Analysts have warned that Dillon Read Capital Management, the hedge fund set up by John Costas at UBS, may have difficulties raising new money following underperformance in the third quarter.

Merrill Lynch analysts Jacques-Henri Gaulard and Derek de Vries estimate Dillon Read had a negative impact on UBS asset management's pre-tax profits of Sfr40m (€25m) in the last quarter because investment performance did not warrant performance fees.