By Arno Schuetze
FRANKFURT (Reuters) - Deutsche Bank (DE:DBKGn) plans to rebrand its asset management arm as DWS, the name of its main retail brand, and put a structure in place that gives the group full control even after the unit's planned stock market listing.
Germany's largest lender earlier this year announced plans to list a minority stake in Deutsche Asset Management, which sources say could achieve a total valuation of around 8 billion euros ($9.5 billion), as part of a broader overhaul following costly lawsuits and trading scandals.
On Tuesday, the bank said in a statement ahead of a capital markets day that during the first quarter of 2018 the asset management unit would assume the legal structure of a partnership limited by shares, or KGaA.
That structure ensures Deutsche Bank can retain control of the unit even if its shareholding falls below the 75 percent needed to dominate normal German stock corporations, possibly as part of a merger of the unit with a peer.
However, in the event Deutsche's holding falls below a certain - so far undisclosed - threshold, the unit will lose the KGaA status and become a normal stock corporation or AG.
Typically, such a threshold would be 50 percent.
Deutsche Bank's board member Karl von Rohr is poised to become chairman of the unit, while its 12-member supervisory board will include another 1-2 Deutsche Bank representatives, 4 labor representatives and 5-6 independent directors.
"We want to unlock the full potential of Deutsche AM to facilitate growth," unit head Nicolas Moreau said.
The listing will give the unit the ability to attract and retain talent by incentivising staff with bonus shares, although it is not targeting increasing overall pay. It will also enable the unit to use its shares to fund acquisitions.
The business is looking for ways to strengthen its so-called alternative products offerings, especially in areas such as structured credit and real estate asset management, bolster its distribution network and expand in countries such as Japan, Korea, Taiwan and Singapore.
Its management is, however, focused on add-on deals rather than large transformational ones.
Deutsche Asset Management currently has roughly 700 billion euros invested worldwide and is planning to add 3-5 percent to that annually. It saw outflows of 5.5 percent last year as worries about Deutsche Bank, dogged by a swathe of legal headaches, prompted some investors to shun the lender.
The unit, which offers 600 investment funds, is also targeting management fee margins of more than 30 basis points, an adjusted cost-income-ratio of less than 65 percent and a dividend payout ratio of 65-75 percent.
In the first nine months, the unit posted a management fee margin of 32 basis points. The business has 3,800 staff and aims to keep headcount stable.
($1 = 0.8436 euros)