Deutsche Bank Ag · XETR:DBK
Deutsche Bank — Investor Day (December 2017)
120 slides from Deutsche Bank's investor day presentation, Dec 5, 2017
Slide 1: Positioned for the future
Deutsche Asset Management Positioned for the future Capital Markets Day December 5, 2017
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements, including forward-looking statements related to our asset management business. Forward-looking statements are statements that are not historical facts; they include statements about our beliefs and expectations and the assumptions und
Slide 3: Capital Markets Day Agenda
Capital Markets Day Agenda Topic Speaker Time (UK) 1 Welcome and opening Dr. Robert Vollrath 11:00 – 11:10 1 Positioned for the future Nicolas Moreau 11:10 – 11:40 2 Investment platform and capabilities 11:40 – 13:00 a Investment platform Stefan Kreuzkamp b Traditional asset classes: Active & Passiv
Slide 4: Deutsche AM: Positioned for the future
Deutsche AM: Positioned for the future Excellent products and investment solutions designed to meet current and future 1 client needs 2 Global and balanced distribution reach across multiple channels to support growth 3 Scalable operating platform with digital capabilities Deutsche AM 4 Performance
Slide 5: Capabilities aligned with growth opportunities
1 Products 2 3 Capabilities aligned with growth opportunities 4 5 6 Market forecast (global) Deutsche AM Additional AuM (Sep-17, €bn) and Adjusted Revenue (9M-17, €m) Avg net flows Total AuM CAGR market AuM (2016-2021) (2016-2021) (2016-2021) 698 1,855 Passive 6% 11% €8.8tn Passive 10% 15% Alternati
Slide 6: Strong and consistent investment performance
1 Products 2 3 Strong and consistent investment performance 4 5 6 Investment outperformance Historical rolling % of total Active and Alternatives AuM outperforming benchmarks for the period(1) 3Y 5Y 76 76 80 71 67 71 70 72 2014 2015 2016 Sep-17 76% of AuM outperforming 73% 98% against 3-year benchma
Slide 7: Attractive client footprint, distribution and market share
1 2 3 Distribution Attractive client footprint, distribution and market share 4 5 6 AuM source by geography (Sep-17) APAC 5% Global footprint and scaled presence in key markets EMEA (ex Germany) Germany Resilient, well balanced retail / institutional mix 25% 42% €698bn Limited reliance on Deut
Slide 8: Global delivery from regional centers of excellence
1 2 3 Distribution Global delivery from regional centers of excellence 4 5 6 US Money Markets EMEA Liquid Real Assets Europe Equity Real Estate Global Fixed Income EU Fixed Income Home market and €17bn headquarters with EMEA €12bn Americas capabilities across asset classes and liquidity €467bn €193b
Slide 9: Track record of net flows and margin resilience
1 2 3 Distribution Track record of net flows and margin resilience 4 5 6 Net flows (% of BoP AuM) DB Group challenges / Return to Steady inflows management change growth 31bps 32bps 31bps 32bps ≥30bps 7.6% 7.1% 3% to 5% 4.6% 4.8% 2.8% 2.8% (4.8%) (5.5%) 2014 2015 2016 9M-17(1) Medium term target Tot
Slide 10: Strong platform providing operational leverage
1 2 3 Operations Strong platform providing operational leverage 4 5 6 Key achievements… …supporting ongoing cost and efficiency improvements Adjusted CIR Global investment platform Aladdin (4)pp 72% 70% Global end-to-end client 68% platform <65% Salesforce Top tier global trading hub 2015 2016 9M-17
Slide 11: Digital capabilities to drive growth and cost efficiencies
1 2 3 Operations Digital capabilities to drive growth and cost efficiencies 4 5 6 Big Data / Analytics Digital Distribution Operations Analytics for Analytics for AI investing – White-label robo Omni-channel Automation of predicting targeted machine based advisory mutual fund front-to-back behaviora
Slide 12: Building a performance culture to deliver our strategy
1 2 3 Building a performance culture to deliver our strategy 4 Culture & Team 5 6 Embedding a partnership model to attract, retain and motivate the best people … Excellence Entrepreneurship ‒ Investment approach ‒ Collective intelligence ‒ Research ‒ Agility ‒ Precision ‒ Efficiency ‒ Innovation and
Slide 13: Rebrand to enhance external profile
1 2 3 Rebrand to enhance external profile 4 Culture & Team 5 6 Deutsche Bank 12
Slide 14: Experienced and stable management team
1 2 3 Experienced and stable management team 4 Culture & Team 5 6 Investments Stefan Kreuzkamp Nicolas Moreau Pierre Cherki Chief Investment Head of Co-Head of Officer / Co-Head of Deutsche AM Investment Group Investment Group 29 1 22 19 20 20 Coverage Infrastructure Bob Kendall Thorsten Michalik Jo
Slide 15: Strategy to be the investment partner of choice
1 2 3 4 Strategy to be the investment partner of choice 5 Strategy 6 ‒ Maintain leading positions in Germany and EMEA Client ‒ Focused growth as multi-specialist in Americas coverage ‒ Expand coverage in APAC ‒ Continue delivering consistent investment outperformance Investment ‒ Grow Multi Asset an
