Investment

Deutsche Bank's asset manager examines growth partners

Bloomberg/Alex Kraus

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DWS Group is considering various options including joint ventures and distribution partnerships.

Sunday 21, April 2019

(Bloomberg) --Deutsche Bank’s asset management arm has held preliminary talks on teaming up with firms including UBS Group and Axa as it looks for ways to boost its size.

The company isn’t looking at scenarios where Deutsche Bank would lose control over the unit.

DWS Chief Executive Officer Asoka Woehrmann has been focusing on cost cuts since he was appointed to the role last October while seeking to stem four quarters of client money outflows.

The company’s assets under management are low compared to many other international money managers, raising questions about the need to boost DWS’s size through means other than organic growth in an industry that is increasingly driven by economies of scale.

It’s not clear whether there is a preferred option or if any decision is imminent, the people said, asking not to be identified because the matter is private.

German insurer Allianz, UBS and France’s Amundi would all be potentially interested in a tie-up with DWS. Analysts have speculated that Deutsche Bank may sell the company as one way to cover the costs of a potential takeover of rival Commerzbank.

DWS suffered outflows of EUR 22.3 billion ($25.1 billion) of client money last year and its stock dropped almost 30 per cent in the nine months between its initial public offering and the end of 2019.

The share price has rebounded strongly since the beginning of the year, not least driven by M&A speculation, and is almost back to the IPO level.

Woehrmann is currently working on a strategic review of the business and plans to present the results during the second quarter, people familiar with the matter have said. The review is likely to result in accelerated cost cuts and he may discard some of the financial targets set by predecessor Nicolas Moreau before the IPO.

 

TAGS : DWS Group , Deutsche Bank, UBS Group, AXA, Allianz, Commerzbank, mergers and acquisition

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