Buccaneering bank founded by Jewish refugee from Nazi Germany

SG Warburg was founded in 1945 by Siegmund Warburg and his partner, Henry Grunfeld. Warburg, part of a Hamburg banking family, was a Jewish refugee from Nazi Germany and trained at Rothschild. He liked to choose recruits by studying their handwriting.

The bank made its name as a buccaneering operation willing to take risks on behalf of its clients when in 1961 it masterminded the British takeover of British Aluminium by Alcan of Canada. It was also a pioneer of the fledgling but fast-growing Eurobond market in dollars held outside the US.

In the next 30 years Warburg was responsible for kicking over the traces on many occasions, challenging the authority of the City Takeover Panel, which was set up to police precisely the sort of rule-bending activities Warburg specialised in.

When the Thatcher government forced the London Stock Exchange to open itself up to foreign competition, Warburg was widely tipped to become a global player in the financial game.

In 1986, at the height of the Big Bang reforms of the London Stock Exchange, Warburg's chairman, Sir David Scholey, said: "I do not think we have any sensible alternative to being a global investment dealer. As far as we are concerned, it is a question of being active in all the key markets, as well as the related markets like Zurich, Geneva and Hong Kong."

But that proved too difficult to achieve. Although Warburg bought one of the Stock Exchange's major brokers, Rowe & Pitman, and one of its top market-making firms, Akroyd & Smithers, and built up a staff of more than 500 in New York, it was unable to challenge the giant American banks – or their European counterparts.

During 1994 Warburg's reputation was severely damaged by losses on bond trading and its role in advising Enterprise Oil on an abortive bid for Lasmo, another oil company.

In December 1994 Warburg was forced to announce that it was in merger talks with Morgan Stanley, leading to a dramatic loss of confidence.

In February 1995 Lord Cairns, Warburg's chief executive, resigned after a wave of staff defections because the bank's future was so doubtful.

In May 1995 Warburg succumbed to an £860m takeover by Swiss Bank Corporation, later itself taken over by Union Bank of Switzerland to form United Bank of Switzerland, or UBS, under Marcel Ospel. Warburg's fund management arm, Mercury Asset Management, remained independent until 1998, when it was bought by Merrill Lynch, the US stockbroker, for £3bn. It is now known as Merrill Lynch Investment Management.