Deutsche asset management to pay bulk of profit in dividends

Bloomberg

Deutsche Bank AG’s investment unit said it plans to pay out most of its earnings to shareholders as it seeks to attract investors to a planned initial public offering next year.
The asset manager will use its DWS German retail brand to sell its products globally and will be renamed to reflect that brand, the bank said on Tuesday.
The business expects to achieve net inflows of 3 percent to 5 percent of assets under management in the medium term, an adjusted cost-income-ratio of less than 65 percent and a dividend payout ratio of 65 percent to 75 percent, according to a statement.
Deutsche Bank Chief Executive Officer John Cryan in March announced plans to sell a minority stake in the unit, known as Deutsche Asset Management, to help shore up capital, ending years of shifting strategies for the business that have eroded client confidence and employee morale. Assets under management have started to rebound this year as customers retur-
ned and CEO Nicolas Moreau
reorganized management.
Deutsche Bank’s payout target for asset management would put it in line with larger rival Amundi SA, the investment firm controlled by Credit Agricole
SA, which has set a minimum payout ratio of 65 percent. Schroders Plc last year paid
out about 52 percent of profit, according to data compiled
by Bloomberg.
Deutsche Bank is expected to sell a 25 percent stake in its asset management unit for about $2.3 billion, people familiar with the matter said previously. The management team will be comprised of eight people, led
by Moreau, with four of them based in Frankfurt.
Total invested assets at Deutsche Bank Asset Management have declined to 711 billion euros at the end of the
third quarter, from 715 billion euros a year earlier, accordi-
ng to Deutsche Bank’s latest
interim report.
The unit suffered outflows last year as concern about the parent company’s financial strength rattled investors. This year, clients added 14 billion euros in new money in the first nine months.
The unit’s name change is meant to highlight independence from the parent comp-
any and facilitate a new ownership structure should Deutsche Bank eventually decide to sell
a bigger stake, according to a person briefed on the mat-
ter who spoke on condition
of anonymity.
Amundi had 62 billion euros of net inflows in 2016, or about 6 percent of its assets under management. It hasn’t yet given new flow targets following the purchase of Pioneer Investments. Natixis SA, which owns US fund managers Harris
Associates and Loomis Sayles, last month set a target for its
asset-management business to attract more than 100 billion euros ($119 billion) of new money over the next three years, in an effort to reach 1 trillion euros under management. Natixis had 813 billion euros under management at the end of September.
To prepare for the IPO, Deutsche Asset Management in the first quarter next year will turn itself into a Kommanditgesellschaft auf Aktien, or KGaA, a form of limited partnership under German law that also has elements of a corporation selling stock. The structure helps ensure Deutsche Bank’s control over the unit.

Mueller subpoenas Trump Deutsche Bank records
Bloomberg

Special prosecutor Robert Mueller zeroed in on President Donald Trump’s business dealings with Deutsche Bank AG as his investigation into alleged Russian meddling in US elections widens.
Mueller issued a subpoena to Germany’s largest lender several weeks ago, forcing the bank to submit documents on its relationship with Trump and his family, according to a person briefed on the matter, who asked not to be identified because the action has not been announced.
“Deutsche Bank always cooperates with investigating authorities in all countries,” the lender said in a statement to Bloomberg on Tuesday, declining to provide additional information.
Deutsche Bank for months has rebuffed calls by Democratic lawmakers to provide more transparency over the roughly $300 million Trump owed to the bank for his real estate dealings prior to becoming president. Representative Maxine Waters of California and other Democrats have asked whether the bank’s loans to Trump, made years before he ran for president, were in any way connected to Russia. The bank previously rejected those demands, saying sharing client data would be illegal unless it received a formal request to do so. Trump has denied any wrongdoing. Calls and emails to the White House weren’t immediately returned before US office hours. Handelsblatt reported the subpoena earlier on Tuesday.
Mueller’s investigation — which is looking into alleged Russian interference into last year’s US election and whether Trump’s winning campaign assisted in those efforts — appears to be entering a new phase. Trump’s former national security adviser, Michael Flynn, pleaded guilty to lying to FBI agents, becoming the fourth associate of the president ensnared by Mueller’s probe. More significantly, he also is providing details to Mueller about the Trump campaign’s approach to Flynn’s controversial meeting with a Russian envoy during the presidential transition.