Slide 16: DB plans for Deutsche AM to support strategy
1 2 3 4 DB plans for Deutsche AM to support strategy 5 Strategy 6 Governance to support strategy Goals of announced strategy ‒ KGaA(1) structure Enhance external profile for Deutsche AM ‒ Operational autonomy for Deutsche AM ‒ Facilitates Deutsche Bank’s regulatory compliance Leaner decision mak
Slide 17: Strong profit from revenue growth and cost discipline
1 2 3 Strong profit from revenue growth and cost discipline 4 5 6 Targets AuM growth AuM (€bn) +5% 660 716 692 698 Cost discipline Profit growth 584 Adjusted CIR Adjusted Profit Before Tax (€m) (3)pp 704 +21% Sep-17 9M-17 2013 2014 2015 2016 597 70% 71% 68% 495 x% CAGR 2013 – Sep-17 Stable margins M
Slide 18: Positioned to deliver shareholder value
1 2 3 Positioned to deliver shareholder value 4 5 6 Targets Strategy KPI 9M-17 Medium term financial targets Positioned to Net flows (% of BoP AuM) 2.8%(1) 3% to 5% capture net flows Management Consistent fee margin 32bps(1) ≥30bps margin resilience Adjusted Operational 68% <65% CIR leverage and cos
Slide 19: Deutsche AM: Positioned for the future
Deutsche AM: Positioned for the future Excellent products and investment solutions designed to meet current and future 1 client needs 2 Global and balanced distribution reach across multiple channels to support growth 3 Scalable operating platform with digital capabilities Deutsche AM 4 Performance
Slide 20: Contents
Contents 1 Positioned for the future 2 Investment platform and capabilities a Investment platform b Traditional asset classes: Active & Passive capabilities c Alternatives capabilities d Multi Asset & Solutions capabilities 3 Distribution a EMEA b Americas c APAC 4 Operating platform 5 Financial per
Slide 21: A truly global integrated platform
A truly global integrated platform Deutsche AM: European origin with a global perspective GERMANY ~400 Investment professionals APAC ~900 Investment professionals EMEA(1) ~100 AMERICAS ~250 ~150 Investment Investment professionals India Hong Kong 17 Countries Investment professionals professionals K
Slide 22: Stable investment team with long tenure and loyalty
Stable investment team with long tenure and loyalty Thematic coverage across asset classes Experienced team Business line view Staff tenure Alternative investment style Traditional investment style Other Alts 8% Fixed Income Infrastructure 3% Up to 5 years 17% 10+ years 33% 44% Liquid Real Active As
Slide 23: Global investment platform: a holistic view
Global investment platform: a holistic view Investment capabilities across all major asset classes, styles and solutions Traditional investment style ‒ Index replication ‒ Systematic investments ‒ Active share Multi Asset & Solutions ‒ Asset allocation Research ‒ Goal-based solutions ‒ Overlays Alte
Slide 24: Investment process: global, consistent and transparent
Investment process: global, consistent and transparent Integrated, transparent & client-oriented Accountability Research CIO View Portfolio Construction Portfolio Management Investment Consistent, transparent & Build efficient lead Implement portfolios in line recommendations repeatable decision-mak
Slide 25: Research & CIO View: integral to our investment process
Research & CIO View: integral to our investment process Research CIO View ‒ Macro drivers Macro ‒ Forecast: GDP, inflation, monetary & ‒ Macro-economic fiscal policy ‒ Financial market forecasts ‒ Single asset class outlook 500+ Fixed income ‒ Proprietary fundamental research ‒ Multi Asset allocatio
Slide 26: Portfolio Construction & Management: tailoring to strategy-specific requirements
Portfolio Construction & Management: tailoring to strategy-specific requirements Portfolio Construction Portfolio Management Key inputs Key inputs ‒ Expert knowledge & research ‒ Lead Portfolio serves as a guide for implementation ‒ Company visits & management interviews ‒ Client or product-specific
Slide 27: Investment Quality Management: identify & reveal sources of risk, skill and performance
Investment Quality Management: identify & reveal sources of risk, skill and performance Connecting performance, risk & investment process Key results & outcomes ‒ Review attribution of returns Cross-portfolio scan Liquidity / ‒ Evaluate research quality & (XPS) scores recommendations Positive and ne
Slide 28: Contents
Contents 1 Positioned for the future 2 Investment platform and capabilities a Investment platform b Traditional asset classes: Active & Passive capabilities c Alternatives capabilities d Multi Asset & Solutions capabilities 3 Distribution a EMEA b Americas c APAC 4 Operating platform 5 Financial per
Slide 29: Traditional asset classes: from replication to active share
Traditional asset classes: from replication to active share The investor’s rationale: alpha & beta vehicles for every market trend Easy market access, liquidity, Smart beta Active share cost-efficiency, replication Quant investing Stock & bond selection Core Beta Pure Alpha AuM by style AuM by asset
