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Ironbark Asset Management, the retail distribution business which has just been formed by 14 former Deutsche Asset Management (DeAM) employees, is on the hunt for alpha generators with whom it will launch its own funds. The former head of retail distribution at DeAM, Chris Larsen, said he was looking forward to running a business for the first time, alongside cofounder Brendan Carpenter, a former chief operating officer at DeAM who crossed to Aberdeen when it purchased the German banks’ equity and fixed income businesses in 2007.

DeAM has granted distribution rights for its entire Australian retail product range to Ironbark, and although it will pay no salaries to Larsen and team, they do get a cut of ongoing revenue from product they sold while at DeAM, and a share of revenue from future sales – speculated to be about one-third. Larsen said the business would be wholly staff-owned, and staff had already raised capital for start-up costs.

The Ironbark team has been allowed to stay at Deutsche Bank’s Sydney headquarters for a couple of months, but will move into its own office after that. All other marketing expenses will be covered entirely by Ironbark. On board with Larsen and Carpenter are BDMs including Catherine Franks, Andrew Davies, Winnie Kwok and (from Colonial First State) Alex Donald. Helen Constantinou will handle RFPs.

Spinning out Ironbark has been an “elegant solution” to DeAM’s wish to withdraw from retail investment distribution outside of Germany, according to a regional spokesperson, although this precise model ahs not yet been replicated in other territories. The responsible entity activities for the retail range – which include ‘thematic’ and ‘opportunity’ global equities funds, the Paladin LPT funds, a global agribusiness fund and hedge funds – have been outsourced to Wilson HTM, the integrated investment group in which Deutsche Bank has a 19.9 per cent holding.

A common assumption since the Ironbark deal was announced is that Larsen’s team will assist retail distribution for Wilson-owned boutique incubator Pinnacle Investment Partners, however this has been ruled out for now. Larsen said the manufacturers that Ironbark would seek to assist would have “multiple sources of alpha”, and offer strategies that were liquid and easy to understand. “You need to show how the product will perform in very different markets, and you don’t want to get too creative in leveraging and structuring,” he said.

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