December 16, 2011

Deutsche Bank Selling Chunk of Asset Management Business

Nonbinding offers expected in January or February

Deutsche Bank AG has begun the process of selling off a large portion of its global asset management business, and has sent information to prospective buyers on the assets for sale.

Reuters reported that two sources familiar with the process said the price tag was expected to be between 2 billion euros ($2.6 billion) and 3 billion, which is in line with the the lower end of a 2-4 billion euro range originally calculated by analysts in November when Deutsche Bank announced that such a sale was under consideration.

The decision to sell was made in the wake of a strategic review of the business that was spurred by changing conditions within the industry that included regulatory reforms.

The sources said that the bank hopes to be able to sell all the assets to a single buyer. However, it will entertain multiple buyers if that will bring in a higher price.

Up for sale, according to a report in the Financial Times, are Rreef, Deutsche Bank’s alternative asset manager with approximately 46 billion euros in funds, as well as the bank’s U.S. asset management business, which manages more than 200 billion euros, including 40 billion euros in retail assets. Not included are its ETFs or its domestic German business DWS. According to the report, Kevin Parker, global head of asset management at Deutsche, wanted to buy out Rreef but was not able to secure financial backing.

Information has already been sent to dozens of prospective purchasers that have indicated interest, including banks and asset managers, according to the sources. The Financial Times also reported, citing people familiar with the matter, that as many as 50 parties have registered an interest, including U.S. bank Wells Fargo, Royal Bank of Canada and Ameriprise Financial.

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