Deutsche poaches Manduca from Rothschild

Deutsche Bank yesterday poached the chief executive of Rothschild Asset Management, Paul Manduca, to head up its European fund management business.

The move comes only a week after the Rothschild group, in effect, put RAM up for sale. A statement from the family-owned banking group last week said it was "examining various options" for the future of the fund manager it set up three years ago. Mr Manduca, who is staying with RAM until December, yesterday confirmed this included looking at a sale.

Mr Manduca will join as chief executive of the European arm of Deutsche Asset Management. He replaces Udo Behrenwaldt, who will become vice chairman of the division. The company manages about £503m of funds for both institutional and retail investors, about half of which are run from continental Europe.

Mr Manduca was brought in to run RAM and is well regarded as a top-performing fund manager. He oversaw the inflow of £10bn of funds into RAM.

The Rothschild group wants to pull the plug on its retail and institutional fund management arms to concentrate instead on the higher-margin areas of private banking and wealth management.

The decision comes only a year after RAM relaunched its retail funds under the Five Arrows brand and staged the first national advertising campaign in its 200-year history.

"Rothschild hid behind the Five Arrows brand and has now strangled it at birth," Jason Hollands, deputy managing director at BestInvest, said.

Finding a buyer for the fund manager is thought likely to be difficult in current market conditions and Mr Manduca's departure was widely anticipated.

Investment professionals are seeing his appointment as a coup for DeAM. While it dominates the German market for retail investing, DeAM has been keen to gain a foothold in the UK and has been steadily increasing its advertising spend and sales team.

"Mr Manduca has built himself a very good reputation as a chief investment officer," Mark Dampier, head of research at Hargreaves Lansdown, said. "DeAM has been very keen to build its presence in the UK, and is one of the few companies to be spending money on advertising and marketing. It has big ambitions in the UK and Manduca is a name investors know, which will help them."

Mr Manduca is a former chief executive of Threadneedle Asset Management, and oversaw its acquisition by Zurich Financial Services in 1998. He then became head of Scudder Europe, part of Zurich's US-based fund manager Scudder. He is also a former chairman of the Association of Investment Trust Companies.

"I am pleased to be joining Deutsche at such an exciting time for the company. The opportunities to continue to grow both the retail and institutional businesses across Europe over the next few years are exceptional," Mr Manduca said.