DWS Group is an asset management company based in Germany. DWS is an abbreviation that stands for Deutsche Asset Management. The company was originally founded in 1956 as Deutsche Asset Management, which was the asset management division of Deutsche Bank. In 2017, Deutsche Asset Management was rebranded as DWS Group.
DWS Group is one of the leading asset management firms in Germany and Europe. The company manages investments across a range of asset classes, including equities, fixed income, real estate and alternative investments. DWS Group has a long history dating back over 60 years and has grown to become a global investment powerhouse.
The DWS initials originated from the company’s legacy name of Deutsche Asset Management. When the company rebranded to DWS Group in 2017, it decided to keep the well-known DWS abbreviation, which had brand recognition in the investment community. The DWS letters represent the company’s German heritage and roots as part of Deutsche Bank.
History of DWS Group
Here is an overview of the key events in DWS Group’s history:
- 1956 – Founded as Deutsche Asset Management, the asset management division of Deutsche Bank.
- 1971 – Launched first mutual fund in Germany.
- 1987 – Established first office outside of Germany in London.
- 1999 – Expanded to Asia Pacific with office in Hong Kong.
- 2002 – Opened offices in New York and Tokyo.
- 2005 – Acquired RREEF, a real estate investment manager.
- 2012 – Acquired a 40% stake in Harvest Fund Management, a Chinese asset manager.
- 2017 – Rebranded as DWS Group.
- 2018 – Listed on the Frankfurt Stock Exchange via an IPO.
As shown by the key milestones, DWS Group has evolved from a German focused asset manager to become a globally diversified investment firm. The company has strategically expanded into new markets and asset classes through acquisitions and organic growth.
Relationship with Deutsche Bank
DWS Group was originally founded as a division within Deutsche Bank. It operated as the asset management unit of Deutsche Bank for over 60 years. In 2017, Deutsche Bank made the decision to reposition DWS as an independent, publicly listed company.
In March 2018, DWS Group was listed on the Frankfurt Stock Exchange via an initial public offering (IPO). Deutsche Bank sold a minority 24.9% stake in DWS, while retaining a controlling 75.1% ownership. This partial IPO allowed DWS Group access to capital markets and provided it more autonomy.
While DWS became a stand-alone public company, Deutsche Bank maintained majority ownership and control. The two firms maintain a close strategic partnership. DWS Group continues to distribute its investment products through Deutsche Bank’s global network.
DWS Branding
In 2017, Deutsche Asset Management was rebranded as DWS Group. This involved a complete overhaul of the company’s brand identity and marketing.
Some key aspects of the new DWS branding included:
- Name change to DWS, retaining the well-known initials.
- New logo design featuring three cubes.
- New color palette of yellow and black.
- “We invest for a future worth living” tagline.
- Focus on digital and social media marketing.
The DWS rebranding aimed to portray the company as a modern, innovative and digital asset management firm. While evolving its branding, DWS Group strategically kept the DWS initials to capitalize on its strong name recognition globally.
DWS Group Business Model and Strategy
DWS Group operates with the following business model:
- Provides investment management services and solutions to institutional and retail clients globally.
- Offers a diverse range of active and passive investment products across asset classes and strategies.
- Generates management and performance fees from assets under management (AUM).
- Distributes products directly and through banks, brokers, financial advisors and other partners.
DWS Group’s corporate strategy focuses on:
- Growing assets under management by winning new client mandates.
- Expanding presence in key markets – Europe, Americas and Asia Pacific.
- Leveraging parent Deutsche Bank’s distribution network.
- Investing in new technology and digital capabilities.
- Pursuing strategic partnerships and acquisitions.
DWS Group’s Assets Under Management
DWS Group has over 700 billion euros in assets under management (AUM) as of 2022. The company’s AUM has grown significantly over the past decade, up from 315 billion euros in 2011.
DWS Group generates fees based on a percentage of its AUM total. Growing AUM allows DWS to earn higher revenues from its asset management services.
The table below shows DWS Group’s AUM growth since 2011:
Year | Assets Under Management (EUR billions) |
---|---|
2011 | 315 |
2012 | 328 |
2013 | 358 |
2014 | 370 |
2015 | 402 |
2016 | 407 |
2017 | 701 |
2018 | 671 |
2019 | 700 |
2020 | 793 |
2021 | 821 |
2022 | 718 |
The data shows a sizable growth in AUM over the past 10 years. DWS managed over 700 billion euros prior to the market volatility of 2022. Growing its client assets is critical for DWS Group to drive higher fee income.
DWS Group’s Financial Performance
As a publicly listed company, DWS Group reports its financial performance on a quarterly and annual basis. Some key metrics to assess DWS Group’s financials include:
- Assets under management (AUM)
- Net flows – Change in AUM from new client assets.
- Revenues – Management and performance fees.
- Profits – Net income and earnings per share.
- Cost/income ratio – Operating efficiency.
- Dividends paid to shareholders.
DWS Group has delivered steady AUM growth and rising profits over the past 5 years:
Financial Metric | 2017 | 2018 | 2019 | 2020 | 2021 |
---|---|---|---|---|---|
AUM (EUR billions) | 701 | 671 | 700 | 793 | 821 |
Net Flows (EUR billions) | -26 | 3 | 20 | 30 | 47 |
Revenues (EUR millions) | 2,411 | 2,285 | 2,389 | 2,718 | 2,723 |
Net Income (EUR millions) | 652 | 547 | 581 | 796 | 1,174 |
The numbers illustrate the asset growth and profitability achieved by DWS Group as an independent, listed company versus operating as a division within Deutsche Bank.
