Struggling Zurich Group Holds On To Lucrative UK-Based Asset Manager
The Zurich Financial Services Group has confirmed
that it is in an 'advanced state of negotiations' with Deutsche Bank AG
to finalise the details of the German Bank's acquisition of Zurich's asset
manager, Zurich Scudder Investments. The acquisition will exclude Zurich's
Threadneedle asset manager, the third largest in the UK with US$16.6 billion
of assets under management, because it is too 'closely integrated' with
Zurich's distribution network in the British Isles. Zurich Financial has recently been struggling
to hold its head above water. With shares falling by 60 per cent this
year the Group was forced to announce a 13.2 per cent decrease in first
half earnings earlier this month. The organisation then disclosed a 'normalised'
first half net profit of $922 million, down from $1.1 billion for the
first half of 2000. As part of the Group's strategy to brand
Zurich Scudder as a global fund manager, Zurich bought several fund management
companies over recent years such as Kemper and Scudder, Stevens &
Clark (US), and Threadneedle (UK). But problems ensued with the integration
of the companies and poor performance and Zurich brought in Goldman Sachs
and Morgan Stanley as advisors in a bid to improve its fund management
activities. However, sometimes it has to be that when
in doubt, sell out and Zurich has chosen to sell to one of the world's
largest financial services firms. Deutsche Bank AG currently manages over
$600 billion worldwide, has 12 million customers and 98,000 employees. .
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