Germany’s biggest bank said it would be selling its shares in the firm “in the earliest available window,” subject to market conditions. The flotation is expected to be funded entirely by the sale of existing shares held indirectly by Deutsche Bank.
Although Deutsche Bank did not confirm how much it intends to raise, sources close to the lender have previously stated it plans to sell a 25% stake for about €2bn.
The planned initial public offering (IPO) is designed to give DWS “greater visibility and brand recognition” to accelerate future growth, in addition to creating a more “diversified business” that can withstand future downward pressure on margins and “supports revenue growth as well as profitability”.
After listing on the FSE it hopes to attract net inflows of 3 to 5% of its opening assets under management per year and maintain a management fee margin higher than or equal to 30 basis points in the medium term.
The asset manager is also aiming to reduce the adjusted cost income ratio to less than 65% over the medium term and return 65 to 75% of its reported net income as a dividend.
James von Moltke, chief financial officer of Deutsche Bank, described the IPO as a win for DWS, shareholders and the Frankfurt-listed bank.
“DWS is a strong asset management business that will gain visibility and agility through this planned listing,” he said. “DWS’s clients, employees, as well as its shareholders, including Deutsche Bank, will stand to benefit.”
DWS manages €700bn AUM in total, comprising €513bn are in active assets and €115bn in passive strategies under its Xtrackers brand, which is the second biggest ETF provider in Europe.
It has professionals across 22 countries worldwide, including Germany where it has a 26.3% market share of the retail market.
Post-separation, Deutsche Bank will remain a long-term distribution for DWS. The asset manager has a 10-year distribution agreement with Deutsche Bank, including its retail bank Postbank, as well as a master service agreement, which covers certain administrative services.
Commenting on the planned listing, Nicolas Moreau, chief executive officer of DWS, said: “The planned IPO will give us the opportunity to unlock the full potential of DWS for clients and employees, while targeting attractive returns for our shareholders. We are very proud to be one of the leading asset managers in Europe and globally. We look forward to bringing our strong, truly global investment platform and over 60 years of investment experience to the public markets.”