Deutsche Asset Management (Deutsche) has begun a concerted push to regain a presence in the retail market with the launch of a new fixed income product and a number of new hires for its adviser services team.
According to Chris Larsen, head of Deutsche adviser services, the Australian business has been the beneficiary of a decision made a year ago by the Deutsche global executive committee to expand its retail operations worldwide. “Deutsche is the eighth largest fund manager in Australia with over $34 billion under management but most of that is institutional – only about $3 billion is in retail,” Larsen said. As well as Larsen, who was hired over six months ago, Deutsche has signed on 11 senior members to its retail team over the last year including the recent appointment of Rebecca Jacques to head up its platform and researcher relationships for equity products. Jacques was formerly head of Assirt research sales and more recently associate director of hedge fund Vertex. Other recent appointments include key account managers Natalie Windsor, Licia Heath, Naomi Finnigan and Steven Bird as well as account executives Victoria Furlong and Geramae Godliano. The retail distribution business is not foreign to Deutsche, which sold its high net worth advisory business and master trust to National Australia Bank in early 2001 for over $110 million. The first challenge for the expanded Deutsche retail team will be to sell its new Monthly Income Plus product to the advisory market. Bill Bovington, Deutsche head of fixed income and deputy CIO, said the new fund, which launched yesterday, was designed to perform across all credit and economic cycles and has targeted a return of 2-2.5 per cent above the Australian Bank Bill Index. Bovington said the fund will invest in Australian corporate securities but will also diversify with allocations to Deutsche’s Global Credit Fund and its Global Alpha Fund. “This is a new generation of fixed income product that diversifies away from credit spread,” Bovington said. He said as well as active duration and currency management the new fund will also include the ability to short-sell its credit component. “That can protect the portfolio in a negative credit environment,” Bovington said. Larsen said the retail product will offer the option of a monthly cash distribution to provide “some certainty of income” to clients. Deutsche will also offer the fund to the institutional market under the Core Plus Fund label and benchmark it to the UBS Composite (All Maturities) Bond Index. According to Larsen, the Monthly Income Fund is the “first of the new regime” with the group also working on a number of alternative products which Andrew Davies, who joined Deutsche in April, will be responsible for distributing.
Since taking over the top job at the $44 billion Funds SA more than a year ago, chief executive John Piteo has ushered in an investment function overhaul and wrapped up an important stage of the fund’s five-year data transformation program. It pledges to recentre around investment performance and more efficient processes, as the “missing piece” has been found in incoming CIO Con Michalakis.
Darcy SongJanuary 10, 2025