Slide 30: Passive overview
Passive overview €107bn AuM 18 years of index replication experience ~60 investment professionals AuM by asset class AuM by product type Key highlights Multi Asset(1) / Other Commodities 3% Cash 1% 3% #2 #6 Institutional ETF / ETP ETF / ETP Fixed Mandates in Europe(2) globally(2) Income 27% 26% €107
Slide 31: Passive tracking accuracy
Passive tracking accuracy Process to strive for best in class tracking products Index analysis Portfolio construction & trading Portfolio & index monitoring ‒ Ex-ante analysis of the ‒ Replication methodologies (synthetic & ‒ Index monitoring benchmark physical) ‒ Corporate actions monitoring ‒ Asse
Slide 32: Well positioned against passive industry trends
Well positioned against passive industry trends Full-range offering, differentiating through innovation and specialities Cumulative Net flows AuM net flows 9M-17 Sep-17 Europe / Product type Description 14-16 in €bn in €bn in €bn APAC US Replication of traditional Differentiate Core Beta 11.7 5.6 72
Slide 33: Core Beta
Core Beta Key facts Capabilities ‒ Core ETFs: Major benchmarks, physical replication OUR ALMOST WORK IN ‒ Customized mandate solutions STRENGTHS THERE PROGRESS ‒ ~250 benchmarks accessible via ETFs ‒ EQ indices (global, ‒ Extend fixed ‒ Increase fixed ‒ 50 Funds with 4&5 Morningstar stars(1) regiona
Slide 34: Beta Plus, Strategic Beta and Specialities
Beta Plus, Strategic Beta and Specialities Key facts Capabilities ‒ Development of innovative Strategic Beta products OUR ALMOST WORK IN ‒ Thought leadership: Passive Insights STRENGTHS THERE PROGRESS ‒ 17 Funds with 4&5 Morningstar stars(1) ‒ Broad offering of ‒ Thematic ETFs ‒ Differentiate with f
Slide 35: Active overview
Active overview €517bn AuM(1) >60 years investment heritage ~450 investment professionals AuM by asset class AuM by distribution channel Key highlights Multi Asset(1) Systematic & Quantitative 11% Fixed Income 49% Retail 40% #1 #4 Retail Germany(2) Retail Europe(3) 10% €517bn €517bn Equity 19% 27% 9
Slide 36: Well positioned against active industry trends
Well positioned against active industry trends Quality of flows is improving, strategy to focus on Multi Asset is delivering Strong investment performance(1) Growth in higher margin products Management 73% Cumulative Net flows AuM fee margin net flows 9M-17 as of Sep 30, 9M-17 Product type 2014-16 i
Slide 37: Fixed Income
Fixed Income Key facts Capabilities ‒ Global team of >200 research & investment professionals OUR ALMOST WORK IN ‒ Research universe: >1,750 issuers >1,400 structured STRENGTHS THERE PROGRESS finance transactions ‒ Euro Government ‒ Global ‒ Illiquid fixed ‒ 26 Funds with 4&5 Morningstar stars(1) bo
Slide 38: Cash
Cash Key facts Capabilities ‒ Global team of >20 research and investment professionals OUR ALMOST WORK IN ‒ Research universe: >400 issuers(1) , company limit control STRENGTHS THERE PROGRESS system ‒ ESMA compliant ‒ Official fund rating ‒ Trade receivables money market funds of product range as a
Slide 39: Equity
Equity Key facts Capabilities ‒ Global team of >100 research and investment professionals OUR ALMOST WORK IN ‒ Research universe: >800 issuers STRENGTHS THERE PROGRESS ‒ 34 Funds with 4&5 Morningstar stars(1) ‒ Global equity income: ‒ Income product ‒ ESG equity dividend strategies suite: US & Japan
Slide 40: Equity: strong alpha & income generation
Equity: strong alpha & income generation Examples of long term superior performance delivered to our clients Global equity blend European equity German equity Emerging Markets equity DWS Akkumula Deutsche Invest I Top Euroland DWS Deutschland Deutsche Invest I Global EM (Morningstar) (Morn
Slide 41: Systematic & Quantitative Investments
Systematic & Quantitative Investments Key facts Capabilities ‒ Global team of >60 research and investment professionals OUR ALMOST WORK IN ‒ 3 distinctive quantitative investment processes with 19 STRENGTHS THERE PROGRESS proprietary models (i.e. optimizer, selection) ‒ CROCI: systematic ‒ Risk-fact
Slide 42: Contents
Contents 1 Positioned for the future 2 Investment platform and capabilities a Investment platform b Traditional asset classes: Active & Passive capabilities c Alternatives capabilities d Multi Asset & Solutions capabilities 3 Distribution a EMEA b Americas c APAC 4 Operating platform 5 Financial per
Slide 43: Alternatives overview
Alternatives overview €74bn 45+ years #11 AuM Investment heritage Global real estate platform(1) AuM by asset class AuM by region AuM by client type (2) €74bn €74bn Private Equity Other 6% 2% Real Retail Institutional Estate 35% Infrastructure 43% Americas 36% 64% 56% 12% 16% €74bn EMEA €74bn (ex Ge
Slide 44: Alternatives: well positioned as a growth business
