Swiss bank UBS is considering its options for its asset management unit, including a sale or merger of the business, according to a report by Bloomberg, citing people close to the matter.
As part of this evaluation, UBS is potentially lining up a deal to acquire Deutsche Bank’s asset manager DWS Group, to combine it with its own business and spin off the two as a separate entity.
The bank’s board is considering acquisitions and other ways to grow the unit, which manages around $800bn, in order to fight off competition from US rivals.
UBS and DWS declined to comment on the report.
The news comes after Citi analysts suggested the potential Deutsche Bank-Commerzbank merger could lead to the sale of the DWS arm.
If this is the case, UBS may not be the only asset manager considering a move DWS’s ETF business, Xtrackers. Europe’s largest asset manager Amundi will no doubt be sniffing around to boost itself up the ETF AUM rankings while the sale would offer a pure-play entry for providers such as JP Morgan, who are yet to launch a core ETF range.
DWS is Europe’s second largest ETF provider with around €80bn assets under management (AUM) and 170 Xtracker products.
The firm has been battling with Lyxor, which has €61bn AUM, for the number 2 spot in Europe behind iShares for some while with DWS regaining its crown last year.
However, with Societe Generale’s acquisition of Commerzbank’s ETF range last July, this puts Lyxor in a strong position once the two merge under the same brand.
Despite this, the DWS acquisition would see UBS leapfrog Lyxor by some distance into second spot in Europe. The firm runs €49bn assets in Europe, which would see the new business become the second ETF provider to break the €100bn barrier.