DWS says clients withdrew $8bn in fourth quarter

Bloomberg

DWS Group, the German asset manager taken public by Deutsche Bank AG in March, is wrestling with withdrawals, though its executives say the worst is behind them.
Investors pulled 7 billion euros ($8 billion) in the fourth quarter of 2018, taking total redemptions last year to more than 22 billion euros. To make matters worse, the volatility that roiled markets in the final months of 2018 saw assets under management fall to the lowest in at least two years. DWS shares fell by the most in nearly seven weeks, before rebounding after management sought to reassure investors.
Most of the outflows in 2018 were due to “one-off effects,” Chief Financial Officer Claire Peel said in a telephone interview. More than 20 billion euros of outflows can be attributed to US tax reform and the loss of two large institutional mandates that “won’t be repeated,” she said.
Holding on to customers’ funds is a top priority for Chief Executive Officer Asoka Woehrmann, who replaced Nicolas Moreau in October. As pressure rises on the fees that money managers charge clients rises, the amount of assets they control is increasingly important to the profitability of those firms. In an interview with Bloomberg News last week, Woeh- rmann said he was confident that the firm would see better flows than the market average in 2019.
Last year proved a difficult time for DWS and its peers. BlackRock Inc., the world’s largest asset manager, reported outflows from institutional clients and saw assets under management fall 5 percent in the final three months of last year compared with the same period a year earlier.
“I think Q4 put everyone on watch” Peel said. The volatility in markets “makes investors a little bit more ne- gative and cautious,” she said.