Alternatives: well positioned as a growth business Key hallmarks ‒ €74bn in AuM Leading alternatives ‒ Comprehensive alternatives platform with proven record: manager with a long term ‒ #11 real estate manager globally(1) track record ‒ #3 infrastructure securities and #8 global real estate securiti
Slide 45: AuM growth and investment outperformance
AuM growth and investment outperformance AuM Investment performance Deutsche AM global alternatives AuM (in €bn) 5.9% 74 98% Global Alternative AuM outperforming(1) 59 100% Direct Real Estate AuM outperforming(1) 100% Direct Infrastructure AuM outperforming(1) 2013 // Sep 30, 2017 x% CAGR 2013 – Sep
Slide 46: Strongest focus on high growth and stable revenue areas of alternatives
Strongest focus on high growth and stable revenue areas of the global alternatives markets Alternatives landscape 12.0% Strong Deutsche AM focus Infrastructure Securities(1) Direct Infrastructure Deutsche AM presence Infrastructure Infrastructure Debt Bubble size indicates estimated 10.0% Private eq
Slide 47: Primary focus on Direct Real Estate, Direct Infrastructure and Liquid Real Assets
Primary focus on Direct Real Estate, Direct Infrastructure and Liquid Real Assets Direct Real Estate Direct Infrastructure Liquid Real Assets Retail Client mix 2% Retail Institutional Institutional Retail Institutional 34% 66% 98% 63% 37% €41bn €9bn €18bn Physical Assets Physical Assets Securities A
Slide 48: Direct Real Estate
Direct Real Estate Key facts Capabilities ‒ #11 global real estate manager(1) OUR ALMOST WORK IN ‒ 45 years of fiduciary experience STRENGTHS THERE PROGRESS ‒ 1,000+ properties and 13m+ square meters ‒ Equity: Core real ‒ Americas: CPIF(5) ‒ Americas: ‒ 365+ institutional clients across 20 countries
Slide 49: Direct Infrastructure
Direct Infrastructure Key facts Capabilities ‒ Regional strategies in both infrastructure equity and debt OUR ALMOST WORK IN ‒ 84 direct infrastructure acquisitions since 1994 STRENGTHS THERE PROGRESS ‒ 44 assets currently under management ‒ Equity: Core infrastructure ‒ US: Expanding ‒ US: Gaining
Slide 50: Liquid Real Assets
Liquid Real Assets Key facts Capabilities ‒ With €18 billion AuM, one of the world’s largest liquid real OUR ALMOST WORK IN asset managers STRENGTHS THERE PROGRESS ‒ #3 infrastructure securities and #8 global real estate securities manager(1) ‒ Global real estate ‒ Growing real asset ‒ Refining secu
Slide 51: Focused growth businesses within Alternatives
Focused growth businesses within Alternatives Sustainable Investments, Hedge Funds, and Private Equity AuM breakdown by business as of Sep 30, 2017 Sustainable Investments ‒ Private debt and equity investment solutions with emphasis on social and environmental impact Sustainable investing Hedge Fund
Slide 52: Contents
Contents 1 Positioned for the future 2 Investment platform and capabilities a Investment platform b Traditional asset classes: Active & Passive capabilities c Alternatives capabilities d Multi Asset & Solutions capabilities 3 Distribution a EMEA b Americas c APAC 4 Operating platform 5 Financial per
Slide 53: Multi Asset & Solutions
Multi Asset & Solutions Leveraging capabilities across the global investment platform - well setup to compete for growth Core Traditional Multi Asset investment style 13 Strategies Total Return Funds with Combination of asset classes to Income 4&5 MS stars(1) follow specific investment strategies €5
Slide 54: Multi Asset
Multi Asset Key facts Capabilities ‒ Global team of >50 research and investment professionals OUR ALMOST WORK IN ‒ Dedicated cross-asset strategy based on CIO View single- STRENGTHS THERE PROGRESS asset class research ‒ Multi Asset total ‒ Multi Asset ‒ Multi Asset total ‒ 13 Funds with 4&5 Mornings
Slide 55: Solutions – leveraging the Deutsche AM platform
Solutions – leveraging the Deutsche AM platform Insurance / PM Solutions / Asset-Liability Overlay Pension Asset Allocation Structuring Management (Risk / ESG) Solutions Advisory B Solutions Advisory A Virtual Solutions C Solutions Platform Less formalized; may involve Central point of contact coord
Slide 56: Solutions
Solutions Solution strategies for client needs that traditional asset classes do not address Defined contribution Optimal diversification Allocation & selection Taylor-made, bespoke Actively manage risk Client needs products and allocation advisory solutions exposure Balance sheet Defined targets fo
Slide 57: Example: efficient Multi Asset Portfolio Solutions (eMAPS)
Example: efficient Multi Asset Portfolio Solutions (eMAPS) Asset allocation Efficient portfolios Flexible solution Alignment to CIO View from multi Deutsche AM Return asset perspective model portfolio advice State-of-the-art portfolio optimization Risk profiling Allocation & selection advisory Risk
Slide 58: Example: Environmental, Social & Governance
Example: Environmental, Social & Governance What it means(1) Why investing into capabilities? Assets in ESG globally across the AM industry (in $trn)(2) E nvironmental S ocial G overnance +21% 45 CAGR Resources & waste Human capital Business ethics 23 19 13 Climate change Society Corporate governanc
