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Brazil's largest private bank Bradesco has acquired the local subsidiary of Germany's Deutsche Bank Investimentos DTVM, which manages 2.16bn reais (some US$1.1bn) in investment funds and portfolio administration, the companies said in a joint statement.
The price was not disclosed but was described as "lower than the international standard." The deal was in cash and will show up on Bradesco's books this month, Bradesco investor relations VP Luiz Carlos Trabuco Cappi told a conference call.
Deutsche Bank's 70 asset management funds in Brazil will be transferred to Bradesco's asset management unit Bram. The unit's 22 asset management employees are being "invited" to join the Bram team. The Deutsche brand will be maintained for an unspecified period.
Despite taking on board Deutsche's 1,000 asset management clients, Bradesco still does not surpass rival bank Itau in the Brazilian asset management sector, which exceeds Bradesco by about 2bn reais, Trabuco said. Itau acquired the asset management unit of UK-based Lloyd's Bank last year.
Federally-owned Banco do Brasil (BB) tops the sector, with Itau as the leader among private banks and Bradesco in second place with a 14% market share. Even with the acquisition, "significantly less" than 3% of Bradesco's assets are of international origin, Trabuco said.
The acquisition is totally unrelated to Deutsche Bank's online home broker subsidiary MaxBlue (www.maxblue.com.br), in which it has a 50.1% share with federally-owned Banco do Brasil (BB) having the rest. Bradesco will be able to sell Deutsche Bank as well as Bradesco funds through the site as an extra distribution channel, but no other relationship exists, the official said.
Bradesco expects to maintain a 100% retention rate of its new Deutsche Bank asset management clients, Trabuco added.
DB decided to sell the unit after a few years of searching for a local asset management firm to acquire, but found that 90% of them are tied to funds distribution, not purely asset management, DB asset management director David Gotlib told BNamericas.
DB had Latin American asset management operations only in Brazil. Profits from the sale to Bradesco will be simply injected into the bank's cash flow, he said, and have not been earmarked for any special purpose.