Deutsche Bank AG's asset management arm DWS Group is considering a sale of its private equity secondaries business as part of a plan to pull back from areas where it doesn't have sufficient scale.
DWS has been pitching the unit to interested parties, people familiar with the matter said. Chief Executive Officer Stefan Hoops is weighing a disposal after concluding the business requires substantial investment, which he prefers to make elsewhere, the people said, asking not to be identified discussing the private information.
Secondaries transactions involve buying stakes in private equity funds from existing investors who want out. They have grown in popularity as way to improve liquidity, with deal volumes hitting an all-time high last year, according to Campbell Lutyens & Co. But with only around $450 million under management, the DWS secondaries unit is a small player in a competitive market where rivals command multibillion-dollar funds.
Mr. Hoops, who has been conducting a broad review of DWS since taking over six months ago, on Wednesday pledged to boost profitability and trim costs at an investor day in Frankfurt. He plans to shift resources to products that he thinks have the best chance of growth such as the company's suite of passive products known as Xtrackers and parts of its alternatives business.
A DWS spokesman declined to comment.
"There are parts of our platform where we're not as competitive as we would like — in some cases because we lack scale, in others because of the mediocre track record," Mr. Hoops said during an earnings call in October. "This obviously provides self-funding opportunities without a tangible impact on our clients."
Mr. Hoops has also focused on ways to make DWS stock more attractive to investors and ultimately raise its valuation, Bloomberg has reported. As part of that effort, he's questioned the strength of the DWS brand outside the firm's German home market and is considering changing the firm's complex legal structure into one that's more appealing to foreign shareholders, people familiar with the matter have said.
While the secondaries unit is part of DWS's alternatives division, the CEO has highlighted real estate and infrastructure finance as growth areas.
