Warburg Invest, the investment arm of the Hamburg-based Warburg banking group, has agreed a deal with Nord/LB (Norddeutsche Landesbank Girozentral), an ailing Hanover-based bank, that will see the two entities join forces in creating a new asset management business that, a joint statement by MM Warburg & Co and Nord/LB noted, will be “one of the most important asset managers in northern Germany” once it is up and running.
In announcing their deal yesterday, the two banks said the deal will see them “pool” their asset management operations, with Warburg taking a 75.1% stake in the newly-created entity and Nord/LB a 24.9% stake.
The newly-created asset manager will have locations in both Hamburg and Hanover, and assets under management and administration totalling “more than €34bn”, the banks said.
The deal is subject to regulatory approval.
‘Broader range of products and services’
Hinrich Holm, deputy chairman of the managing board of Nord/LB and chairman of the supervisory board of Nord/LB Asset Management, explained the deal as a “relinquish[ing]” of the majority stake in its asset management business in order to “enter into cooperation with MM Warburg & Co, in order to continue to be able to offer customers comprehensive solutions in future”.
“With Warburg, we have a highly professional partner in asset management at our side,” Dr Holm added.
“Nord/LB customers will be offered an even broader range of products and services”.
Nord/LB one of a number of German banks that have been weakened by their exposure to shipping debt in recent years.
As noted by International Investment’s sister publication, Investment Europe, in 2016, “the aggressive sale of shipping debt funds by German independent financial advisers in the years preceding the global financial crisis” contributed to the problem, which then was aggravated “by a lack of regulatory oversight, lax standards for valuing debt, and fiscal incentives provided by the German government”.
Nord/LB Asset Management was founded in 1999 and employs more than 100 staff. It offers a range of products that include passive as well as active funds in addition to quantitative investment strategies. It also claims to be “a pioneer in the field of sustainable investment”, according to a joint statement announcing the new venture with Warburg Invest.