Deutsche Bank on Tuesday announced it will integrate its three major money management businesses, including the four units it tried to sell earlier this year, into one division that will also include passive and alternatives capabilities transferred from its corporate banking and securities division.
Through the integration of the global asset management, passive and alternatives businesses, Deutsche Bank aims to double the profitability of its new asset and wealth management division by “eliminating as much duplication as possible” following a revamp of its €900 billion ($1.15 trillion) business that's part of the bank's “Strategy 2015+” initiative, according to a webcast news conference.
Deutsche Bank will look to boost profit from its money management division to €1.7 billion in 2015 from €800 million in 2011.
“We are way behind the competitive standard here. That €1.7 billion aspiration just puts us at the bottom of the top five” largest money managers in terms of profitability, co-CEO Anshu Jain said in the webcast.
The firm plans to grow its passive, alternatives and emerging markets client businesses, while RREEF and the other units previously on the block have been tabbed for “turnaround,” according to the webcast. In addition to the RREEF Alternatives unit, the bank tried to sell institutional arm DB Advisors, Deutsche Insurance Asset Management and U.S. mutual fund firm DWS Investments Americas earlier this year. Those units run a combined $540 billion.
Deutsche Bank also said it will “leverage scale in active asset management” to boost revenues in the future, according to the webcast.
In June, Deutsche Bank said it and Guggenheim Partners agreed to end talks to buy RREEF; the pair earlier failed to come to agreement on a sale of all four units. In November, the bank announced it would consider “all strategic options” in a strategic review of its global asset management business, and in February that it was in exclusive talks with Guggenheim for a possible sale.
Deutsche Bank spokeswoman Kathryn Hanes declined to comment.