Macquarie Said to Vie for Deutsche Bank Asset Divisions
Macquarie Group Ltd. (MQG), Australia’s biggest investment bank, is vying with at least three companies to buy asset-management divisions from Deutsche Bank AG (DBK), said two people with knowledge of the matter.
The deadline for second-round offers is next week, and the German lender plans to reach an agreement by mid-March, said the people, who declined to be identified as talks are private. Other bidders include JPMorgan Chase & Co. (JPM), State Street Corp. (STT) and Ameriprise Financial Inc. (AMP), people with knowledge of the matter said last month.
A purchase would help Macquarie build out its asset-management business beyond its 2010 purchase of Delaware Management Holdings Inc. from Lincoln National Corp. The businesses Deutsche Bank put up for sale have almost 400 billion euros ($523 billion) in assets under management, the people said last month.
“Macquarie should be interested in this asset,” said James Ellis, a bank analyst at Credit Suisse Group AG in Sydney. “It’s one of the areas of clear strategic thrust under Nicholas Moore,” Macquarie’s chief executive officer since 2008, Ellis said.
A Macquarie spokeswoman, Karen Smith, and Klaus Winker, a Deutsche Bank spokesman, declined to comment.
Profit at Sydney-based Macquarie’s asset-management division almost doubled in the six months ended Sept. 30 from the same period a year earlier, helping offset an 18 percent slump in trading income from the fixed-income, currencies and commodities units, the company said in October.
Deutsche Bank announced the review of the asset-management units, excluding the operations of the DWS mutual-fund units in Europe and Asia, in November. The divisions may fetch 1.5 billion euros to 2.5 billion euros, people with knowledge of the matter said last month. Deutsche Bank would prefer to sell the business as a whole, though it is also accepting offers for parts of the business, the people said.
The businesses for sale include DB Advisors, an institutional money-management unit, which has 163 billion euros in client assets; Deutsche Insurance Asset Management oversees 142 billion euros; the RREEF unit, which specializes in real-estate and infrastructure investments, has 45 billion euros; and DWS in the Americas has about 42 billion euros.
Deutsche Bank’s entire asset-management unit, including the DWS businesses being kept, reported nine-month pretax profit of 316 million euros, up 83 percent from the year-earlier period. Kevin Parker, head of asset management, cut costs and headcount by about a third from 2007 to 2010 while exiting businesses not considered strategically relevant to boost profit.
The German lender needs to raise 3.2 billion euros after Europe’s top regulator asked the region’s banks to bolster their capital buffers amid the sovereign debt crisis.
Macquarie, regulated by the Australia’s banking watchdog, had A$3.5 billion in capital surplus above minimum requirements, the bank said Oct. 28.