M&A: Deutsche disposal 'better late than never'
Deutsche Bank's disposal of its UK asset management business (DeAM UK) and Philadelphia-based active fixed-income business to Aberdeen Asset Management will be a great relief to the bank's senior board members. The UK unit has been in dire straits in the past two years, haemorrhaging staff and losing a series of pension fund mandates. In 2004 alone, the businesses sold made losses of £77 million ($135 million).
Last September, DeAM UK CEO Paul Berriman vehemently denied rumours of a withdrawal, stating: "The UK institutional investment market is the largest in Europe – no fund management firm could afford not to have an operation in the UK." For Deutsche Bank, it has been a case of quite the opposite. It simply could not afford to continue operating in the UK asset management space.
While other fund managers had responded to investors demand for specialist managers, Deutsche had dragged its feet, implementing a shift to a boutique structure only in the middle of last year. Some analysts claim that the move to sell was late in coming. Rumours of a potential sale had started in 2002 when Paul Manduca was appointed as European CEO. He joined from Rothschild Asset Management where he had orchestrated the sale of the business to HBOS.