Deutsche Asset & Wealth Management executives have been on a global recruiting spree as they seek to rebuild institutional assets and accommodate a growing demand among U.S. institutional clients for alternative investments and smart beta.
The need to grow assets under management is obvious: Data from Pensions & Investments show Deutsche's U.S. institutional tax-exempt AUM plummeted nearly 70% to $15.68 billion at year-end 2013 from its post-crisis peak of $51.75 billion at year-end 2009.
In addition, Marietta, Ga.-based eVestment LLC lists 27 senior executives as having resigned from the firm globally from 2011 through 2013. Among the senior executives was Kevin E. Parker, managing director and global head of what was then called Deutsche Asset Management, who left in 2012 and is now CEO of Sustainable Insight Capital Management LLP, New York.
The data provider also listed 53 portfolio managers and 66 analysts globally as having left in that period. No information was available on how many left voluntarily and how many were terminated. Some 40 of the portfolio managers and 50 of the analysts were replaced through 2013.
Some of the employee and asset drop can be attributed to the 2010 spinoff of Deutsche's quantitative equity business to QS Investors LLC, which took $11 billion in total assets and 40 employees.
In 2012, parent Deutsche Bank tried to sell its entire asset management business — then later that year just its real estate and infrastructure business, RREEF — to New York-based Guggenheim Partners. After both sets of negotiations fell through, senior executives at RREEF, including managing directors Neil Thassim, head of real estate in Asia, and David R. Maki, head of North American capital markets, jumped ship.
Although sources are divided on how serious company executives are about rebuilding the asset management business, Jerry W. Miller, managing director and head of DeAWM Americas, said Deutsche officials are “100% committed to being among the fastest growers in the U.S. institutional space.”
“In the Americas, we think we're uniquely positioned to deliver solutions to where the market is going, whether in alternatives, smarter beta solutions, risk factors or outcome-oriented products,” Mr. Miller said.
Data from eVestment show that of DeAWM's 64 strategies, 31 are fixed income, 31 are equity, one is real estate and one is balanced/ multiasset.