(Bloomberg) — Deutsche Bank AG's asset management arm, DWS Group, is considering selling its private equity business as part of a plan to exit under-performing areas.
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People familiar with the matter said DWS has offered the device to interested parties. Chief Executive Officer Stefan Hobbs said the company was considering a sale after determining it needed significant investment to operate elsewhere, according to the people, who spoke on condition of anonymity to discuss private information.
Secondary transactions involve the purchase of shares in private equity funds from existing investors who wish to exit. According to Campbell Lutyens & Co., trading volumes hit an all-time high last year, and they have gained popularity as a way to increase liquidity. A market where competitors move billions of dollars.
Hoops, which has conducted a comprehensive review of DWS since its acquisition six months ago, pledged on Wednesday to boost profitability and cut costs at a Frankfurt-based investment fund. It plans to divert resources to the best growth potential products, such as the company's suite of passive products known as Xtrackers and part of its options business.
A DWS spokesman declined to comment.
"Some of our platform segments are not as competitive as we would like them to be, in some cases due to a lack of volume, others due to a poor track record," Hobbs said on an earnings call in October. "This clearly provides opportunities for self-financing without any significant impact on our customers."
According to Bloomberg, Hoopes is focused on making DWS stock more attractive to investors and ultimately increasing its value. As part of that effort, DWS is considering the strength of the DWS brand outside the company's German market to make the company's complex legal structure more attractive to foreign shareholders, people familiar with the matter said.
While the second service providers segment is a spinoff of DWS, the CEO emphasized real estate and infrastructure finance as areas of growth.
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