Deutsche Bank Fails to Reach Agreement with Guggenheim - Hedge Fund Alpha (formerly ValueWalk Premium)
Deutsche Bank

Deutsche Bank Fails to Reach Agreement with Guggenheim

Deutsche Bank Fails to Reach Agreement with Guggenheim

For the second time, Deutsche Bank AG (NYSE:DB) (FRA:DBK) (ETR:DBK) Germany’s largest lender by market value, failed to reach an agreement to sell part of its asset management business to New York based-Guggenheim, a privately held financial services firm that oversees more than $125 billion.

The first time was in May, when Deutsche Bank and Guggenheim failed to come on terms over the potential sale of DWS Americas, DB advisors and Deutsche Insurance Asset Management. DWS America is DB’s American mutual fund business; DB Advisors, its institutional asset management unit; and Deutsche Insurance Asset Management, its global insurance asset management business.

The deal would have quintupled Guggenheim’s assets and put it on par with the likes of Legg Mason, Inc. (NYSE:LM) and Franklin Resources, Inc. (NYSE:BEN).

If the rumors are to be believed, earlier talks failed because of the complexity of the activities involved,  or because the two sides were unable to agree on a price. A Person familiar with the matter suggested that Ameriprise Financial, Inc. (NYSE:AMP) and State Street Corporation (NYSE:STT), who were in the bidding race before for earlier units, could re-enter.

Aberdeen Asset Management plc (LON:ADN)  and Henderson Group Plc (LON:HGG), for instance, might be interested in the DB Advisors unit. DB has been conducting a strategic review of its assets management business, and it will issue more details in September on the matter. Part of its strategic review  may suggest that Deutsche Bank wants to offload parts of its international asset management business in order to focus on its mutual fund units in Germany, Europe and Asia. The businesses being reviewed account for 78% of the bank’s assets under management. They include DWS Americas,  Deutsche Insurance Asset Management as well as institutional asset manager DB Advisor and RREEF. Together it is valued at approximately EUR 1.6 billion.

A representative for Guggenheim Partners could not be reached for comment.


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