in Hamburg, up north. Siegmund had a sincere and deep affection for his mother who taught him to have a critical and inquisitive mind.

Because of Siegmund's Jewish ancestry, he was forced to flee the National Socialist regime of Adolf Hitler and moved to the United Kingdom where he founded S. G. Warburg & Co. in 1946.

In the United Kingdom, Siegmund was considered an 'upstart' to the establishment in the City of London. His most famous achievement was the establishment of the EuroBond market. He firmly believed that financial integration of Europe was an essential and natural step in the development of the European economy.

The firm that he created, S.G. Warburg & Co. was a major British investment bank (merchant bank at the time), and Siegmund was the bank's managing director until the 1970s - when although he officially had retired and was living in Switzerland, still retained a personal secretary to draft correspondence and assist with the operations of the firm. Control of the firm S.G. Warburg and Co. was retained through a family controlled holding company called 'Mercury Securities', where stock was allocated to S.G. Warburg & Co. partners as well as his Swedish wife and children.

The firm S.G. Warburg & Co. was acquired by UBS AG creating UBS Warburg, which then after a rebranding exercise was dropped, leaving only UBS AG.

He was also simultaneously a partner in the U.S. investment bank Kuhn, Loeb from 1953 until 1964 through a holding company to avoid the restrictions of the Glass–Steagall Act.

He died in London.

http://en.wikipedia.org/wiki/Siegmund_George_Warburg


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S. G. Warburg & Co.

Founding and early history

The bank was founded in 1946 by Siegmund Warburg, a member of the Warburg family, a prominent German-Jewish banking family and Henry Grunfeld, a former industrialist in the German steel industry. [1] Warburg and Grunfeld, who was also Jewish, had fled Nazi Germany in the 1930s. [1]

S.G. Warburg and Co. was recognized for its pioneering mergers and takeover work in the UK in the 1960s, including the first ever hostile takeover in the UK and the first ever Eurobond issue, which fostered the new Eurodollar market. A significant event in the firm's rise to prominence was the acquisition of Seligman Bros. in 1957; through this, Warburgs gained a place on the Accepting Houses Committee composed of the seventeen top merchant banks with access to cheap capital backed by the Bank of England.[2]

The period 1958/9 saw the Aluminium War when Tube Investments, advised by S. G. Warburg & Co, fought a fierce and ultimately successful battle to acquire British Aluminium.[1]

1960s, 1970s and 1980s

The bank gained clients and grew rapidly in the 1960s and 1970s, its strong work ethic and rigorous intellectual culture standing in stark contrast to the gentlemanly and clubbable milieu of the traditional City houses.

In the early 1970s, S.G. Warburg entered into a U.S. joint-venture with Paris-based Paribas (Compagnie Financi ere de Paris et des Pays-Bas, prior to the bank's nationalization in 1982) named Mercury Securities.[3][4] In 1974, S.G. Warburg and Paribas took a 40% interest in A.G. Becker & Co., a U.S. based brokerage. Although the joint-venture initially provided an international dimension for its three members, the relationships soured in the late 1970s and early 1980s.[5] The joint-venture was plagued by competition between Warburg and Paribas, as well as cultural conflicts between French, English and American executives. Although Warburg had originally planned to buy out Paribas, after Siegmund Warburg's death, Paribas bought out Warburg's interest in the joint venture in early 1983. Following the departure of Warburg from the joint venture, the firm was renamed A.G. Becker Paribas.[5] [6][7]

A major participant in the "Big Bang" reforms of the 1980s, the bank became the preeminent UK-based M&A adviser, equity underwriter, research house and (via its Mercury Asset Management subsidiary) asset manager by the early 1990s, employing some 6,000 people worldwide.

Purchase by Swiss Bank Corporation (1995)

Following another flawed and costly expansion into the US, in 1994 a merger was announced with Morgan Stanley, but the talks collapsed.[8]

The following year S.G. Warburg was purchased by Swiss Bank Corporation.[9] Swiss Bank Corporation merged S.G. Warburg with its own existing investment banking unit to create SBC Warburg, which became a leading player in global investment banking. [10] In 1997, SBC Warburg was merged with U.S. investment bank Dillon, Read & Co. to create Warburg Dillon Read.

After the merger of Swiss Bank Corporation and Union Bank of Switzerland in 1998, Warburg Dillon Read was renamed UBS Warburg. The Warburg name was finally retired in 2003 when the investment banking operation of UBS was renamed UBS Investment Bank.[11]

Notable current and former employees

Business

    Franck Petitgas, Global Co-Head of Investment Banking of Morgan Stanley
    Pedro Gomez de Baeza, Founder and President of GBS Finanzas
    Thomas Bscher, Former Managing Director of Bugatti Automobiles SAS
    Simon Cairns, 6th Earl Cairns, Managing Director 1979-1985
    Michael Cohrs, Head of Global Banking at Deutsche Bank
    John Cryan, Chief Financial Officer, UBS AG
    Sir Derek Higgs, Chairman of Alliance & Leicester
    Nicola Horlick, Founder of Bramdean Asset Management

[edit] Politics

    Peter Ainsworth, Former Shadow Environment Secretary
    Korn Chatikavanij, Finance Minister for Thailand
    William Hopper, Former Member of the European Parliament
    Earl Jellicoe, Former Lord Privy Seal
    Baroness Vadera, Minister jointly for the Department for Business, Innovation and Skills and the Cabinet Office
    David Freud, Shadow Minister for Welfare
    Robin Budenberg, Chief Executive, UK Financial Investments Ltd

Other

    Anthony Marreco, one of the founding Directors of Amnesty International

See also

    Dillon Read
    Warburg Dillon Read
    M.M.Warburg & CO

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UBS means RIP for Warburg

By Helen Dunne, Associate City Editor

12:01AM GMT 13 Nov 2002

Comments

Warburg, one of the most distinguished City names, is to disappear from the financial world after parent bank UBS elected to rebrand itself using just the three initials, which stand for absolutely nothing.

