Deutsche Bank to Rebrand Asset Management Arm as DWS

German lender Deutsche Bank AG announced on Tuesday that it will be rebranding its asset management arm Deutsche Asset Management into DWS as a new global umbrella brand.

The Frankfurt-based financial firm said that it will be using DWS, its main retail brand, to sell its products around the globe.

Deutsche AM accounts for about a tenth of the firm’s revenues, but is more profitable than other parts of the group. In the first nine months of 2017, it brought in 11 percent return on equity, compared with the overall company’s 3.5 percent.   

The business is expected to generate net inflows around the range of 3 to 5 percent of assets under supervision in the medium-term.

It is also projected to bring in adjusted cost-income ratio of 65 percent below, a dividend payout in the range of 65 to 75 percent, as well as management fee margins of more than 30 basis points. Deutsche AM had a management fee margin of 32 basis points in the first nine months.

Germany’s largest lender will be changing its legal structure as well to ensure the new unit works separately from the parent.

Deutsche AM’s head stated that they seek to unlock the full potential of the unit to facilitate growth and that their future legal structure shows the long-term commitment of the bank to their business, while providing them the operational independence to progress their growth strategy.      

Deutsche Bank’s board member Karl von Rohr is set to be appointed as chairman of the supervisory board of the asset management arm within the new structure.

Deutsche Bank Sells Minority Stake in Deutsche AM

The bank earlier this year decided to sell a minority stake in Deutsche AM to boost capital, so as to end years of shifting strategies for the business that have eaten away client confidence and employee enthusiasm.

Deutsche AM’s name change is intended to underline independence from the parent company as well as to facilitate a new ownership structure should the bank decides to sell a larger stake.

Sources familiar with the matter stated that the planned listing could get an overall valuation of about €8 billion ($9.5 billion).

Deutsche Bank did not reveal details about the timing and the size of listing, but the lender is believed to sell 25 percent stake for about $2.3 billion.

To prepare for its initial public offering (IPO), the asset management arm would start to have the legal structure of a partnership limited by shares, or KGaA in German during the first quarter of 2018.

This would allow Deutsche Bank to still be in control of the unit even if its shareholding goes lower the 75 percent needed to get ahead of normal German stock companies.

However, if the bank’s holding drops below a certain limit, DWS will lose the KGaA standing and become an AG or a standard stock corporation. Normally, such threshold would be 50 percent.

At the end of the third quarter, Deutsche Bank currently has €711 billion ($843 billion) worth of invested assets, which was 0.6 percent less than its €715 billion ($848 billion) in the previous year.

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