Sibling rivalry that keeps Deutsche chief on his mettle

Business Profile: Paul Manduca, new head of the German bank's fund management arm, aims to grow UK market share

Paul Manduca, the new chief executive of Deutsche Asset Management, comes from one of those high-achieving families. He is one of four brothers, all of whom have top jobs in the City. One is head of small-cap stocks at UBS, another is a corporate litigation lawyer while the third is a hedge fund manager. Mr Manduca's wife is an ophthalmologist on London's Harley Street while his father ran his own security business which he sold to Securicor in the 1960s. Talking to him, you feel a bit of a dullard that you're not a qualified rocket scientist, or similar.

"I think it's just an accident," he says when asked whether it is just a coincidence that all four siblings have ended up in the Square Mile. "People do what they're good at, though I suppose my father was quite demanding and we were quite a competitive family."

He continues: "In my school days [at Harrow] I thought I was going to go into the Foreign Office but I was strongly advised by a friend of my father that while the diplomatic service might have been a good idea 50 years ago, I might find myself checking passports in a consul's office somewhere.

"At university [he studied modern languages at Oxford] I realised that I'd been looking at the stock market pages of the papers for quite some time. Suddenly it became clear to me that I was going to go into the City, though of course, as a student, you don't know a lot about the way it works."

Short and stocky with jet black hair which must stem from his Maltese roots, Mr Manduca speaks in a precise, clipped manner.

Given his fondness for precision, it is perhaps no surprise that one of his hobbies is collecting antique watches. "I'm interested in antiques, mainly pieces for my house which is an 1820s house [in Knightsbridge]. But I do like antique watches. People will pay a lot of money for a new watch, but they often forget that you can pick up watches for a fraction of the price at auction."

Mr Manduca is two months into the job as head of Deutsche Asset Managements' European division, having joined after a three-year stint at Rothschilds. He left there after the blue-blooded bank decided that private banking was its forte and that it didn't really want to push financial products at hoi polloi.

His brief at his new home is to make a big name even bigger. Worldwide, Deutsche has nearly $800bn (£500bn) under management, ranking it in the very top tier of global fund managers. But in the UK Deutsche is rather puny in mutual funds, languishing outside the top 20 with just £2.3bn under management.

"Under the DWS name we have a 25 per cent market share in German mutual funds," Mr Manduca says. "We launched the DWS brand here in September and obviously we're very keen to build the UK business and appeal to retail investors. We would expect to be no less than fourth in any of the markets in which we operate."

So far the DWS has made sales of £100m in the UK since its launch and there will be a concerted push into products such as ISAs. "We're not a big ISA provider but there's no reason why we shouldn't be in the future," he says.

He adds that, in any event, such products will be a hard sell this year, due to the parlous state of the markets. "The ISA season is likely to be disappointing and that's really the disillusionment that people feel about what's happened. Our job as investment managers is to provide the right vehicle for savers in these times. There is a move towards income and safety," he says.

As a veteran of 30 years in the City, which has seen a long stint at Touche Remnant, the founding of Threadneedle Asset Management and the spell at Rothschilds, Mr Manduca is sanguine about the current market slump. "Usually every 10 to 15 years you get this kind of crisis in the investment industry. We can go back to the crash in '87 and another 13 years before then to '73-74. In between you get these memory lapses and you have a boom which leads to a setback. In the long term share prices will go up but in this deflationary environment they are just not likely to go up quite as fast."

He says the problems go beyond the looming war with Iraq. "The war is creating uncertainty and has provided the perfect excuse for sellers to absent themselves from the market. Afterwards there may be a relief rally though it is very difficult to forecast profits which will act as a drag. In the short term, though, the markets look oversold."

He is also pragmatic about the impact of the Higgs review on non-executive directors. "The main debating point is how the chairman will work with the designated senior non-executive director. But I think this can work well if it's seen as an emergency line rather than something that gets in the way of the chairman. If the personalities are wrong it could be divisive and split the board."

Mr Manduca has had fall-outs himself in the past, one of which led to him leaving Threadneedle, the firm he founded in 1994 after its takeover by Zurich. Indeed some have speculated whether he would "do a John Duffield" and set up his own boutique. "Actually I'm more corporate though I do think there is room in most corporates for entrepreneurialism," he explains.

In his spare time Mr Manduca is a keen golfer and plays off 14 at Wentworth and St George's Hill in Surrey. He is also a non-executive director of Wolverhampton Wanderers Football Club. "I've known the Hayward family [the controlling shareholders] for a long time. You could say I'm not doing a very good job but they are currently in the play-off zone [in Nationwide Division One]," he says.

Longer term, Mr Manduca is not ruling out acquisitions – some have even speculated that he may go shopping for Threadneedle, which is now up for sale. But Mr Manduca says organic growth is the priority.

In the meantime, he plans to have some fun, though he seems slightly wistful for the old days of the City when a bankers' word was his bond and a decent lunch was an all-dayer. "There was more time for enjoyment 20 years ago but then the corollary of harder work is that wages and bonuses have gone up," Mr Manduca says. "And if you're well paid, who says you should have fun?"

PAUL MANDUCA AN ASSET TO HAVE AROUND

Title: Chief executive, Deutsche Asset Management, Europe

Age: 51

Pay: Undisclosed

Education: Harrow, Oxford University (modern languages)

Career: 1973 Colegave graduate trainee; 1975-9 Rowe & Pitman, 1979-83 Hill Samuel, 1983-94 Touche Remnant (taken over by Henderson in 1994, 1994-99 Threadneedle Asset Management, 1999-2002 Rothschild Asset Management

Interests: Golf, skiing, shooting, holidays at his home in France. Wolverhampton FC, where he is a non-exec