2ND UPDATE: Guggenheim Exclusive Bidder For Deutsche Asset Management
February 28 2012 - 2:32PM
Dow Jones News
Deutsche Bank AG (DB) said Tuesday it has entered exclusive
negotiations with financial services firm Guggenheim Partners on
the sale of its asset-management operations that it put under
strategic review in November 2011, in a deal that could be worth
around EUR2 billion.
Guggenheim Partners, which has expertise in institutional asset
management for the insurance and pension sector, as well as a range
of mutual funds, is interested in acquiring all of the operations
available, according to a person familiar with the matter.
A price wasn't disclosed and a deal still might not happen, said
people familiar with the matter. The business up for sale includes
roughly EUR400 billion ($537 billion) of assets under management.
Deutsche has been shopping it around since November and had
whittled down the field of buyers to a handful.
Analysts have estimated the business up for sale could be valued
at between EUR1.5 billion and EUR2.5 billion. A deal could be
signed within the first quarter, Dow Jones Newswires reported
earlier.
Deutsche Bank's asset management division is split into four
business lines: DWS, Deutsche Insurance Asset Management,
institutional advisory business DB Advisor and the alternative
investment operations, RREEF.
In November, the bank said it was "conducting a strategic
review" of its global asset-management division--excluding the
retail DWS franchise in Germany, Europe and Asia--and would focus
on how recent regulatory changes and associated costs and changes
in the industry are affecting the business and its growth
prospects.
Rumors about Deutsche's plans have swirled for months. Dow Jones
Newswires reported earlier this month that the potential buyers
included State Street Corp. (STT), Macquarie Group Ltd. (MQG.AU),
J.P. Morgan Chase & Co.'s (JPM) asset management business and
Apax Partners.
Guggenheim is a New York- and Chicago-based investment bank led
by Mark Walter as chief executive and Alan Schwartz, a former CEO
of Bear Stearns Cos., as executive chairman. It has been expanding
recently, starting a proprietary trading business last year.
Last year, it organized its asset-management operations into a
new unit, Guggenheim Investments, which has $125 billion of assets,
including $20 billion of ETFs.
In a statement Tuesday, a Guggenheim spokesman said the firm
"regularly evaluates opportunities to strengthen and enhance its
business platform and client offering, and has a strong track
record in managing clients' assets. We are pleased to enter into
exclusive negotiations with Deutsche Bank and believe its asset
management businesses represent an attractive opportunity for
Guggenheim to leverage our expertise."
Analysts have said that Deutsche Bank never reached an economy
of scale to make it worth keeping the business, adding that selling
the unit will help the bank improve its capital ratios in a time
when banks globally are looking to boost balance sheets under new,
stricter requirements.
-By Eyk Henning and Liz Moyer, Dow Jones Newswires, 49 69 29 725
108; eyk.henning@dowjones.com
--Mike Foster of Financial News contributed to the article.
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