&w=3840&q=100)
Deutsche's DWS, Nippon Life in early talks for India asset management deal
Deutsche Bank's investment arm DWS is in talks to form an asset management joint venture in India with the Japanese insurer Nippon Life, four people with knowledge of the matter said, as the German company seeks to expand in Asia.
The negotiations are at an early stage and expected to take time due to regulatory issues, said the people, asking for anonymity to allow them to describe the private talks.
DWS, with more than 1 trillion euros ($1.13 trillion) in assets under management, is one of Europe's biggest fund managers. Nippon Life, as Japan's largest insurer, has been on an international buying spree.
The discussions, which have not previously been reported, follow a breakdown in talks for a separate DWS joint venture in China that marked a setback for Deutsche's Asia ambitions.
They are another example of foreign financial firms turning to India, the world's most populous country with a growing middle class.
Last year, Indian regulators gave initial approval for a mutual fund business between Jio Financial Services, owned by the billionaire Mukesh Ambani, and BlackRock, the world's largest asset manager.
Nippon Life and DWS already have a relationship in that the insurer owns 5 per cent of the German company and the two work together in areas such as distribution.
DWS and its majority-owner Deutsche Bank, Germany's largest lender, both declined to comment, while Nippon Life in Japan declined to confirm the talks.
In a significant shift, DWS CEO Stefan Hoops said he was ready for inorganic growth after years of recovery from the upheaval surrounding greenwashing accusations.
He told analysts last week the focus was on Asia and he imagined "the next couple of months to be quite interesting".
Nippon Life became DWS's second-largest investor after it bought its 5 per cent stake when Deutsche Bank listed DWS in 2018. Deutsche retained control with 79 per cent.
Ever since, Nippon Life and DWS have had a strategic alliance, encompassing areas including distribution and research. DWS has long said it would work with partners to expand in Asia.
Nippon Life already operates a fund management business in India with 5.67 trillion Indian rupees ($67.18 billion) under management, and it cooperates with DWS on a European-listed India government bond exchange traded fund.
Regulators in India at the end of last year eased rules to allow fund houses to launch passive-only funds through a spin-off entity and with easier compliance requirements as compared to fund houses who manage active funds.
DWS and Nippon Life could take advantage of the change to launch a separate jointly owned company for ETFs and passively managed funds, said one of the people with knowledge of the discussions.
Meanwhile, in China, DWS aims to increase its 30 per cent stake in the Chinese fund manager Harvest.
For years, Deutsche Bank, DWS and Chinese lender Postal Savings Bank of China were in talks for a joint venture, but those talks collapsed after the German companies resisted Beijing's demands to raise their stake in the deal.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
2 minutes ago
- Time of India
Auto companies 'in full panic' over rare-earths bottleneck
Frank Eckard, CEO of a German magnet maker, has been fielding a flood of calls in recent weeks. Exasperated automakers and parts suppliers have been desperate to find alternative sources of magnets, which are in short supply due to Chinese export curbs. Some told Eckard their factories could be idled by mid-July without backup magnet supplies. "The whole car industry is in full panic," said Eckard, CEO of Magnosphere, based in Troisdorf, Germany. "They are willing to pay any price." Car executives have once again been driven into their war rooms, concerned that China's tight export controls on rare-earth magnets - crucially needed to make cars - could cripple production. U.S. President Donald Trump said Friday that Chinese President Xi Jinping agreed to let rare earths minerals and magnets flow to the United States. A U.S. trade team is scheduled to meet Chinese counterparts for talks in London on Monday. The industry worries that the rare-earths situation could cascade into the third massive supply chain shock in five years. A semiconductor shortage wiped away millions of cars from automakers' production plans, from roughly 2021 to 2023. Before that, the coronavirus pandemic in 2020 shut factories for weeks. Those crises prompted the industry to fortify supply chain strategies. Executives have prioritized backup supplies for key components and reexamined the use of just-in-time inventories, which save money but can leave them without stockpiles when a crisis unfurls. Judging from Eckard's inbound calls, though, "nobody has learned from the past," he said. This time, as the rare-earths bottleneck tightens, the industry has few good options, given the extent to which China dominates the market. The fate of automakers' assembly lines has been left to a small team of Chinese bureaucrats as it reviews hundreds of applications for export permits. Several European auto-supplier plants have already shut down, with more outages coming, said the region's auto supplier association, CLEPA. "Sooner or later, this will confront everyone," said CLEPA Secretary-General Benjamin Krieger. Cars today use rare-earths-based motors in dozens of components - side mirrors, stereo speakers, oil pumps, windshield