Deutsche Bank starts asset manager sale

Deutsche Bank AG hopes the sale of a big chunk of its global asset management business will raise between 2 ($2.6 billion) and 3 billion euros, two sources close to the process said, as it quits an area in which it lacks scale to compete. Germany's biggest lender sent information on the assets up for sale to more than 30 potential buyers that have signalled interest, including banks and asset managers.
The financial sources said on Friday, adding that non-binding offers were expected in January or February. Equinet analyst Philipp Haessler said in a note that a price of 2 billion euros would appear somewhat low but that "clearly, in the current market environment, no record prices will be paid for bank businesses". The units up for sale have roughly 400 billion euros in assets under management, the sources said, adding that Deutsche would prefer to sell all of the assets to a single buyer but was ready to consider divestments to separate bidders if that would fetch a higher price.
Deutsche Bank, whose shares were flat by 1010 GMT in line with the STOXX Europe 600 banking index, declined to comment. The expected price tag for the operations is in the lower half of the 2 billion to 4 billion euros range that analysts had calculated when Deutsche announced in November it was considering a sale.
However, Kepler Equities analyst Dirk Becker said he expected a lot of interest because asset management is an area where scale is decisive if costs can be contained. Becker said it was realistic to expect Deutsche would collect at least 3 billion euros from the sale given that interest and would fillet the businesses to different buyers if needed to spur proceeds.
"Deutsche Bank will sell to the highest bidder, no matter what," Becker said. The decision to sell follows a strategic review of the business prompted by changing conditions in the industry, including regulatory reforms. The review covered Deutsche's institutional investor business, DB Advisors; its alternative asset business RREEF; an insurance asset management business; and its DWS Investments mutual fund business in the Americas.
Excluded from the review were private wealth management and Deutsche's DWS franchises in Germany, Europe and Asia, which are the most profitable parts of the bank's asset management segment. Large independent listed fund managers are trading at between 1 and 2 percent of assets, according to calculations based on Thomson Reuters data, with Schroders valued at around 1.8 percent of assets, Aberdeen at 1.3 percent and Henderson at about 1.7 percent.
A London-based equities analyst specialising in investment management companies, who spoke on condition of anonymity, said valuing Deutsche would be tricky given how few recent deals in the sector have completed in the last 12 months. Henderson's buyout of troubled rival Gartmore at the start of the year amounted to around 2 percent of assets.
BNY Mellon, Blackrock, J.P. Morgan, Goldman among interested parties receiving information on the assets, the sources close to the sales process told Reuters. Separately, the Financial Times on Friday cited people familiar with the matter as saying as many as 50 parties have registered an interest, including US bank Wells Fargo, Royal Bank of Canada and Ameriprise Financial.