Slide 59: Investment platform positioned for the future
Investment platform positioned for the future Industry trends Our way forward Macro ‒ Protect core strengths and deliver on next generation Active, Passive & ‒ Low rates driving demand for yield, and Alternatives margin pressure ‒ Capitalize on highly scalable & automated platform to fully participa
Slide 60: Key takeaways
Key takeaways Truly global integrated investment platform: 60+ years Active track record, 18+ years index replication experience and 45+ years Alternatives heritage Investment capabilities positioned for the future: Alternatives, Passive, next generation Active and Solutions / Multi Asset capabiliti
Slide 61: Contents
Contents 1 Positioned for the future 2 Investment platform and capabilities a Investment platform b Traditional asset classes: Active & Passive capabilities c Alternatives capabilities d Multi Asset & Solutions capabilities 3 Distribution a EMEA b Americas c APAC 4 Operating platform 5 Financial per
Slide 62: Trends impacting distribution
Trends impacting distribution Global asset management industry Key trends Avg net flows, Global industry AuM (€tn) 2016-2021 Client channel Asset class ‒ Changing regulatory landscape 3.3% Passive 4.7% 67 6% Multi Asset ‒ Institutionalization of retail channel 5% 27 3.7% Alternatives 44 4% ‒ Evolvin
Slide 63: Global distribution network overview
Global distribution network overview Global network Balanced client coverage Diversified client base(2) Regional view, FTE Channel view, FTE Channel view, number of clients >€1m AuM Institutional Retail Germany Americas Americas 32% 37% 27% 34% 66% Institutional 53% Germany APAC 36% 11% ~340 ~340 EM
Slide 64: The business maintains a diversified distribution platform
The business maintains a diversified distribution platform Retail / Institutional (AuM in €bn) Regional (AuM in €bn) Client concentration(1) AuM (as of Sep 30, 2017) 660 716 692 698 660 716 692 698 31% 31% 30% 28% 32% 42% 44% 44% 45% 9% 25% 25% 25% 12% 25% €698bn 58% 56% 56% 55% 38% 40% 42% 37% 48%
Slide 65: Historical net flows have varied by region
Historical net flows have varied by region Net flows by region (€bn) 2014 2015 2016 2017 15 13 2 1 6 9 8 1 6 6 0 9 5 3 5 5 2 4 0 2 9 1 2 1 0 4 3 4 4 3 2 2 2 1 1 0 0 1 0 2 0 1 1 2 0 2 0 (1) (1) 0 (1) (2) (3) (3) (4) (5) (0) (2) (7) (8) (3) (11) (2) (3) (4) (1) 0 (4) (8) (8) 0 0 (3) (12) (12) Q1-14 Q2
Slide 66: Strong and diversified retail distribution network
Strong and diversified retail distribution network Overview Diversified retail intermediary network AuM (as of Sep 30, 2017) AuM ‒ Deutsche AM is a global asset manager with the majority Retail intermediaries (€bn) of the assets sitting with third party clients DB retail 1 DB network 69.0 network ‒
Slide 67: A strong brand and marketing approach based on No.1 position in German market
A strong brand and marketing approach based on No.1 position in German market #1 in Quality of Marketing #1 in Brand Awareness #1 amongst Institutional Investors 2017 Financial Advisors(1) 2017 Private Investors(2) 2017 Brand Recognition(3) 2017 Service Quality(3) DWS / Deutsche AM 89 pts DWS / Deut
Slide 68: Successful marketing in the digital age
Successful marketing in the digital age Overview New ways of client interaction Content Formats Channels E-mail ‒ Develop content and tell stories Classic Newsletter CIO View Videos ClientCalls ‒ Create engagement with clients Websites Facebook / Twitter Presentations YouTube Education Social Media
Slide 69: Embracing the platform economy – case study
Embracing the platform economy – case study Deutsche AM fund platform (‘IKS’) ‒ Fund platform with strong IT backbone offering account and custody services ‒ Serves institutional clients, distribution partner and retail end clients €100bn 1.5m 430 3,300 #1 #5 AuA End client Distribution Available Pl
Slide 70: Contents
Contents 1 Positioned for the future 2 Investment platform and capabilities a Investment platform b Traditional asset classes: Active & Passive capabilities c Alternatives capabilities d Multi Asset & Solutions capabilities 3 Distribution a EMEA b Americas c APAC 4 Operating platform 5 Financial per
Slide 71: European AM industry: huge growth opportunities
European AM industry: huge growth opportunities Amount of non-invested assets(1) The European industry is still small(2) GDP in 4,000 Germany $bn Life insurance UK Cash 3,000 Pension €7.1tn 2,000 Italy funds Spain Savings accounts & 1,000 Switzerland term deposits Mutual funds Securities & 0 derivat
Slide 72: Germany Retail
Germany Retail Highlights AuM The market leader in German retail AM Alternatives Fixed Direct 8% Income 2% €162bn 83 187 Passive 13% 13% DB Network 32% AuM Sales professionals(1) Number of clients(2) Cash Active €162bn €162bn 2% 79% #1 in unit linked products with #1 in German MF market #1 Retail AM
