Industry Updates

DWS eyeing potential acquisition targets in crypto market

The German asset manager has commenced ‘due diligence’ on potential targets

Theo Andrew

Stefan Hoops

DWS said it is looking at potential acquisition targets in the crypto space following a drop in digital asset prices that have left “interesting opportunities” in the sector.

Stefan Hoops, CEO of the German asset manager, said in a recent earnings call the firm has started to “assess strategic partners and commence due diligence on potential targets”.

According to a Bloomberg report, the group is in talks to buy a minority stake in crypto exchange-traded product (ETP) issuer Deutsche Digital Assets (DDA), formerly Iconic, and market maker Tradias.

“Our teams have already started to assess strategic partners and commence due diligence on potential targets,” Hoops (pictured) told analysts on the call.

“The drop in market prices for digital assets could present interesting opportunities that bring us to the next level, and we are actively preparing to address the likely legal and regulatory challenges associated with a such new opportunity.”

Hoops said he expects to provide an update later in the quarter.

DDA rebranded from Iconic Funds last December and currently runs several crypto ETPs tracking bitcoin and ethereum as well as providing white-labelling services.

Tradias, owned by traditional market maker Bankhaus Scheich, is a service platform for cryptocurrencies and digital assets.

Hoops told analysts the firm is looking to build and develop new capabilities.

DWS has been striving to rebuild its reputation following greenwashing allegations last year.

The German asset manager has been subject to a probe by German and US regulators since its former group sustainability officer Desiree Fixler raised concerns about how its ESG practices.

Hoops said the firm had become a “public guinea pig” for ESG following the investigations and could not rule out the possibility of a large fine following the external investigation.

According to its latest set of results, investors pulled €19.9bn from the asset manager in 2022, with its passive arm Xtrackers accounting for €7.1bn of the outflows.

In January, DWS unveiled a seven-strong thematic ESG range tracking the United Nations Sustainable Development Goals, ETF Stream revealed.

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