wipers, and sensors for fuel leakage and braking sensors. China controls up to 70% of global rare-earths mining, 85% of refining capacity and about 90% of rare-earths metal alloy and magnet production, consultancy AlixPartners said. The average electric vehicle uses about .5 kg (just over 1 pound) of rare earths elements, and a fossil-fuel car uses just half that, according to the International Energy Agency. China has clamped down before, including in a 2010 dispute with Japan, during which it curbed rare-earths exports. Japan had to find alternative suppliers, and by 2018, China accounted for only 58% of its rare earth imports. "China has had a rare-earth card to play whenever they wanted to," said Mark Smith, CEO of mining company NioCorp, which is developing a rare-earth project in Nebraska scheduled to start production within three years. Across the industry, automakers have been trying to wean off China for rare-earth magnets, or even develop magnets that do not need those elements. But most efforts are years away from the scale needed. "It's really about identifying ... and finding alternative solutions" outside China, Joseph Palmieri, head of supply chain management at supplier Aptiv, said at a conference in Detroit last week. Automakers including General Motors and BMW and major suppliers such as ZF and BorgWarner are working on motors with low-to-zero rare-earth content, but few have managed to scale production enough to cut costs. The EU has launched initiatives including the Critical Raw Materials Act to boost European rare-earth sources. But it has not moved fast enough, said Noah Barkin, a senior advisor at Rhodium Group, a China-focused U.S. think tank. Even players that have developed marketable products struggle to compete with Chinese producers on price. David Bender, co-head of German metal specialist Heraeus' magnet recycling business, said it is only operating at 1% capacity and will have to close next year if sales do not increase. Minneapolis-based Niron has developed rare-earth free magnets and has raised more than $250 million from investors including GM, Stellantis and auto supplier Magna. "We've seen a step change in interest from investors and customers" since China's export controls took effect, CEO Jonathan Rowntree said. It is planning a $1 billion plant scheduled to start production in 2029. England-based Warwick Acoustics has developed rare-earth-free speakers expected to appear in a luxury car later this year. CEO Mike Grant said the company has been in talks with another dozen automakers, although the speakers are not expected to be available in mainstream models for about five years. As auto companies scout longer-term solutions, they are left scrambling to avert imminent factory shutdowns. Automakers must figure out which of their suppliers - and smaller ones a few links up the supply chain - need export permits. Mercedes-Benz, for example, is talking to suppliers about building rare-earth stockpiles. Analysts said the constraints could force automakers to make cars without certain parts and park them until they become available, as GM and others did during the semiconductor crisis. Automakers' reliance on China does not end with rare earth elements. A 2024 European Commission report said China controls more than 50% of global supply of 19 key raw materials, including manganese, graphite and aluminum. Andy Leyland, co-founder of supply chain specialist SC Insights, said any of those elements could be used as leverage by China. "This just is a warning shot," he said.
Mint
6 minutes ago
- Mint
Why more equities won't save you from low withdrawal rates in retirement
Retirees are often drawn to a tempting idea: since equities typically deliver higher returns over the long run, a retirement portfolio with more equities will produce better outcomes. Wouldn't it be nice to escape the meagre 3% withdrawal rate by investing more heavily in equities? Unfortunately, it's not so straightforward. Beyond a point, increasing equity allocation will reduce, not raise, the withdrawal rate. This is due to a crucial but underappreciated concept: sequence of return risk. In portfolios that experience regular withdrawals, not just the returns but the order in which they are earned matter, which can have dramatic consequences. Also Read: Relying on rental income in retirement? Take these steps to protect yourself. The table shows how two retirees (A and B) experience the same average returns but in different sequences. Despite identical withdrawals, A (who faces early losses) ends up with just ₹59, while B (who sees early gains) ends up with ₹71—this is sequence risk at work. In a portfolio with no withdrawals, only returns matter—not the order in which they occur. This is because multiplication is commutative: 1 × 1.1 × 0.9 × 1.2 is the same as 1 × 0.9 × 1.2 × 1.1. But when you introduce regular withdrawals, you are now subtracting from the portfolio every year. In mathematical terms, you are combining subtraction with multiplication, and the commutative property breaks down. The arithmetic changes and the sequence begin to matter. High sequence risk A retirement portfolio with heavy equity exposure is likely to face substantial volatility and heightened sequence risk. In the accumulation phase, volatility can be a friend—it brings down average cost through disciplined investing. But in the decumulation phase, volatility becomes a foe. A 20% drawdown early in retirement can cause lasting