Slide 73: EMEA (ex Germany) Retail
EMEA (ex Germany) Retail Highlights AuM A market leader in EMEA (ex Germany) retail AM Alternatives 2% Fixed Income DB Network €86bn 18% 41 8 18% AuM Sales professionals(1) Countries Equity Passive 15% €86bn €86bn 49% Active #4 #2 373 Multi 49% Retail AM EMEA(2) ETF / ETP Europe(3) Number of clients
Slide 74: EMEA Institutional
EMEA Institutional Highlights AuM A tier 1 solutions provider in EMEA institutional AM Alternatives 10% Fixed Sovereigns DB network & non profit 2% Income €219bn 78 11 Passive 12% 45% Financial Institutions/ 12% Insurance 33% AuM Sales professionals(1) Countries Central Banks €219bn €219bn Cash 13%
Slide 75: EMEA selected case studies
EMEA selected case studies Retail Cases Institutional Cases German financial advisory firm Southern Europe IST Global Real Estate Fund German insurance company Italy ‒ Deutsche AM and IST provide ‒ Client faced a complex ‒ Well-established partnership ‒ With €21.6bn AuM ranked #8 Swiss pension funds
Slide 76: Contents
Contents 1 Positioned for the future 2 Investment platform and capabilities a Investment platform b Traditional asset classes: Active & Passive capabilities c Alternatives capabilities d Multi Asset & Solutions capabilities 3 Distribution a EMEA b Americas c APAC 4 Operating platform 5 Financial per
Slide 77: Americas distribution snapshot
Americas distribution snapshot Americas opportunity #4 European Asset ~800 Retail and Institutional clients ‒ Industry and organizational challenges have hindered Manager in US(1) growth AuM (€bn) Net flows (€bn) ‒ 2016 refocus and momentum shift in 2017 0 207 231 208 193 0 2 3 ‒ Positioned to deliv
Slide 78: Americas Retail
Americas Retail Highlights AuM A multi-specialist provider in Americas retail AM DB Network Alternatives Fixed 1% Income Direct 13% 28% €52bn 23% 67 4 Passive AuM Sales professionals(1) Offices 20% €52bn €52bn Active #5 Liquid Real Assets #14 ETF / ETP 393 Cash 66% Americas(2) Americas(3) Number of
Slide 79: Americas Institutional
Americas Institutional Highlights AuM An established solutions provider in Americas institutional AM Sovereigns Alternatives Fixed & non profit 13% Income DB network 4% €141bn Passive 59% 5% 26 8 4% Financial Institutions AuM(1) Sales professionals(2) Offices 11% Cash €141bn Pensions €141bn 18% 12%
Slide 80: Americas selected case studies
Americas selected case studies Retail Case 1 Retail Case 2 Institutional Case 1 Institutional Case 2 Wealth advisor Wealth advisor Mutual insurance Municipal pension (Private bank) (Broker dealer) company provider Customized approach delivers Became an emerging partner in Client since 1985 decided t
Slide 81: Contents
Contents 1 Positioned for the future 2 Investment platform and capabilities a Investment platform b Traditional asset classes: Active & Passive capabilities c Alternatives capabilities d Multi Asset & Solutions capabilities 3 Distribution a EMEA b Americas c APAC 4 Operating platform 5 Financial per
Slide 82: APAC distribution snapshot
APAC distribution snapshot APAC AM industry(1) Significant growth opportunities APAC industry AuM ($tn) Expected outsourced institutional ‒ Large majority of billionaires in assets ($tn) Asia is first generation and ~120 CAGR CAGR 12.9 people will hand over $400bn to 9% 4.5 11% their heirs(2) ‒ High
Slide 83: APAC Retail
APAC Retail Highlights AuM Targeted approach utilizing intermediary partners to penetrate key segments Fixed DB Network Direct Income 4% 1% €11bn Alternatives 34 4 39% 38% AuM Sales professionals(1) Countries Active €11bn €11bn 54% #1 China benchmark A-share #1 ETF issuer on 122 ETFs listed in US &
Slide 84: APAC Institutional
APAC Institutional Highlights AuM Alternatives Corporates DB Network Provider of a comprehensive suite of solutions to serve a diverse client base 22% Fixed Income 3% 1% Financial 65% Insurance Institutions / €27bn 11 6 Passive 1% 18% Central Banks AuM Sales professionals(1) Countries Cash 3% €27bn
Slide 85: APAC selected case studies
APAC selected case studies Retail Case Institutional Case Large Thai asset manager Bureau of Labor Funds, Taiwan (BLF) ‒ A landmark €1bn AuM was reached after just one year of ‒ A strong partnership which started with one mandate in 2015 strategic partnership has subsequently been extended to three
Slide 86: Harvest Fund Management
Harvest Fund Management Harvest background AuM evolution and breakdown (€bn)(2) ‒ Jointly owned by Deutsche AM (30%), China Credit Trust and Lixin +31% CAGR ‒ Capabilities across Active, Passive and Alternatives asset 113 management, with a focus on Chinese assets ‒ Extensive onshore retail distribu
Slide 87: Key takeaways
Key takeaways Very strong retail brand in Europe where 9M-17 net flows were 5% of AuM A broad product offering across Active, Passive and Alternatives to serve a well diversified client base Truly global business with ~60% of assets outside of Germany and 12% of assets with DB network Strong global
