NEW YORK — More than two years after Deutsche Asset Management acquired Scudder Investments, the combined firm still faces a clash of cultures that has led to a continuing exodus of Scudder executives and staffers.
The resulting turmoil has hurt performance, and led to client defections and net outflows.
"There is still a lot of dissension between the cultures, and people who came from Scudder are still leaving," said Robert Warren, chief executive officer at Warren International, a New York-based executive search firm. "Scudder was in the retail, institutional and high-net-worth business, and there is still a good chance that people from all three areas will leave because the cultures are so dissimilar."
Another headhunter who requested anonymity explained that many at the firm were pushed out after William Shiebler was hired in March 2002 as chief executive officer for DeAM-Americas to integrate Scudder. Mr. Shiebler, who had been president and CEO at Putnam Mutual Funds, a unit of Putnam Investments, Boston, brought in his own team of people to help restructure the business.
But others left because of the firm's switch to a more regional, rather than global, strategy or because they believed there was no longer an opportunity for advancement.
"The pace (of departures) has slowed, but the number of departures after the merger has been far larger than usual, and some people still want to get out," the headhunter noted. "I've never seen such a mass exodus. They lost a lot of star managers and many talented marketers and client service people to other firms."
Among the stars who left in the last year alone:
c William Holzer, who headed a highly regarded Scudder global equity team that departed with him to Lazard Asset Management, New York, along with an estimated $2 billion in assets. Mr. Warren said that Deutsche had split up the Holzer team — Nicholas Bratt, Andrew Norris and Irene Chang — who were reunited at Lazard. Mr. Holzer did not return calls seeking comments.
• Richard M. Goldman, head of Deutsche's Americas institutional business, who became president and chief executive officer at Forstmann-Leff Associates LLC, New York.
• David Baldt, a star DeAM fixed-income manager who went to Schroder Investment Management, New York, where he manages the municipal bond team. Mr. Baldt, who is said to have taken close to $6 billion in assets over to Schroder, did not return calls.
• Joshua Feuerman, former Deutsche head of quantitative equities, who left to start a hedge fund, BTN Partners, Greenwich, Conn. He did not return calls.
• Jeffrey Ulness, co-head of DeAM's financial institutions group, who was recruited by Mr. Goldman to join Forstmann-Leff as director of business development.
• Larry Abele, managing director of quantitative strategies, who left to form his own hedge fund company.
Former senior Deutsche executives who asked not to be identified said the departures are continuing and that they hear regularly from people who are still at the firm but would leave in a heartbeat for the right job.
But Mr. Shiebler said many who left did not depart of their own accord. "We've been upgrading the staff, putting muscle behind the best people to get rid of duplication," he said.