Sept. 11 (Bloomberg) -- Deutsche Bank AG, Germany's biggest bank, agreed to buy a 40 percent stake in Russian investment management company UFG Invest to bolster its asset management business in the region.

Deutsche Bank will have an option to increase the stake to 100 percent in the future, the Frankfurt-based lender said in an e-mailed statement today. The German company will combine UFG Invest with the Russian unit of its DWS Investments division. UFG Invest, which belongs to UFG Asset Management, oversees assets of more than 400 million euros ($559 million).

Deutsche Bank in 2005 gained full control of Russian broker United Financial Group from owners and founders including Boris Fyodorov, a former Russian finance minister. The bank is among foreign lenders such as Societe Generale SA and Raiffeisen International Bank AG that have invested in financial companies in Russia, where the economy may grow 7.8 percent this year, according to the Economy Ministry.

Deutsche Bank AG Chief Executive Officer Josef Ackermann yesterday reiterated the company's target to expand its so- called stable businesses of money management and retail banking to offset a decline in investment banking. As part of today's deal, Deutsche Bank also plans to buy a minority stake in UFG Advisors, a hedge fund management company.

To contact the reporter on this story: Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net.

Last Updated: September 11, 2008 01:32 EDT