Deutsche Bank’s asset management arm has held preliminary talks on teaming up with firms including UBS, Axa and Amundi as it looks for ways to boost its size, people familiar with the matter said.
DWS is considering various options including joint ventures and distribution partnerships, the people said. The company isn’t looking at scenarios where Deutsche Bank would lose control over the unit, the people said.
Shares of DWS reversed gains on the news and were down 0.75% at the end of last week after rising as much as 1.3% earlier. The stock is still up 36% this year amid speculation the firm may be sold to help Deutsche Bank finance a potential takeover of Commerzbank. German insurer Allianz is among firms said to be interested in such a deal.
DWS CEO 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’s increasingly driven by economies of scale.
-
The products have already attracted $1.3 billion in new assets this year, more than half what they took in during 2018.
March 15 -
Volatility “makes investors a little bit more negative and cautious,” says DWS Chief Financial Officer Claire Peel.
February 1 -
The bank has considered buying DWS to combine it with its own unit and spin the two off as a separate entity, sources said.
April 4
It’s not clear whether there’s a preferred option or if any decision is imminent, the people said, asking not to be identified because the matter is private. Asset management under ESG criteria is one area where DWS is looking for partnerships, one person said
Representatives of DWS, UBS and Axa and Amundi declined to comment.
UBS and Amundi would also be potentially interested in a tie-up with DWS, people familiar have said. Analysts have speculated that Deutsche Bank may sell the company as one way to cover the costs of a potential takeover of Commerzbank.
DWS suffered outflows of $25.1 billion of client money last year and its stock dropped almost 30% in the nine months between its initial public offering and the end of 2019.
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.
