Deutsche Bank appears poised to acquire a second "offshore" money market mutual fund complex with Standard Life's proposal to merge its funds into DB Advisors'. The marks the second acquisition by Deutsche of money funds assets from a British advisor, and may indicate that U.K.-based institutions are having second thoughts about the money fund business. DB became subadvisor of Henderson Global Investors' 3.3 billion Pound Henderson Liquid Assets Fund late last year. (See our October 6, 2010, Crane Data News "Deutsche Bank to Manage Henderson Liquid Assets Offshore MM Fund.")
A press release entitled, "DB Advisors Welcomes Opportunity to Expand Money Market Funds," says, "DB Advisors, Deutsche Bank's global institutional asset management business, said today that it would welcome an opportunity to amalgamate some of Standard Life Investments (Global Liquidity Funds) p.l.c.'s money market funds into the DB Advisors fund range. Standard Life Investments (Global Liquidity Funds) p.l.c has proposed to shareholders in its Sterling, Euro, and U.S. Dollar Liquidity Funds that these sub-funds are merged with DB Advisors' Deutsche Global Liquidity Series (DGLS) money market funds. The funds are constant net asset value (NAV), AAA-rated, money market funds. A shareholder vote is expected in April."
The release continues, "Standard Life Investments currently manage assets of L5.6 billion, E2.0 billion and $172 million for the (Global Liquidity Funds) plc. If shareholders vote in favour of amalgamation, it is expected that a significant proportion of these assets will transfer to DB Advisors. Figures are subject to change. The announcement of this proposed amalgamation follows the successful conclusion of a similar initiative between DB Advisors and Henderson Global Investors. In March 2011, DB Advisors completed the merger of the Henderson Liquid Assets Fund into its Sterling-denominated DGLS fund. Approximately L2.5 billion of assets were transferred to DB Advisors."
Mark Bolton, CEO of DB Advisors UK, said, "DB Advisors is committed to serving the needs of money market fund investors worldwide. We would be delighted to welcome investors in these funds to our global platform, which has deep resources, a robust credit process and a strong commitment to transparency." The release adds, "With over E94 billion in money market assets under management (as at December 31, 2010), DB Advisors is a leading provider of cash and short duration investment strategies for investors worldwide."
According to Crane Data's Money Fund Intelligence International, which tracks "offshore" or "IMMFA" money market funds, domiciled primarily in Dublin and Luxembourg, Standard Life is the 12th largest manager of money funds outside the U.S. out of 21. DB is the 7th largest offshore money fund manager in this $614 billion market. The largest managers in this space are JPMorgan, BlackRock, Goldman and HSBC, which was recently mentioned in the FT denying any plans to exit the business.
See our March 28 Link of the Day "The Financial Times writes 'Amundi money market move bucks trend'", which quoted the FT, "Last week, it was reported that HSBC Global Asset Management had considered leaving the sector altogether because of regulatory risks in the US. It came only a few months after Henderson Global Investors shifted most of its money market business to DB Advisors, Deutsche Bank's global institutional asset management business, citing regulatory pressure as the main reason.... [But] HSBC says it has 'no plans to exit the money market industry', which represents around 20 percent of its assets."
