Prudential sells off E20bn accounts
Prudential has announced it is to streamline its UK institutional fund management activities by selling off a portion to Deutsche Asset Management (DeAM).
Michael McLintock, chief executive at Prudential M&G Asset Management, comments: “Once we had taken a strategic decision to focus on areas where we have a competitive advantage, we concentrated on finding the best possible partner for all affected clients. We believe DeAM have the resources and commitment to make a great success of the role”.
The deal sees three of Prudential’s asset management team move to Deutsche – Mike Denham, currently head of institutional banking, Philip May and Chris Whitaker.
Prudential will now focus its asset management business on unit trusts, pooled life and pension funds and specialist bond fund management.
The company’s segregated, balanced and specialist equity mandates, managed for a range of institutional clients are valued at £12bn (E20bn) from the total Prudential group managed funds of £170bn.
The consideration for the transfer will be based on a combination of the value of funds taken on by DeAM as well as future revenues.
James Goulding, Chief Executive of DeAM’s UK Division, adds: “We are committed to growing our UK institutional business, and look forward to working with these clients.”
DeAM will firstly have to capture these clients and Prudential have officially notified all relevant parties of the move and served formal notice of termination of their mandates.
Denham and his team are now recommending the new DeAM management team.
One Prudential client noted that while Prudential had kept clients abreast of developments, there was no guarantee DeAM would have an easy task picking up all the business.
“I am not sure that DeAM would have been on our shortlist if we had been starting out afresh.” Kevin Hall