Dobson Has a Small Mountain to Climb

Financial News, October 29, 2001 | Go to article overview

Dobson Has a Small Mountain to Climb


Byline: Ian Kerr's Personal view

Michael Dobson is one of those slightly infuriating people. He is the quintessential Englishman straight out of Hollywood Central Casting. In the drab world of fund management, where grey bean-counters predominate, Dobson always looked like the industry's answer to James Bond.

Perhaps it's the Savile Row suits or the casual self-confidence which seems to come naturally to a certain type of old Etonian - David Mayhew of Cazenove and Simon Robertson of Goldman Sachs are from the same mould.

But Dobson is not simply profile material for GQ magazine. He cut his teeth at Morgan Grenfell and followed Sir John Craven on to the Deutsche Bank Vorstand, a rare achievement for a non-German. Under his direction, asset management thrived despite the episodes of Nicola Horlick occasionally throwing toys out of her pram and rogue fund manager Peter Young electing to appear in court wearing a very fetching frock.

Today, Dobson's asset management business at Deutsche is, in my opinion, a shadow of its former glory, but Deutsche has only itself to blame. Apart from the success of his own division, remember also that it was Dobson who encouraged the hiring of Edson Mitchell. As one senior investment banker at Salomon Smith Barney confirmed: "Michael always gave the impression of being totally laid back, but his fund management group was a money-spinner and bringing in Mitchell made Deutsche hundreds and hundreds of millions of dollars".With such a background of achievement, why did Dobson leave Deutsche Bank? The answer is that he should never have been allowed to walk away. But he is a man of high principle who believes in fair play and, unlike most other members of the Deutsche Vorstand, he was genuinely concerned about the interests of the bank's shareholders.

Therefore, when Deutsche Bank, in cahoots with Allianz, tried to steal the crown jewels of Dresdner Bank in a so-called merger, Dobson found himself in an unenviable position. The deal between Allianz and Deutsche was to divide up the Dresdner spoils without paying more than a minimal premium for the most choice assets. However, in return for the crucial support of Allianz, Deutsche's chairman Rolf Breuer had agreed that Allianz should end up with the prize of most of the combined asset management operations of both Deutsche and Dresdner.

Dobson might have approved the concept, but he certainly did not agree about the price at which the operations were to be transferred. When he made his feelings clear to Breuer, he was essentially told to mind his own business. The proposed merger was already on the rocks, but Dobson resigned.

Deutsche Bank's loss is now Schroders' gain. Since Dobson's departure the asset management business of Deutsche has gone steadily downhill and today makes only a modest contribution to group profits. That is seen as yet another management misjudgment by Breuer. "If Michael had stayed, they wouldn't have slipped down the ladder so easily. He just wouldn't have allowed that to happen," said an Edinburgh stockbroker who has known Dobson since his Morgan Grenfell days.

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