A little more than three years after Deutsche Bank announced it was merging its asset and wealth management businesses, the global banking giant is breaking them apart.
Deutsche Bank AG announced in October that starting next year, Deutsche Asset Management will be split out of Deutsche Asset & Wealth Management and operate as a stand-alone unit under the leadership of former BlackRock Inc. executive Quintin Price. A spokeswoman for DeAWM declined to comment further.
Industry observers are divided on whether the reorganization will bolster Deutsche Asset Management, which has struggled for some time.
Data from Pensions & Investments show the firm's U.S. institutional tax-exempt AUM was $11.56 billion at Dec. 31, 2014, down 26% from the same period a year prior and down nearly 78% from its post-crisis peak of $51.75 billion at year-end 2009. The decline is due in part to the loss of some clients as well as Deutsche spinning off its $11 billion quantitative equity business, QS Investors LLC, in 2010.
Globally, net revenues for DeAWM were e1.2 billion ($1.32 billion) for the third quarter, down 5% from the year-earlier period. Management fees and other recurring revenues increased by 17% in the third quarter from the quarter ended Sept. 30, 2014.
Jerry W. Miller, managing director and head of DeAWM Americas, has been building a deep bench in both investment and distribution for the North American institutional business, recruiting more than a dozen people in 2014 and continuing to hire staff members in 2015.
The bank announced it “expects to build on the ... momentum of its asset management business in the Americas.”
Dirk Becker, an analyst at Kepler Cheuvreux, an advisory firm for the investment management industry, Frankfurt, said in a phone interview that he would be very surprised if the bank were planning to sell off the asset management business.
Deutsche in 2012 had plans to sell the asset management division to New York-based Guggenheim Partners. But failing to get the price it wanted, the bank decided to review its options. Later that year, the bank announced it was merging its asset and wealth management businesses to create DeAWM.
The impending separation of the two businesses comes at a time when a number of global banks — including Deutsche, UniCredit Group, Banco Santander and Credit Suisse Group — are refocusing efforts on money management.
Deutsche's then co-CEOs Jurgen Fitschen and Anshu Jain on April 27 outlined a plan called “Strategy 2020,” which included accelerated growth for DeAWM. The plan includes investment in people and strategies to capture future growth in the division. Messrs. Jain and Fitschen in June announced their plans to resign. Mr. Jain will remain a consultant to the bank until January 2016, while Mr. Fitschen plans to leave his post in May 2016. Former UBS AG Chief Financial Officer John Cryan, who assumed the role of co-CEO with Mr. Fitschen in July, will be CEO after Mr. Fitschen's departure.