A hedge fund based in the U.S. has acquired a major stake in Deutsche Bank, the German banking giant. It comes as a welcome boost to the company.
By Shruti Advani, Editor-at-large, finews.asia
Hudson Executive Capital’s acquisition of a 3.1 percent stake in Deutsche Bank is the first thumbs up in a long time for the German lender. The deal, which was first reported in the «Wall Street Journal», puts the fund in the same league as the Chinese conglomerate which owns 7.7 percent, two Qatari funds that control 6.1 percent between them and asset manager Blackrock that bought 5 percent of the company.
Pat on the Back of Sewing
Coming as it did on the day the bank’s stock hit an all time low, the announcement that the fund, headed by veteran J.P. Morgan CFO Doug Braunstein, is backing the bank is also a pat on the back to newly-appointed CEO Christian Sewing.
«It’s very different from how the market reacted to John Cryan,» said a Deutsche Bank employee. «We seemed to inspire much less confidence then though the stock has recently been at an all-time low.»
Strategic Adjustments
Pilloried by shareholders and board members alike, Cryan was viewed as a cost-cutter rather than a leader. Sewing, on the other hand, has «clearly articulated the bank’s strategy to investors», according to an equity analyst. This included his commitment to pare down Deutsche‘s investment bank which has demonstrated in the past that it has a significant appetite for risk.
Sewing’s strategy will put renewed focus on the new set management business, including the high-net-worth and ultra-high-net worth wealth management businesses.
