WA shareholder of the listed fund company DWS recently asked at the annual general meeting how Stefan Hoops came about. Karl von Rohr, Chairman of the Supervisory Board of DWS and Deputy CEO Christian Sewing at Deutsche Bank, failed to answer the legitimate question. This is not the subject of the general meeting, he decided harshly. So who is this Stefan Hoops, what qualifies him, and what resistance awaits him as the successor to Asoka Wöhrmann?
Let’s start with the qualifications: Hoops is often portrayed as an in-house creation of Deutsche Bank. That’s almost right, but only almost. From July 2006 to the end of 2007, Hoops worked for a well-known address – albeit in a negative sense: Lehman Brothers Bankhaus AG in Frankfurt, according to the banker’s profile in the LinkedIn careers network. As at Deutsche Bank earlier in his career, he also sold fixed-income financial products at Lehman.
Then it gets exciting for Hoops: Back at Deutsche Bank, he changes sides of the Atlantic. At the New York office, he initially worked in securitization trading. Securitization, there was something: It is the same instrument that plunged banks almost around the world, driven by greed and without reason, into the financial crisis. His former employer Lehman went under, and Deutsche Bank was one of the few institutions to survive the financial crisis on both sides of the Atlantic without using taxpayer money to save it. It gave her a culture that, in retrospect, wasn’t good for her—but that’s another story. And Hoops, just 30 years old, was still working on the “clean-up work” of the financial crisis in the epicenter of the subprime crisis, Wall Street in New York. As Head of North America Structured Solutions, he worked intensively on the settlement units of the major American banks in the wake of the financial crisis before moving back to Frankfurt in 2011.
Front row seat on toxic products
At a young age, Hoops had seen from a front row seat how bankers shouldn’t act. This qualifies him for his job at DWS, which is also said to declare its products to be more sustainable than they actually are. The allegations are still unproven, but they are serious enough that the public prosecutor’s office searched the business premises of DWS, as well as those of the parent company Deutsche Bank. Hoops has nothing to do with the past. But no accusation of greenwashing or other misconduct may be repeated. And Hoops can’t justify not knowing anything. He has seen the depths of the financial industry, toxic products, the abyss with his own eyes.
What else qualifies Hoops to head one of the largest fund companies in Europe? Hoops is transparent: In a video he reveals to students that his favorite hobbies are basketball, sheepskin and weightlifting. He is open about showing up to an interview in white socks with a suit because he didn’t have any black ones on hand, but got the job anyway. It’s this kind of transparency that Hoops will need to wash away any stains of possible greening at DWS.
Confident in the shark tank
It takes a lot of self-confidence to act like that in the shark tank of the financial world. And truly, Hoops is not lacking in confidence. The introductory speech he gave at the DWS Annual General Meeting alone proves that. “I’m already looking forward to being able to report to you at the 2023 Annual General Meeting next year on the progress we’ve made in keeping DWS on its successful path of the past few years and taking it even further forward.” That’s one clear message, because it will not be easy to build on the successes of Asoka Wöhrmann, especially since the geopolitical environment has drastically deteriorated since Russia invaded Ukraine, the central banks are making money more expensive, and the stock markets are in correction mode.
You can tell that Hoops likes to lift weights, even when he’s wearing a suit: the new DWS boss is bursting with strength. However, he will also need them, which brings us to potential hurdles. Because internally, it is important to first overcome resistance. In the fund company, people like to be among themselves. The fact that the major shareholder is Deutsche Bank is often ignored. That explains Asoka Wöhrmann’s popularity: Among the fund managers, he was considered one of them. However, Hoops has the reputation that Deutsche Bank boss Sewing sends his followers and puts his hand on DWS again. Hoops will need all his strength to get the employees on his side and to give the fund company a clean slate again.
Not an easy task. But Hoops, in his early forties, must have thought carefully about his career move: he will have to see and listen to a lot of new things. And he is no longer the one who is still at the beginning of his career, as he was in the financial crisis in New York, but he is at the head of a fund company that manages almost one trillion euros in assets. There is a different level of fall. It remains to be seen whether the career of the shooting star at Deutsche Bank will be damaged or whether it will further promote it. After all, Stefan Hoops has already been traded as Sewing’s successor.
