GLOBAL - Commerzbank, the embattled German financial services firm, is taking drastic action in light of what it calls "last year's unacceptable results", action that includes a dramatic retreat from most asset management regions.
Commerzbank’s decision - announced by Klaus-Peter Müller, chairman of the firm’s board of managing directors - will see the firm sell off the majority of its fund management operations, retreating to just the German and selected core European markets. Using the rationale “shrink to grow“, Commerzbank will also undertake a widescale reorganisation of its remaining fund management activities.
The major casualties in the Commerzbank cull will be Jupiter Asset Management - the UK fund manager it bought for £670m five years ago - and the San Francisco-based subsidiary Montgomery Asset Management. Müller said that Jupiter would definitely be sold, whilst the firm is currently “seeking solutions” to the Montgomery question.
Another fund manager which faces an uncertain future is Commerzbank Asset Management Italia, which is still in its start-up phase. Commerzbank claims that it is also seeking a solution to the problem of the Italian unit, whilst it will completely withdraw from the Asian market.
Müller unveiled the bank’s five point plan for asset management yesterday, a plan which will see all of its German pensions and investments divisions merged into a single entity. Retail division ADIG, Commerzinvest - which offers non-publicly-offered funds - and Commerz Asset Managers will be distilled into one Frankfurt-based firm, Cominvest.
Other measures will see the firm’s product range streamlined, a focus on winning institutional customers and development of new product lines.
Another change in the asset management strategy will see Commerzbank focus on fund-of-funds offerings in both institutional and retail arenas. Müller claims that in future, a multi-manager firm will be responsible for the necessary selection of funds. This approach, he claims, will enable the firm to continue to develop its retail funds-of-funds products and to assemble the funds of external providers individually for its institutional clients.
By Geoffrey Ho
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