Slide 88: Contents
Contents 1 Positioned for the future 2 Investment platform and capabilities a Investment platform b Traditional asset classes: Active & Passive capabilities c Alternatives capabilities d Multi Asset & Solutions capabilities 3 Distribution a EMEA b Americas c APAC 4 Operating platform 5 Financial per
Slide 89: Key messages
Key messages We have already built a robust and scalable operating platform … … but we have further room to optimize and increase efficiency With scale and a track record of execution, we are able to navigate significant disruption to our industry Our platform is an integral part of our business pro
Slide 90: We have already built a robust and scalable operating platform
We have already built a robust and scalable operating platform… Global investment platform Global customer management Global trading: top tier model ‒ Global investment and risk ‒ Globally standardized CRM platform ‒ Centralized trading activity out of management for all institutional clients portfo
Slide 91: …but we have further room to optimize and increase efficiency
…but we have further room to optimize and increase efficiency Business support Front-to-back process ‒ Implement a more efficient infrastructure organization ‒ Simplify and automate processes and ensure global standards ‒ Internalize certain technology contractors ‒ Standardize operating model ‒ Rat
Slide 92: Relationship with DB Group
Relationship with DB Group Service examples Operations ‒ Transaction processing Technology ‒ Data center Risk ‒ Cyber and information security Deutsche AM Finance ‒ Accounting and reporting Master Service Human Agreement Resources ‒ Payroll services Legal ‒ Litigation Compliance & AFC ‒ Position rep
Slide 93: With scale and a track record of execution, we are well placed to navigate change
With scale and a track record of execution, we are well placed to navigate significant change to our industry Challenges Our differentiating factors Dedicated regulatory expertise within Deutsche AM Increased regulatory supplemented by Group resources ~230 Legal, Risk and scrutiny Track record o
Slide 94: Our investment in technology positions us well for the future
Our investment in technology positions us well for the future Digital framework Applications Design User Omni-channel Robo language interface fund platform advisory Edison WISE Application Data services architecture Marketing Client data Big data Process platform analytics analytics automation Light
Slide 95: Key takeaways
Key takeaways We have already built a robust and scalable operating platform … … but we have further room to optimize and increase efficiency With scale and a track record of execution, we are able to navigate significant disruption to our industry Our platform is an integral part of our business pr
Slide 96: Contents
Contents 1 Positioned for the future 2 Investment platform and capabilities a Investment platform b Traditional asset classes: Active & Passive capabilities c Alternatives capabilities d Multi Asset & Solutions capabilities 3 Distribution a EMEA b Americas c APAC 4 Operating platform 5 Financial per
Slide 97: Key messages
Key messages Steady net flows, except 2016, and well positioned to capture stronger net flows in the future Diversified asset base with higher margin products positioned for growth, providing resilience to margin compression and supporting revenue growth and profitability Disciplined costs with room
Slide 98: Financial performance snapshot
Financial performance snapshot x% y-o-y change Adjusted profit before tax (€m) AuM (€bn) Consistent profit and adjusted CIR improvement Return to asset growth 72 70 71 68 19 (40) 15 (3)% (3)% +1% 728 704 +21% 716 692 698 597 495 2015 2016 9M-16 9M-17 2015 2016 Sep-17 x Adjusted CIR (%) x Net flows (
Slide 99: Positioned to deliver shareholder value
Positioned to deliver shareholder value Medium term 9M-17 Positioning to deliver targets financial targets Net flows ‒ Steady net flows of ~3-5% p.a. (ex 2016) 2.8%(1) 3% to 5% (% of BoP AuM) ‒ Product and distribution strength ‒ Diversified asset base Management 32bps(1) ≥30bps ‒ Recent flows conce
Slide 100: Strong net flows except for 2016
Strong net flows except for 2016 AuM (€bn) AuM development detail (€bn) FY: ~(6)% ~3% of AuM(1) of AuM 0 716 FY: ~3% of 34 3 AuM 15 +5% 15 23 1 698 692 716 692 698 5 (5) 35 19 660 (40) (31) FY: ~5% 660 of AuM 584 (16) 30 €31bn or ~7% of €(23)bn or ~(5)% €17bn or ~5% of AuM ex Cash & of AuM ex Cash A
Slide 101: Net flows have been strong in passive, active multi asset and alternatives
Net flows have been strong in passive, active multi asset and alternatives Historical net flows vs management fee margin Cumulative Mgmt fee Net flows % of BoP AuM(1) net flows Net flows margin (’14 ‒ ’16, (9M-17, (9M-17, Product type €bn) €bn) bps) Cumulative net flows (‘14 – 9M-17, €bn) Active (7.
