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On a June evening in 1994, a young basketball-obsessed Stefan Hoops stayed up past his bedtime to watch the Houston Rockets claim victory over the New York Knicks, even though it was a school night. It was the first time the NBA finals had been broadcast live in Germany so Hoops’ parents gave him permission for the special occasion.
Almost 30 years later, the DWS chief executive hosted Houston Rockets veteran Robert Horry in Frankfurt for a basketball practice session as part of the asset manager’s global sponsorship of the Los Angeles Lakers.
It is just one of many personal accounts the DWS chief executive has shared on social media since taking on the top job last year. The father of three has posted his thoughts on everything from markets to media coverage of DWS; he has even invited budding finance professionals to quiz him about his career path.
It’s a refreshing approach, and Hoops admits that having free rein over his social media has allowed him to “stay away from corporate communications speak”.
Hoops has been in the job for just over a year when Financial News drops into the London office of DWS.
The 43-year-old has not had the easiest of starts. Hoops rose up the ranks to become head of Deutsche’s corporate bank, but was parachuted in as DWS’s CEO in June last year, following the abrupt departure of Asoka Woehrmann. Woehrmann resigned as chief executive after whistle-blower Desiree Fixler alleged the firm had overstated its ESG credentials in its 2020 annual report.
Fixler’s accusations led to DWS being probed by US and German financial regulators. That culminated last month in a $19m settlement with the US Securities and Exchange Commission; the German investigation is still ongoing.
READ DWS boss: ‘We took right decisions’ after greenwashing claims
Hoops admits he was handed the top job at DWS “without much preparation”, but he appears to have taken the upheaval in his stride: “Unfortunately, I’ve been exposed to weird things happening in the market throughout my career.”
Hoops is younger than most asset management CEOs, but his career path has nevertheless seen him live through some of the most turbulent market events of the past two decades. He worked at Deutsche Bank during the sub-prime crisis and was part of a team made famous by the Big Short — the book by Michael Lewis that was later turned into an Oscar-winning film.
“That weekend when Lehman went under, we spent 72 hours in the office,” he says. “I ran the ABS correlation trading, which had massive exposures to the other investment banks. Running scenarios if they go under and what happens was interesting as a 28-year-old.”
Hoops was thrown into the deep end again in September 2016, when Deutsche Bank’s share price plummeted amid concerns about its capital strength and some hedge fund clients began to trim their exposure. “I had to approve if people got their money out or not. It was worse than September 2008,” he says.
DWS’s new boss says he has spent much of his first year sorting “what I can correct”, including instigating an internal review of ESG allegations.
“If our people lose focus or lose belief in the company, that I can’t correct,” he says. “Imagine if five key portfolio managers said they were out — that you can’t correct, because you have that gap and they are gone. Clients care about the stability of the platform. As long as all the people stay, frankly, they don’t care if I run DWS or somebody else.”
Trying to ensure DWS’s stability meant Hoops spent his first few weeks in the job “flying to Tokyo, Chicago, New York and London to meet our key clients and staff”.
“There were a lot of deliberate decisions about what to do and not to do. In hindsight, we probably took the right decisions because nobody left,” he says. “I wouldn’t want to do it over. But having been through a crisis, the one thing I didn’t want to do was regret that I hadn’t thought of something.”
Much of the past year has been focused on dealing with ESG accusations, but Hoops has also presided over a period in which flows have started to turn for DWS. ETF arm Xtrackers is the second best-selling provider in Europe so far this year behind BlackRock, pulling in $14bn of new money between January and August. First-half results for DWS also showed €10bn of net inflows between April and June, with revenue and profit up 10% and 27% respectively quarter-on-quarter.
Hoops is reluctant to declare the improved situation a comeback, but says there has been a distinct “momentum shift”.
“We’re not declaring victory, but 2022 felt not easy in an industry in a massive downturn,” he says. “It felt like we’d done the hard work, flows were coming in and performance was improving.”
Unlike some large asset managers who have tried to distance themselves from a star fund manager culture, Hoops is keen to celebrate individuals: “You need a positive performance culture. If you have that, logically you will have people that have done that successfully for 15 or 20 years. If they are deemed stars, that’s not a bad thing.”
He adds: “Some of our best-performing strategies are run by people who have displayed that discipline over a long period of time. If clients like it, why should I say I want everyone to be mediocre?”
DWS is currently weighing up whether to bring back corporate job titles for staff, having got rid of the likes of ‘managing director’ in 2019 to create a “simplified corporate structure”. DWS’s biggest rivals still use them to motivate and provide a way of promoting staff, but Hoops makes it clear he is not a fan of them.
“What I dislike about corporate titles, is it implies if you are a managing director, you are more senior than a VP and in a discussion, that view is more valuable,” says Hoops.
CV
Born
January 1980
Education
1999-2003 Master’s in Accounting and Finance, University of Bayreuth
2003-07
PhD in International Economics, University of Bayreuth
Career
2022-present
CEO, DWS Group
2008-2022
Various roles including head of corporate bank, head of ABS correlation trading, North America, and head
of global transaction banking, Deutsche Bank
2006-2007
Fixed income sales, Lehman Brothers
2003-06
Fixed income sales, DeutscheBank
To contact the author of this story with feedback or news, email David Ricketts
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