DeAM unfazed by E4.3bn UK mandate losses

EUROPE – Deutsche Asset Management has said a total of three billion pounds (4.3 billion euros) in recent pension fund mandate losses is not such a “big shock”.

“The reductions have taken place over the last few months, so it wasn’t like a big shock to us,” a DeAM spokesman said, confirming reports that the firm has lost mandates worth around three billion pounds from five UK funds.

DeAM has been hit by the departure of a series of high-profile executives and late last month named Kevin Parker as the member of its executive committee with responsibility for asset management, replacing Tom Hughes who is taking a leave of absence.
According to reports, 1.7 billion pounds of the three billion pounds was related to a decision by Prudential’s pension fund to sever its links with the asset manager.

The reports also said that the Railways Pension Scheme (Railpen), one of the UK’s biggest, had slashed DeAM’s mandate to manage equities to 700 million pounds from 1.7 billion pounds previously.

And three other pension fund clients, including Whitbread, Weetabix and Somerfield, had pulled another three billion euros in business away from DeAM last month, the reports stated.

A DeAM spokesman in London told IPE that while the reports were basically accurate, they gave the wrong impression that all this happened overnight.

The spokesman also said that while it was unfortunate that Railpen had reduced its investment mandate by one billion pounds, “DeAM was pleased to still be entrusted with a significant amount of assets.”

Regarding the loss of Prudential’s pension fund, sources close to DeAM said it was not really a blow to the asset manager, “as the mandate was not that profitable to begin with”.

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