Deutsche Bank's money management unit, which will be renamed DWS Group GmbH & Co. KGaA, will list on the Frankfurt Stock Exchange in the "earliest available window," the firm said on Monday.
An intention to float document said the planned initial public offering will be launched subject to market conditions. It is expected to consist purely of the sale of existing shares indirectly held by Deutsche Bank, via subsidiary and DWS sole shareholder DB Beteiligungs-Holding.
Deutsche did not say how much it of the business it intends to sell or at what share price.
The IPO of the money management business, which has about €700 billion ($868.5 billion) in assets under management, will give DWS a new compensation framework to better align remuneration and help to attract and retain talent, said the document. It also gives DWS greater operational flexibility to control costs, "capture both future growth opportunities and select bolt-on acquisitions," said the document.
A source familiar with the situation said the IPO is planned for the week of March 19.
The IPO follows preparations since Deutsche Bank announced plans in March 2017 to list a minority stake in the money management unit. At the time, the bank said it intended to raise €2 billion from the IPO and disposal of assets elsewhere in the group, and that the listing was planned to take place within two years. The source said the IPO relates to a 25% stake in DWS.
The bank late last year outlined a new structure and brand for the money management unit, as well as a designated management team. It operates within a Kommanditgesellschaft auf Aktien legal structure, which is a form of a limited partnership under German law that includes elements of a corporation selling stock and helps ensure Deutsche Bank's control over the unit.
Following the separation of DWS from Deutsche Bank, the bank will remain a long-term distribution partner with a 10-year distribution agreement. DWS and Deutsche Bank have also entered into an agreement covering certain administrative services.
DWS is targeting net inflows of 3% to 5% of opening assets under management per year over the medium term, a management fee margin greater than or equal to 30 basis points, and an adjusted cost income ratio of less than 65%. The targeted dividend payout ratio is 65% to 75% of net income, said the document.
"The planned IPO will give us the opportunity to unlock the full potential of DWS for clients and employees, while targeting attractive returns for our shareholders," said Nicolas Moreau, CEO of DWS, in the document.
Active assets under management are €513 billion, with a further €115 billion run in passive allocations. Alternatives AUM totals €71 billion.
"We are convinced that the planned IPO will act as a catalyst to support our strategy and deliver shareholder value," added Mr. Moreau.
Deutsche Bank is acting as sole global coordinator and bookrunner in the planned deal. Barclays, Citi, Credit Suisse, BNP Paribas, ING, Morgan Stanley, UBS and UniCredit are acting as joint bookrunners, said the announcement. Co-lead managers are Commerzbank, Daiwa, Banca IMI, Nordea and Santander.
