The sale is designed to help Deutsche achieve chief executive Josef Ackermann’s goal of a 25% return on equity by the end of the year. Ackermann wants to position Deutsche to challenge the world’s top banks, including Citigroup and UBS.
Kian Abouhossein, a JP Morgan bank analyst, calculates that Deutsche’s UK fund business broke even last year or dipped into the red, after a string of client defections. He reckons Deutsche will get €1.1 billion (£759m) for the unit, or 1% of the €105 billion it has under management. Fund groups typically go for 2% of assets under management.
Deutsche’s global-fund business is the 11th largest in the world, with assets of more than $700 billion, according to consultant Watson Wyatt. Its top UK bond fund ranked first among 39 funds in the fourth quarter of 2004.