Deutsche Bank is scrambling to provide leadership and restore flagging morale in its corporate bond research group. Charlie von Arentschildt, Deutsche Bank's head of global markets for the Americas, says the impetus for this effort were remarks byDavid Folkerts-Landau, the firm's London-based global head of markets research, critical of recently dismissed investment-grade research co-heads Paul Tice and Mark Girolamo (BW, 2/4). Folkerts-Landau declined comment through an assistant.
Von Arentschildt acknowledges that Folkerts-Landau's remarks did not sit well with members of the corporate bond group. "Morale was a problem when the [BondWeek] article first came out, but as people become more focused on what our aspirations and plans are, much of that concern is being alleviated--I hope," he says. Recently, von Arentschildt hired Bill Reed,Merrill Lynch's former co-head of investment-grade research, who had been released in a round of firm-wide layoffs (BW, 1/14). Reed, who declined comment, will be a managing director and investment-grade industrials analyst. Von Arentschildt also argues that morale will be aided by integrating the business units of the corporate bond group--trading, sales and research--to force a closer working relationship amongst the three. "I'm looking horizontally and holistically," says von Arentschildt, "We need to have all the component parts of our investment-grade business carefully aligned." He declined to be more specific.
Mark Howard, credit strategist at Lehman Brothers, is believed to be interviewing for the top spot in Deutsche Bank's U.S. investment-grade research group. Howard did not return phone calls seeking comment. Ted Meyer, a DB spokesman, and von Arentschildt both declined to discuss the firm's prospective targets for the job.
Reed will report to Folkerts-Landau "for the time being," says von Arentschildt, declining to elaborate. Asked whether Reed was concerned about going to work for Folkerts-Landau, given the nature of his comments in the BW article, von Arentschildt says, "he didn't show any particular concern that I remember."
Though Reed has management experience at Merrill, von Arentschildt made it clear that he will not be running U.S. investment-grade research, and there is still a "leadership gap that Tice and Girolamo left." Asked whether Reed was the firm's first choice, von Arentschildt says, "Bill was one of many candidates. I don't think there was a first choice."