Exiled in London, after a period of operating an independent factoring business, Grunfeld joined forces with Siegmund Warburg in the New Trading Company, which was established to help refugees from Europe extract their money from their native country and invest it safely. After the outbreak of war, Grunfeld successfully avoided internment as an enemy alien by leaving his home every morning at 7am and walking around Hyde Park—it was thought that the police typically made their arrests between 8am and 9am. He was exempted from internment as an enemy alien in October 1939 and became a British subject in 1946. The New Trading Company was renamed as S.G. Warburg & Co. in 1946 and Grunfeld and Warburg developed its merchant banking business among emigrants to London, and in Germany. S.G. Warburg rose to international prominence after it pioneered the hostile takeover in the UK with the acquisition of British Aluminium by Reynolds and Tube Investments in 1959. The firm grew rapidly after it developed the Eurobond market after 1963, the initial security being a £10 million loan to the Italian toll-road builder Autostrade Italiane. Grunfeld was especially active with clients in the newspaper industry and in the establishment of commercial television in the UK. He pioneered the reverse takeover in a transaction for Lord Thomson. From 3 employees in 1937, S.G. Warburg had 15,000 employees in 40 countries and had half of the FTSE 100 largest UK companies among its clients at the time of its acquisition by Swiss Bank Corporation in 1995. Grunfeld had taken over chairmanship of the firm in 1964 and held it for 10 years. He remained active in the firm until his death in 1999, aged 95. He rarely gave interviews but in 1987 publicly warned that derivatives could be the cause of a future financial crisis. At S.G. Warburg, Grunfeld pioneered the use of graphology as an employee selection tool in the UK. Outside the firm, he was an unofficial adviser to Harold Wilson's government. Following his death the Henry Grunfeld Chaired Professorship in Investment Banking was established at INSEAD, the European business school, currently occupied by Gabriel Hawawini, and the Henry Grunfeld Foundation was established at The London Institute of Banking & Finance.