LONDON — What started in 2003 as a wave of U.S. client defections from Deutsche Asset Management has turned into a tsunami of further departures striking the company in the United Kingdom and Europe.
In the quarter ended Sept. 30, Deutsche Asset Management lost €11 billion ($14.3 billion) in worldwide assets, most of it from institutional clients. Officials wouldn't give a regional breakdown of assets under management and client outflows.
A statement from Deutsche said the losses "were largely in the U.K. institutional business" as a result of poor performance in U.K. and European equities, rapid turnover in senior staff and the trend for pension funds to move from balanced mandates — until recently Deutsche Asset's core business — toward specialist money managers.
Over the last six months, Deutsche Asset has lost 10 executives from its U.K. operation, including Chief Investment Officer Karl Sternberg, who left in July.
Recent U.K. client losses include:
• Orange Group, London, which terminated Deutsche Asset from a £20 million multiasset portfolio managed for the £135 million Orange Pension Scheme defined contribution plan;
• The £500 million London Borough of Lewisham Superannuation Fund, which earlier this month dropped DeAM from a balanced portfolio of undisclosed size;
• The £111 million Avon Cosmetics pension plan, Northampton, which dropped the firm from a balanced portfolio of undisclosed size; and
• The £1.8 billion Lothian Pension Fund, Edinburgh, which terminated DeAM for poor performance of a £170 million U.K. equity portfolio. Baillie Gifford & Co., Edinburgh, now runs the assets.