DWS Group Stock Performance
As a publicly traded company, DWS Group’s stock can be purchased on the Frankfurt Stock Exchange under the ticker symbol DWS. Here is an overview of DWS Group’s stock performance since its IPO:
- IPO price in March 2018 – €32.50 per share.
- Has traded between a range of ~€20 – €40 since IPO.
- Currently priced around €28 as of October 2022.
- Market capitalization of ~€5.5 billion.
DWS Group’s stock has delivered modest gains of 15-20% above its IPO level. Shareholders have benefited from steady dividend payouts, with a current dividend yield around 7%.
DWS Group’s Competition
DWS Group competes with other large global asset managers and financial services firms. Some of its main competitors include:
- BlackRock
- State Street Global Advisors
- Allianz Global Investors
- Amundi
- J.P. Morgan Asset Management
- UBS Asset Management
DWS positions itself as a top 10 global investment manager. While smaller than giants like BlackRock and Vanguard, DWS still manages over $700 billion in assets which gives it competitive scale.
DWS Group competes primarily based on its long track record, performance, client service, reach, and diverse product portfolio spanning various asset classes and strategies.
How DWS Competes with Passive Investing Trend
The asset management industry has experienced a major shift towards passive investing and index funds in the past decade. This has intensified competition, especially for active managers like DWS.
DWS Group’s main strategies to compete in a passive investing world include:
- Offering a mix of active and passive investment approaches.
- Focusing active managers on areas with alpha generation potential.
- Providing outcome-oriented solutions for clients.
- Using technology and data analytics to enhance investment processes.
- Investing heavily in ETF product development and distribution.
By adopting this multifaceted approach, DWS aims to retain and grow its Assets under Management in an increasingly index-focused and fee-sensitive investment landscape.
DWS Group’s Investment Capabilities and Solutions
DWS Group provides a diverse range of investment products and solutions across asset classes, sectors, and geographies. Here is an overview of DWS Group’s capabilities:
Asset Classes
- Equities – Global, regional, country, sector specific stocks.
- Fixed income – Government, corporate, high yield bonds.
- Alternatives – Real estate, infrastructure, private equity.
- Multi asset – Balanced portfolios with mixed asset allocation.
- Cash and liquids.
Investment Approaches
- Active – Funds with managers selecting investments to outperform benchmarks.
- Passive – Index tracking fund investments.
- Quantitative – Rules-based investment processes.
- Overlay and risk management strategies.
Product Types
- Mutual funds
- ETFs
- Segregated mandates
- Alternatives investments
- Retirement and pension solutions
This diversified mix of investment solutions allows DWS to meet the varied needs of institutional and retail clients across the globe. Clients can access investments across both public and private markets.
DWS Group’s Geographic Footprint
DWS Group has expanded its geographic presence significantly beyond its German roots. The company now operates in the following key regions and cities:
- Europe – Frankfurt, London, Paris, Milan
- Americas – New York, Los Angeles, Sao Paulo
- Asia Pacific – Hong Kong, Singapore, Sydney, Tokyo
In addition, DWS Group has major operational hubs in Poland, India, and Romania that provide back and middle office support functions.
DWS Group’s global distribution platform allows it to serve clients located across these regions. Its anchor within the European market gives DWS a strong foundation to grow its international business.
DWS Group’s Parent Company Ownership
DWS Group operates as an independent, publicly listed asset management company. However, Deutsche Bank maintains majority ownership and control of DWS Group.
Here are some key facts about DWS Group’s ownership structure:
- Listed on the Frankfurt Stock Exchange in 2018 via an IPO.
- Deutsche Bank sold 24.9% stake in IPO, while retaining 75.1% ownership.
- DWS Group has a free float stock capitalization of around 25%.
- Deutsche Bank control means DWS is consolidated in its financial reporting.
- DWS pays annual dividends to all shareholders, including Deutsche Bank.
While DWS Group operates as a stand-alone asset manager, Deutsche Bank can still exert control and influence over management and strategy as majority owner.
DWS Group’s Independence from Deutsche Bank
While Deutsche Bank is the parent company, DWS Group does function as an independent asset manager in the following ways:
- Has own executive management team and corporate governance.
- Makes investment decisions without influence from Deutsche Bank.
- Authority to pursue its own M&A and growth strategy.
- Rebranded with own distinct brand identity and marketing.
- Issued public stock and pays dividends to public shareholders.
DWS Group needs to balance its independence while leveraging its relationship with Deutsche Bank. This allows DWS to capitalize on Deutsche’s distribution reach while operating autonomously.
Conclusion
In summary, DWS stands for Deutsche Asset Management, representing the German roots and heritage of the company. DWS Group has evolved from a subsidiary division within Deutsche Bank to become a leading global asset manager.
The company has a diverse investment platform, strong growth in assets under management and a strategic focus on key markets like Europe, Americas and Asia Pacific. While operating independently, DWS Group still maintains close ties to majority shareholder Deutsche Bank.
DWS Group is positioned to continue growing by leveraging its brand, performance and distribution. The DWS initials will remain central to the brand as the company charts its future strategic course as a publicly listed asset management firm.