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* Despite interest, some investors express concerns
* IPO is big step in Deutsche's turnaround plans(Adds comment from KPMG in paragraph 12)
By Tom Sims, Hans Seidenstuecker and Arno Schuetze
The sovereign funds include
Deutsche Bank is finalising plans for the IPO of the assetmanagement business, known as DWS, that have been a year in themaking. Deutsche is expected to sell 25 percent of existing DWSshares for
DWS is seeking anchor investors, the person said, while italso wants to ensure the liquidity for the free floating shares.
Deutsche Bank's largest investors, the Qatari royal familyand the Chinese conglomerate HNA, are not expectedto invest in the IPO, said the person, who disclosed thepotential investor base on condition of anonymity because theIPO process is ongoing.
Spokesmen for
The DWS listing will mark the most tangible milestone yet inChief Executive Officer John Cryan's struggle to restructure theflagship German bank.
Deutsche said in March 2017 it would list a stake in DWS aspart of a broader overhaul to help the bank move on from astring of lawsuits and trading scandals.
Some investors have raised questions about the timing of theIPO as the economic growth cycle turns and financial marketsbecome more volatile.
"One of the key investor concerns regarding DWS is thequestion whether the asset management industry in general is atthe top of the cycle," said a second person close to the IPO.
The asset management industry is facing pressure on fees andrising regulatory costs, which show no signs of abating andwhich could limit profits for the sector.
"Asset management is under pressure from regulators,investors and the public to perform better and charge less,"said Tom Brown, Global Head of Asset Management at consultantsKPMG. "Firms need scale or to specialise to stay in the game."
These potential constraints come on top of issues specificto Deutsche Bank.
"Will DWS be able to cut costs as harshly as needed?" thesecond person close to the IPO said. "Will it be able to do aninteresting large M&A deal given the fact that DB wants toretain control?"
Another concern among investors is that Deutsche Bank coulddilute the price of DWS shares by selling down its stake if thebank needs to raise capital.
The IPO would help Deutsche to bolster its balance sheet andquell shareholder unrest over the pace of its turnaround afterthree consecutive years of losses. It could also possibly openthe way to dividend payouts.
A price range for the shares is expected to be announced assoon as Sunday, followed by the publication of an investorprospectus on Monday.
The IPO would likely take place in the week of March 19,sources have said, adding it had been brought forward hoping tolock in stock market valuations ahead of any correction.
DWS head Nicolas Moreau, formerly with the French insurerAxa, has been on the road for four weeks over the pastfew months drumming up investor interest and plans to meet withinvestors again next week.(Additional reporting by Simon Jessop in