With the IPO of Deutsche Bank asset management planned for next year, the division has to polish its appearance. The unit’s exchange-traded fund team has come up with some unusual measures for the Swiss division, according to information obtained by finews.com.
The signs at the Frankfurt headquarters of Deutsche Bank have been switched to green: preparations for the initial public offering of Deutsche Asset Management are shaping up in time for the first quarter of 2018.
In a first step, Deutsche Bank will sever its ties with the fund unit, according to Germany’s «Handelsblatt» (behind paywall). To make the company fully independent legally, 1,500 employees will need to change their employer – at least on paper. They won’t legally remain Deutsche Bank staff and instead become employees of Deutsche Asset Management.
That way, the number of staff at Deutsche Asset Management will increase to 4,000 from 2,500, the newspaper said.
Xtrackers Expansion Bid
The legally important shift of staff won’t much affect the Swiss business of Deutsche Bank. But a further measure closely linked to the IPO will have a tangible effect: the expansion of the Xtrackers index funds business.
Simon Klein, responsible for the distribution of passive investments in Europe, the Middle East, Africa and Asia-Pacific, told finews.com: «The ETF business Xtrackers is a strong pillar of growth within Deutsche Asset Management.» In other words, Xtrackers is extremely important to the organization as a whole, not least in respect to the IPO.
Xtrackers has had strong growth in the ten years of its existence – expanding to 245 index products with 75 billion euros in assets under management. Germany, Austria, the U.K. and Switzerland are core markets for the division, with Switzerland being the second-most important, according to Klein.
Hiring in Switzerland
Together with Sven Wuerttemberger, who’s responsible for the Swiss distribution, Klein plans to expand the staff in Switzerland. The distribution team currently has three members and will «certainly» grow in coming months, the two bankers said.
Wuerttemberger told finews.com that Swiss customers were strongly interested in ETFs. The former Blackrock executive now wants to prioritize private banks and wealth managers: «We see a clear trend toward using ETFs in fee-based advisory models.»
Guided Architecture
Focusing on these two segments also puts the Deutsche Asset Management customer relations on the spot. Wuerttemberger says that Xtrackers was well represented among product ranges offered at large firms. «We now want to make the products ever better known among relationship managers with the help of training courses.»
This is probably because of changes in how Swiss banks handle external products: more and more firms are switching from open architecture models to guided architecture, steering clients towards a smaller number of reputable products.
