Fitch rates DeAM ‘Highest Standards
Fitch Ratings has given Deutsche Asset Management Investmentgesellschaft (DeAM) its ‘Highest Standards’ rating in its latest review of the Frankfurt based business.
The company was previously rated under the brand name DB Advisors and included Deutsche Asset Management International. The rating covers DeAM, which provides the legal framework for managing Spezialfonds and Deutsche Asset Management International, which provides advisory and management services for foreign segregated accounts. At the end of the first quarter of 2013, DeAM had assets of €112bn, with some 179 staff.
Fitch said its rating recognised the track record in institutional fund management, strong domestic market position, and renewed commitment from key shareholder Deutsche Bank.
DeAM further enjoys experienced local senior management and “broadly stable investment staff”.
“The rating is further supported by the firm’s solid risk and control framework and efficient operations backed by a modern IT platform. Investment processes are strengthened and integration enforced by stronger incorporation of top-down views from the global CIO Office,” Fitch said.
Key challenges to the business include the increasing propensity of institutional investors to review their mandates. Maintaining staff stability in the face of an increasingly integrated global management framework is another, Fitch said.
Asset management businesses are rated ‘Good Standards’, ‘High Standards’ or ‘Highest Standards’ in Fitch’s scale. Those that are rated ‘Highest Standars’ “demonstrate an operational framework that Fitch considers superior relative to international institutional standards.”
Looking forward, Fitch said the commitment of parent Deutsche Bank was important, particularly given the failure to agree a disposal of the asset management business in mid-2012.
Some changes are still to be expected, and Fitch said that this could lead to relocations or “moderate fluctuation” in terms of areas such as wealth management.
DeAM is reliant on State Street Bank and Trust Company for its back office and custody services, but said that the reporting scope and quality represented “best practise” in the institutional sector. The front office serves to enable a scalable global business, supported by DeAM’s proprietary Orchestra portfolio analytics application, which is used together with Barclays POINT or Barra.