As part of a larger charge to raise capital
will sell off a minority stake in its asset management business through an IPO.
| John Cryan|
Deutsche Bank AG
Chief Executive Officer
A spokesperson from Deutsche declined to comment on specifics beyond the initial statement, but says that the move is in keeping with DeAM's goal "to become a top ten global asset management player."
will remain chief of the asset management business.
Deutsche Bank will retain a majority stake in the DeAM business. The shares will be listed in Germany, and the IPO will be completed in the next two years. Deutsche Asset Management currently manages around 700 billion euros ($740.7 billion) in assets worldwide. Of that, 207 billion euros ($219 billion) is managed in the Americas.
When IPO rumors were floated back in October, the business was worth an estimated
8 billion euros ($8.91 billion at the time). The bank expects to earn 2 billion euros ($2.12 billion) in capital accretion from the IPO and additional "asset disposals." This is in addition to the 8 billion euros ($8.5 billion) expected from the issuance of up to 687.5 million new shares.
In a letter to colleagues sent out yesterday
, Cryan expects that the move will give DeAM more operational independence. He points to the "success of many independent asset managers" as proof that this independence will fuel growth. He also anticipates that this independence will give DeAM a more visible profile, increasing its ability to recruit top-tier talent.
In the fall, Cryan repeatedly denied
rumors of a DeAM sale. Yet in a message
to colleagues yesterday, he pitched the decision as an opportunity to "[unleash] the growth potential of Deutsche Asset Management." The move also positions Deutsche to further divest from the asset management business further down the line. For now, however, Cryan says that it remains an integral part of the business.
Deutsche's shares fell further today than they have in five months, and reactions to the reorganization effort so far have been mixed, Bloomberg
The New York Times
, and CNBC
, and Reuters
also reported on the story.
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