scudder purchase has paved way for more global sector based approach by combined group
Deutsche Asset Management is moving to a more global sector-based approach, in line with that of Scudder Investments, as it looks to incorporate its recent purchase's analyst team.
The group will also rebrand as DWS Investments in the second half of the year, before Oeicing its unit trust range and launching a range of new funds.
Following the purchase of Scudder from Zurich, equity research within the new combined group will now be organised on a global sector basis and be handled by 15 global sector teams spread around Deutsche and Scudder's worldwide offices.
Each sector team will run an in-house sector fund, each seeded with at least $100m of the group's own money. Bonus structures will be linked to the funds' performance as a staff incentive. Each sector team will work with 20 six-man portfolio selection teams, which will carry out portfolio construction.
Christophe Bernard, pan-European chief investment officer at Deutsche, said the portfolio selection teams will create model portfolios, the performance of which will also determine the size of the team's bonus, some 70% of which will depend on them outperforming their benchmark.
Bernard said: 'The construction job on the model portfolios is done by the portfolio selection teams, although the fund managers will not be obliged to follow the ratings of the portfolio selection teams.'
He added this would enable fund managers to add individual flair but the emphasis on a team approach is a deliberate means of minimising the cult of personality surrounding star managers.
US equities are to be run out of the US by the Scudder team, although AA-rated Deutsche American Growth fund manager, Charles Martyn-Hemphill, will remain named manager, working with the US-based analyst team and providing the desk with a face in the UK.
Deutsche's in-house US equities desks was disbanded at the turn of the year ahead of this, with about eight analysts leaving the group.
Deutsche has also built a global equity research platform to facilitate this. The technology, developed at an initial cost of £3m-£4m, will ensure that research is carried out and presented in a uniform basis and networked to all investment staff around the globe via their computers.
Neil Jones, managing director of Deutche's UK retail business, said some of the new funds will come from the in-house sector funds, while others will primarily aim at bolstering the group's income and fixed interest ranges.
The change in name to DWS, which stands for Die Wertpapier Spezialisten, will harmonise Deutsche's European and UK retail strategies and will be underpinned by a move to global sector desks as Scudder Investments is amalgamated into the group next month, when the purchase of Scudder is finally closed.
Plans to expand the group's retail fund range from 17 unit trusts to 25 over the next 18 to 24 months have also been announced and the existing unit trust range will be converted into Oeic sub-funds this year.
Jones conceded that despite its strength in the institutional sphere, where the name will remain, the Deutsche brand had failed to capture the imagination of the British public. This is reflected by the group's UK retail business accounting for only 2% of its UK assets under management, some £2bn, compared with £98bn in institutional funds.
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