Slide 102: Growing revenues in focus areas and maintaining margins
Growing revenues in focus areas and maintaining margins x Management fee margin (bps) x% y-o-y change AuM (€bn) and adjusted revenue (€m) 75 76 Equity 526 8% 570 698 1,855 Active 14% Equity 45 42 Multi Active 31% 32% 8% Asset 137 180 Multi Asset Active SQI 7% 24 28 Active 10% SQI 7% 117 125 Active 7
Slide 103: Limited reliance on one-off fees, leading to a stable revenue base
Limited reliance on one-off fees, leading to a stable revenue base Adjusted revenues(1) (€m) Performance & transaction fee breakdown (€m) Other revenues ‒ Performance and transaction fees represent <10% of annual revenues Performance and transaction fees ‒ Real estate and infrastructure funds make u
Slide 104: Significant revenue upside opportunities
Significant revenue upside opportunities Adjusted revenues (€bn) 2.4 Selected initiatives Excellent products and investment solutions: ‒ Continue to build out next generation active (systematic / quant strategies / multi asset), passive (ETF and mandates) and alternatives (focused on credit, liquid
Slide 105: Compensation cost control
Compensation cost control Adjusted compensation & benefits (€m) FTE ‒ Compensation and benefits cost discipline in 2016 is (Period-end) 3,907 3,892 3,883 3,830 driven by FTE efficiency measures and the Group-wide compensation measures Comp & ben €220k €179k €178k(2) €200k(2) per FTE(1) ‒ Normalized
Slide 106: General expense discipline
General expense discipline Adjusted general and administrative expenses (€m) ‒ ~70% of 9M-17 general expenses made up of banking & transaction (3)% charges, professional services, IT, communications, occupancy, Banking & marketing, T&E, regulatory, tax & 1,040 Other(1) transaction / 969 11% insuranc
Slide 107: Potential for further efficiency improvements
Potential for further efficiency improvements Adjusted costs (€bn) x Adj CIR (in %) 70% <65% 1.7 Selected initiatives Create operational leverage from synergies through ‒ Business support / operations review ‒ Technology internalization ‒ Global footprint & real estate review ‒ Market data review ‒
Slide 108: A simple balance sheet
A simple balance sheet Economic view as of September 30, 2017 Assets (€bn) Liabilities and equity (€bn) Other 9.0 9.0 includes deferred income taxes and equity 0.3 0.5 Short-term borrowings method investments (Harvest) 0.1 DB intercompany funding 0.6 0.7 Loans 1.0 includes cash balances held at DB G
Slide 109: Prudent regulatory capital position
Prudent regulatory capital position Regulatory capital position as of Sep-17 (€bn) Highlights 6.2 ‒ Deutsche AM will be regulated as a CRR Investment Firm(1) ‒ Level of capital is driven by Pillar 2 (ICAAP) requirements being above Pillar 1 due to wider risk coverage and different methodologies ‒ Ex
Slide 110: Significant distribution potential: 65-75% of net income paid out as dividend
Significant distribution potential: 65-75% of net income expected to be paid out as dividend Dividend payout ‒ Target competitive dividend payout ratio of 65-75% Target dividend payout ratio 65-75% Undistributed earnings ‒ Organic business growth ‒ Increase in seed capital Undistributed investments
Slide 111: Key takeaways
Key takeaways Steady net flows, except 2016, and well positioned to capture stronger net flows in the future Diversified asset base with higher margin products positioned for growth, providing resilience to margin compression and supporting revenue growth and profitability Disciplined costs with roo
Slide 112: Contents
Contents 1 Positioned for the future 2 Investment platform and capabilities a Investment platform b Traditional asset classes: Active & Passive capabilities c Alternatives capabilities d Multi Asset & Solutions capabilities 3 Distribution a EMEA b Americas c APAC 4 Operating platform 5 Financial per
Slide 113: Deutsche AM: Positioned for the future
Deutsche AM: Positioned for the future 1 Excellent products and investment solutions designed to meet current and future client needs 76% of AuM outperforming 3-year benchmarks and best in class tracking error in passive investing Diversified asset mix: one of two players with top 20 positions a
Slide 114: Appendix
Appendix
Slide 115: Financial Glossary
Financial Glossary Terminology Definition We define Assets under Management (AuM) as (a) assets we hold on behalf of customers for investment purposes and / or (b) client assets that are managed by us on a discretionary or advisory basis. AuM represents both collective investments (Mutual Funds, Exc
Slide 116: Reconciliation from Deutsche AM reported segment to adjusted standalone
Reconciliation from Deutsche AM reported segment to adjusted Deutsche AM standalone 2015 FY and 2016 FY Perimeter adjustments Deutsche AM Adjustments Adjusted Deutsche AM standalone Deutsche AM reported Sold & Other reported DB Group Deutsche AM standalone 2015 Abbey Life discontinued perimeter 2015
Slide 117: Reconciliation from Deutsche AM reported segment to adjusted standalone
Reconciliation from Deutsche AM reported segment to adjusted Deutsche AM standalone 9M-16 and 9M-17 Perimeter adjustments Deutsche AM Adjustments Adjusted Deutsche AM standalone Deutsche AM reported Sold & Other reported DB Group Deutsche AM standalone 9M-16 Abbey Life discontinued perimeter 9M-16 d
Slide 118: Deutsche AM standalone financials
Deutsche AM standalone financials Adjusted profit & loss statement and key performance indicators (€m) Key highlights 1 Management fees and other FY 2015 FY 2016 9M-16 9M-17 FY16 %Δ 9M17 %Δ recurring revenues decreased by Management fees and other €125m, or 6% recurring revenues 1 2,274 2,149 4 1,5
Slide 119: Balance sheet: Translation from IFRS reported to economic view
Balance sheet: Translation from IFRS reported to economic view IFRS Consolidated o/w DB Vita Economic Sep-17, €bn Key Highlights reported(1) Funds and pending view Assets €5.7bn adjustments comprise: Cash and bank balances 4.1 0.8 3.3 1– Guaranteed Funds (€4.6bn) Fair valued fin. assets 4.3 3.6 2 0.
Slide 120: Net flows have been strong in passive, active multi asset and alternatives
Net flows have been strong in passive, active multi asset and alternatives Historical net flows (€bn) 2014 2015 2016 2017 15 13 4 9 1 6 2 4 4 2 6 8 0 1 2 9 1 1 1 2 2 2 5 4 1 0 0 0 1 2 3 2 10 1 0 1 3 0 1 8 4 2 0 2 6 1 4 1 4 0 1 4 2 3 0 2 0 (0) 0 2 1 2 (0) 1 2 1 (1) (1) (1) (2) (1) (1) 0 (1) (0) (0) (