FRANKFURT -- The future of Dresdner Asset Management, which incorporates Dresdner RCM, is at stake as potential bidders line up for parent Dresdner Bank AG following the collapse earlier this month of its merger with Deutsche Bank AG.
Rival German fund managers said the collapse of the deal and the departure of Dresdner Chairman Bernhard Walter had left the bank and its constituent businesses in a strategic and leadership vacuum. They advised the remaining board members to move quickly to outline clear plans for the bank's future.
And as Pensions & Investments went to press, speculation was mounting that Dresdner Kleinwort Benson would be spun off from its parent following the sudden departure of Gerd H"usler, chairman of the management board of DKB. Leonhard Fischer, previously head of asset management for Dresdner Bank, will replace Mr. Hausler.
Meanwhile Jo"chim Madler, head of institutional asset management, will assume Mr. Fischer's reponsibilities for asset management on the board of managing directors.
One Frankfurt-based source said, "Dresdner's days as an independent are numbered."
Sources said the options facing the bank are:
* Key stakeholder Allianz AG, Munich, Germany, could sell its entire 21.7% share in Dresdner.
* Allianz could push for splitting up the bank by backing a sale of businesses such as Dresdner Asset Management and Dresdner Kleinwort Benson.
* Dresdner could merge with a domestic bank to streamline the retail banking operations but leave the asset management and investment banking unchanged.
Allianz Chairman Henning Schulte-Noelle has said in published reports that the insurer would listen to any potential bidders.
Hard work ahead
Dresdner Asset Management now will have to work hard to retain its existing E257 billion ($249.5 billion) in assets under management. One Germany-based consultant said he would not be recommending the firm for manager hires until there was certainty over its future.
Dresdner RCM insiders said it was "business as usual" after the deal between the two Frankfurt-based banks was called off. One London-based source at Dresdner RCM said staff in the asset management division had not felt threatened by the deal as there had been no clear indication how the asset management businesses were to be merged.
By early April, the heads of Deutsche and Dresdner's asset management businesses had begun meeting in San Francisco and Frankfurt to discuss the merger. But the talks had gone little further than basic introductions by the time the deal collapsed, said the source.
Michael Korn, global head of institutional business for Dresdner Asset Management and recently appointed head of the management board for Dresdnerbank Investment Management KAG, said Dresdner is continuing to integrate the German domestic business with Dresdner RCM's global investment platform.
"After the threat of the merger, we feel very much encouraged in speeding up the integration of the business with San Francisco to strengthen the overall capacity of Dresdner Asset Management and our global credibility with clients," he said. The threat of the merger had added urgency to the integration process.
He said he had not been approached by any potential buyers for the asset management business.
Dresdner had been looking for strategic alliances in asset management, administration and retail banking for more than a year and might not survive by trying to go it alone, said a German money manager at a rival international bank.
Focus on asset management
A non-German bidder would be more interested in the asset management and investment banking business than in the "bricks and mortar" of retail banking, and would likely push for the retail banking operations to be sold separately, said a German consultant.
A German merger candidate such as HypoVereinsbank AG, which held unsuccessful merger talks with Dresdner last year, would be an ideal candidate for streamlining the retail banking business, according to sources.
Commerzbank AG, Frankfurt, Germany, also is known to be interested in Dresdner's retail business.
Sources said other potential bidders for the bank included ABN Amro Bank NV, Amsterdam; ING Group, Amsterdam; Dresdner's French partner BNP Paribas, Paris; Citigroup Inc., New York; and possibly Chase Manhattan Corp., New York, although Chase was busy with the acquisition of Robert Fleming Holdings Ltd., London.
Bank of America Corporation, New York; Chase Manhattan; Donaldson, Lufkin & Jenrette, Inc., New York; and Lehman Brothers, New York also were mentioned as having a particular interest in acquiring Dresdner's investment banking arm.
But it is unclear whether Dresdner would be sold as a whole or spun off into separate businesses.