DWS Scudder Doubles S-Notes Sales to $600 Million (Investment News)

Excerpt: DWS Scudder has launched 155 structured notes since 2006, including 59 through June 30 of this year, with another 61 expected by the end of the year. It expects to sell $600 million in structured notes this year, compared with $300 million last year.

By Aaron Siegel
Investment News

In a bid to increase its market share among retail investors in the United States, DWS Investments has pursued a branding strategy and broadened its product line.

Its parent company, Deutsche Asset Management Inc. of New York, changed the name of its U.S. retail unit to DWS Investments, from DWS Scudder. The name switch means that the company will operate under a single brand.

"It makes sense for DWS to have a global brand ... so the brand positioning is consistent with the rest of the world," said Howard Schneider, a former Scudder employee and president of Boxford, Mass.-based Practical Perspectives LLC. "Having multiple brands just causes confusion as to who you are, unless you are creating a certain brand for a certain way of managing money."

The company has been pushing to penetrate the U.S. adviser market long before the re-branding. It has expanded its sales organization to 200 wholesalers, from 172 in 2005, and plans to expand its head count next year.

Additionally, the firm plans "to play a bigger role in the U.S. market" and has expanded the company's product mix beyond mutual funds, said Axel Schwarzer, chief executive of DWS Investments.

The asset management firm wants to become a multiwrapper absolute-return manager that integrates retail, alternative investments, insurance and institutional businesses, the company said.

To attract advisers, New York-based DWS Investments has unveiled a slogan and a website to highlight its commitment to advisers.

Using the "Reshaping Investing" slogan, the company is emphasizing how it will help investors cope with lower-return expectations and higher volatility through investments in alternative investments, structured notes, absolute returns and structured products, according DWS Investments.

DWS has launched 155 structured notes since 2006, including 59 through June 30 of this year, with another 61 expected by the end of the year. It expects to sell $600 million in structured notes this year, compared with $300 million last year.

Additionally, DWS Investments launched the DWS RREEF Global Infrastructure Fund this year, after bringing to market in 2007 the DWS Disciplined Market Neutral Fund, DWS Alternative Asset Allocation Fund, DWS LifeCompass Protect Fund and DWS Life Compass Income Fund.

DWS Investments manages $817 billion in assets worldwide, including $345.9 billion of retail assets under management as of March 31.

Fully 71% of those assets are from European investors, while 24% are from the Americas, and 5% are from the Asia-Pacific region.

The figure also includes $80 billion in retail and retirement assets in the United States.

The company also wants to move up its asset rank to the top 10, from 24th, in the United States, and to the top five globally, from ninth.

However, Mr. Schneider questions whether DWS' strategy to focus on just niches will help propel it into the top 10 among asset managers. DWS Investments is "doing lots of innovative things, and the challenge is to get critical mass" in products such as alternatives and structured notes, he said.

A danger in creating these kinds of products "is that you can be successful but not raise enough assets to raise the core of your business," Mr. Schneider said. "If their goal is to become a top 10 asset manager, they have to hit the right niche, then they have to have the right product to bring to market."

Meanwhile, one analyst is taking a wait-and-see approach.

"DWS has made some positive changes to focus on their strengths, and we need to see them stabilize and deliver good results for shareholders," said Miriam Sjoblom, a mutual fund analyst for Morningstar Inc. of Chicago. "Just putting the changes in place is not good enough, and we need to see them actually work."

E-mail Aaron Siegel at asiegel@investmentnews.com.