Deutsche Bank plans to escalate its effort in retail investments and private banking in the United States from its beachhead in New York.
The Frankfurt-based powerhouse seeks approval to register nine mutual funds with the Securities and Exchange Commission.
In an application filed June 2, the $570 billion-asset bank laid out plans for Deutsche Family of Funds Inc.. The offerrings would be distributed by Pittsburgh-based Federated Investors for its own clients and those of other money managers.
Private bankers in New York have been talking for months about Deutsche Bank's search to hire a chairman for Deutsche Bank Trust Co., its American private-banking arm, which manages approximately $4.8 billion of assets. The new position will have overall responsibility for the unit, leaving specialty areas to senior management.
The moves come while other European banks are expanding into the U.S. asset management business by acquiring money management firms. But Deutsche may not need to buy somebody else's strength, observers say.
"Their really focusing on the name of Deutsche and its reputation internationally," said Charles B. Wendel, president of Financial Institutions Consulting, New York.
"They've made a commitment to the U.S. market that is long-term," he said. "They've taken a competitive stance in the hiring they're doing, the deals they're doing, and they are aggressive on pricing."
The management of Deutsche Bank Trust, which started three years ago, has lofty aspirations. Chairman Henry S. Ziegler said in an interview a year ago that he anticipates the company will manage $10 billion of assets by 2000. The bank targets individuals with $20 million or more in investable assets.
Investment of private client assets are overseen by managing director Richard Stamberger, and chief operating officer Douglas H. Lemmonds heads credit for clients with nonliquid assets.
The proposed mutual funds-European Mid-Cap, German Equity, Japanese Equity, Global Bond, German Bond, and four regional equity funds-would tap into existing portfolios managed by DWS Deutsche Gesellschaft fuer Wertpapiersparen, an affiliated investment subsidiary in Germany. They carry a minimum investment of $5,000.
If the plan is approved, Deutsche would join the ranks of European banks with U.S. mutual funds. Swiss Bank Corp.'s SwissKey funds family was launched 14 months ago and has $115 million of assets under management. Account sizes typically range from $200,000 to $250,000, according to a Swiss Bank executive.
Union Bank of Switzerland's UBS Private Investor Funds-the main vehicles for an asset-allocation account with a $1 million minimum-have $150 million of assets under management.
Earlier this year, Deutsche liquidated a passively managed international fund, CountryBaskets Index Fund. The fund was advised by Deutsche Morgan Grenfell, the international investment arm of the bank.
CountryBaskets, an exchange-traded open-ended fund with series, or baskets, was tied to the stock indexes of nine markets: Australia, France, Germany, Hong Kong, Italy, Japan, South America, the United Kingdom and the United States. Its shareholders-institutions and individuals-had invested $240 million in CountryBaskets over nine months of trading before they voted to liquidate.
At that time, a Deutsche spokeswoman said the bank wanted to focus on actively managed funds, or those in which investment decisions are made by valuating individual securities not the movement of an index.