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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.

Currency
management under the microscope Many
super funds have taken a battering from the volatility of the Australian dollar
in the past 12 months, with the decision to hedge or not having a major impact
on portfolio returns. Funds have also been undecided as to whether to employ
active or passive management of currency and have been concerned about possible
counterparty risks in their foreign exchange transactions.

Against this
backdrop, National Australia Bank is holding a major one day seminar in Melbourne on August 27 to
look at these and other aspects of foreign exchange from an investor’s point of
view. The seminar speakers include asset consultants, fund executives and fund managers
as well as currency experts. Attendance is by invitation only.

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