It also comes six weeks after a party to celebrate the birth of Sir Siegmund Warburg, founder of the merchant bank, who is widely credited with transforming the City after the Second World War.

John Costas, chief executive of UBS Warburg, as it will continue to be known until the middle of next year, described it as "the right decision" to establish one brand "as a master brand".

Ironically, the master brand is meaningless. UBS, Switzerland's largest bank, was formed from a £37 billion merger between Union Bank of Switzerland and Swiss Bank Corporation, former parent of SG Warburg, four years ago.

It was intended to call the merged entity United Bank of Switzerland, but the architects of the deal forgot all about United Bank AG Zurich, a small private bank, which refused to sell its name. Consequently, it became UBS.

Mr Costas said that the research into rebranding began two years ago after UBS acquired Paine Webber, an American private client business whose name will also be lost in the move.

"We interviewed over 1,000 private clients in 40 countries, over 40 institutions and several hundred corporates," he said. "The research showed that one brand was a maximum value proposition."

UBS yesterday reported third-quarter net profits of Sfr942m (£410m), up 4pc on a year earlier but down 29pc on the previous quarter. The bank also warned that full-year results would not reach the levels of last year.

Mr Costas said that UBS Warburg would "pay best performers well" but added that he would expect annual bonuses to suffer a "double digit decline" this year.

http://www.telegraph.co.uk/finance/2833 ... rburg.html


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Malcolm Moore on the City's tribute to Sir    Siegmund Warburg  

Luminaries from the City of London will gather this evening to mark the centenary of one of London's most famous bankers.

Sir Siegmund Warburg, who died in 1982, is widely credited with having transformed the City after the Second World War. He was described by James Wolfensohn, president of the World Bank, as "the new global banker for modern times".

Mr Wolfensohn will be speaking at the centenary dinner, as will the Lord Roll of Ipsden, Sir David Scholey and Marcel Ospel, chairman of UBS AG.

Sir Siegmund founded SG Warburg merchant bank with Henry Grunfeld in 1946. The bank became Britain's top investment bank in just under 50 years before it was swallowed up by the Swiss Bank Corporation in 1995.

Sir Siegmund was most famous for having initiated the first hostile takeover bid, when he masterminded the acquisition of the British Aluminium Company in 1958. He is also credited with the invention of the Eurobond market.

He arrived in Britain in 1934, realising there could be little hope for a happy union between the Nazi regime and the German Jewish banking community.

In his 1962 book, Anatomy of Britain, Anthony Sampson wrote that Sir Siegmund was "the most spectacular newcomer" to the merchant banking community in London, one of "a small band of strangers with very little to lose and a lot to gain".

Later, when asked for the secret of his success in London, Sir Siegmund answered: "I felt that I'd brought something to England which was a little bit different because I was a damned foreigner, a German Jew. I like to be a nonconformist, and I thought I could contribute something quite different from the others."

Differences in his approach included the hiring of a Swiss graphologist, Theodora Dreifuss, to analyse the handwriting of prospective employees. SG Warburg gained a reputation as a bank that hired on the basis of intelligence and aptitude, rather than background. At interviews, there were no questions about which school the candidate had gone to.

Other innovations included two lunch sittings at the bank, in order to conduct more client business, both of which went without wine, almost unheard of in the days of lavish lunches in the City.

The rise of Warburgs under Sir Siegmund's guidance eventually led to his knighthood in 1966. But in recent years another picture has emerged. In his biography, The Warburgs, Ron Chernow says: "Sir Siegmund Warburg was a very complicated human being. Almost anything you could say about him, you could also say the reverse."

Chernow, who had the full co-operation of the Warburg family and top executives in the bank, relates that Sir Seigmund was "completely egocentric and fundamentally conceited", with a "volcanic temper". After discovering an error, he is reported to have screamed: "We're not a second-rate firm. We're not a third-rate firm. We're a 10th-rate firm."

It is also unlikely that Sir Siegmund would be thrilled by the current face of banking in London, including the make-up of UBS Warburg. Even when SG Warburg had a staff of 650 in 1980, he complained: "What worries me, very much quite frankly, is that we are already getting too big on both sides of the Atlantic."

UBS Warburg currently has roughly 17,000 employees globally.

Sir Siegmund may have revitalised the stuffiness of the City in the post-war era but he was concerned that banks increasingly tended to overlook "the human factor".

Worrying about a City dominated by American houses, he said: "They put too much emphasis on measuring, almost from month to month, what a specific partner produces. I don't even like the way they pronounce the word - not produce but 'prodooce'.

"All this emphasis on producing - that is all right for a cow, but not for a human being."  

http://www.telegraph.co.uk/finance/2774 ... anker.html