Deutsche Bank has laid off the Chicago-based investment staff of the Scudder Venture Partnership Fund and will now run its operations from New York. The move is the latest from the German banking giant, which has been seeking to reduce its private equity holdings.
The Chicago staff had come aboard as Deutsche Bank acquired New York-based Zurich Scudder Investments. Zurich Scudder closed the Scudder Venture Partnership Fund with $160 million in January 2001. At its close, management expected the fund to invest in 20 to 25 venture funds over three or four years. Its investments include Adams Capital Management, Alloy Ventures and Highland Capital Partners.
In December Deutsche Bank entered into negotiations with the management team of DB Capital Partners to carry out an MBO of its late-stage direct private equity portfolio, valued at $1.5 billion.
Deutsche Bank is seeking buyers for part of its private equity arm, which has approximately $6 billion under management. It is understood to be looking for potential buyers for its direct investments, which have a book value of between $3.5 billion and $4 billion. Deutsche Bank will not put any new funding into the direct investment business, while the $2 billion fund-of-funds business, which represents approximately 30% of the business, is expected to remain with Deutsche Bank.
In mid-2002 Deutsche Bank Chairman Josef Ackermann said the bank planned to cut $2 billion from its operating costs by restructuring its retail and private banking businesses and reducing its $6 billion private equity portfolio.
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