DWS Said in Talks to Sell Stake in Fund Platform to BlackFin

(Bloomberg) -- Deutsche Bank AG’s asset management arm DWS Group is in exclusive talks to sell control of its IKS fund platform to French private equity firm BlackFin Capital Partners, people familiar with the matter said.

BlackFin is holding final negotiations on terms of a potential deal for the IKS business, the people said, asking not to be identified because the information is private. The buyout firm is discussing a deal to pay in the region of 300 million euros ($362 million) for a majority stake in IKS, though terms of a transaction haven’t been finalized, one of the people said.

DWS, which is one of Europe’s largest asset managers, could announce an agreement as soon as the next few weeks, according to the people. Shares of DWS rose as much as 3%, the biggest intraday gain in more than two months. They were up 1.8% at 12:52 p.m. Friday in Frankfurt, giving the company a market value of about 7.4 billion euros.

The niche world of financial infrastructure has recently become a hotbed of dealmaking, as banks and asset managers seek to free up cash by divesting peripheral businesses. UBS Group AG agreed this week to sell its remaining holding in its fund platform to Deutsche Boerse AG, after offloading a majority stake last year.

Deal Hunt

Credit Suisse Group AG sold its third-party funds platform InvestLab in 2019 to Allfunds Group Plc, which recently completed an initial public offering and is now valued at about 8.4 billion euros.

Platforms like IKS typically offer investors access to a range of investment products, including exchange-traded funds, in one place. They also provide fund accounting and administration services for the asset managers.

DWS has been considering a sale of part or all of the business since last year, Bloomberg News has reported. The potential deal comes as DWS hunts for major acquisitions as part of its goal to become one of the world’s top 10 asset managers.

Asset-Light Model

IKS serves more than 2 million retail clients with about 115 billion euros ($139 billion) under administration. DWS plans to keep a stake in IKS after the transaction, the people said.

No final agreements have been reached, and talks could drag on longer or fall apart, the people said. A representative for DWS declined to comment. A spokesperson for BlackFin didn’t immediately respond to a request for comment.

BlackFin has four funds, including its latest buyout fund that raised 985 million euros in 2019, according to its website. It targets financial services investments in continental Europe, with a focus on asset-light businesses that aren’t heavily regulated.

The firm is led by four founding partners including Laurent Bouyoux, a veteran of the European banking sector who helped build out the derivatives businesses of Societe Generale SA and Commerzbank AG.

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