Zurich contracts investments to Deutsche
Deutsche Asset Management(DAM) has been contracted by Zurich to implement the investment mandates formerly carried out by Zurich Scudder, effectively making Zurich a client of Deutsche, following the previous announcement of the sale of Zurich Scudder Investments to DAM.
Zurich Scudder had been the investment manager forZurich Financial Services(ZFS) in Australia and ZFS will continue to own the investment process, intermediaries and customer relationship, and remains the distributor of its own products.
The final details were announced today, following six months of negotiations after the sale was initially announced in September 2001. The deal was finalised last Monday for US$2.5 million.
Zurich chief executive officer John Butler says the strategic alliance will bring benefits to both the customer and advisers, namely through increased resources to enhance service.
“We [Zurich] see Deutsche as one of our core strategic partners and we believe they have excellent competencies which complement our products. The relationship is important to building upon the success of both businesses in Australia,” he says.
“The relationship will build upon existing capabilities for both customers and advisers.”
Continuity of the investment process has been ensured through the integration of Zurich Scudder’s existing investment team into Deutsche. Eleven members have moved across, including Daniel Sullivan and Shawn Burns from Australian equities and Bill Barbour from International.
Increased capabilities include larger research teams such as access to 13 Australian equity analysts and more than 150 equity analysts around the world.
Zurich head of distribution Steve Newnham says the relationship with Deutsche reflects Zurich’s strategy of seeking companies with core competencies not practiced by Zurich, rather than the group attempting to be all things to all people.
“The Zurich business model is to focus on being a packager of products and services to customers and intermediaries,” Newnham says.
“Overlap was definitely a big issue for us, as that could lead to a gnashing of the teeth, but after six months of negotiations there is little overlap, if any at all.”
He says as the business goes forward, the focus on asset management, general insurance and life risk will provide growth opportunities for the two groups to provide packages of products, especially under Financial Services Reform.
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