damage, especially if the retiree is simultaneously withdrawing funds to meet expenses. Unlike a young investor, the retiree cannot 'wait it out". Also Read: How to prepare for retirement in a world of increasing life expectancy This can be illustrated by conducting simulations on retirement portfolios with varying equity allocation. We conducted multiple such simulations to check how the optimal withdrawal rates vary for different asset allocations. The findings are unambiguous. Withdrawal rates initially rise with greater equity exposure, peaking at 20–40%, but then begin to fall. Portfolios with higher equity allocation produced meaningfully lower safe withdrawal rates. This is not a quirk of Indian market data or a one-off observation. William Bengen, the American financial planner who introduced the '4% rule" in 1994, found the same. In his landmark study of historical US data, Bengen was surprised to find that safe withdrawal rates declined when equity allocations increased. He even noted that the worst outcomes were not produced by conservative portfolios with low equity exposure but by aggressive portfolios with too much equity. This insight wasn't isolated. The Trinity Study, an influential academic analysis, came to similar conclusions when it tested various asset allocations and their impact on withdrawal rates using US market history. Closer to home, my 2024 co-authored study with Rajan Raju had a similar conclusion. Using Indian data, we found that withdrawal rates initially rise with equity allocation but then begin to decline beyond a certain point. Also Read: How to build a ₹5 crore retirement corpus with ₹1.5 lakh monthly salary Though equities offer higher long-term returns, more equity does not always mean more retirement income. This is a paradox we need to wrap our heads around. Retirees should construct a portfolio with a balanced allocation that reduces volatility. If you have been smirking at retirees with good fixed-income allocations in their retirement portfolio, well, the joke may be on you. Ravi Saraogi, CFA, Sebi-registered investment adviser. and co-founder, Samasthiti Advisors.
Mint
6 minutes ago
- Mint
The poverty line has moved but have basic vulnerabilities in India eased?
According to recent World Bank data, extreme poverty in India fell sharply from 27.1% in 2011–12 to just 5.3% in 2022–23, suggesting that 269 million people have been lifted out of poverty. While this achievement is nominally and statistically significant, the finding prompts a deeper and more structural methodological question: Are we counting fewer people as 'poor' in India, or are we failing to capture the full spectrum of vulnerabilities that persist among people in relative poverty which discussions based on 'poverty line' measurement miss in scope and reality? Historically, poverty measurement in India relied predominantly on income or consumption. This approach universally classifies individuals as poor or non-poor based solely on monetary criteria, offering a limited view of deprivation. In India, the Tendulkar Committee and later the Rangarajan Committee refined these poverty lines to reflect changing consumption patterns, but still focused primarily on income criteria. However, over the last two decades, the conceptualization of poverty, its measurement and assessment have all evolved significantly. Also Read: Mint Quick Edit | Poverty isn't widespread but prosperity needs to be Multidimensional frameworks, including the UNDP's Multidimensional Poverty Index (MPI), highlight that poverty encompasses deficits in education, health and living standards. Much of India's recent poverty discourse has centred on updated metrics, including the World Bank's shift from a poverty line of $2.15 to $3 per day and methodological refinements such as the adoption of thslum e 'modified mixed recall period' (MMRP) in consumption surveys. These changes, while noteworthy, underscore a deeper tension between statistical representation and lived deprivation. As critiques argue, estimates that rely on projected data, especially in the absence of post-pandemic ground surveys, risk portraying a linear trajectory of progress that may not fully account for access-based or structural vulnerabilities. A victory, but for whom?: While incomes have risen, they have not translated into improved well-being when access to essential public goods such as healthcare, education, transportation and digital infrastructure remains unequal. For multitudes, these access gaps persist, Uttar Pradesh (UP), Maharashtra, Bihar, West Bengal, and Madhya Pradesh, states that together made up 65% of India's extreme poor in 2011–12, account for two-thirds of India's overall reduction in extreme poverty. Yet, our Access Inequality Index Report 2025, which ranks Indian states based on access to essentials across five pillars—basic amenities, healthcare, education, socio-economic services and legal recourse—reveals a more uneven picture. While West Bengal and Maharashtra show relatively better rankings as 'achiever' and 'front-runner' states, respectively, UP and Bihar remain in the 'aspirant' category. This means that despite reductions in poverty as measured by consumption or income, the majority of households in these states continue to lack reliable access to vital public goods. For instance, only 19% of households in UP and 21.5% in Bihar have access to clean cooking fuel. Just 22.4% of households in Maharashtra and 33.7% in West Bengal have at least one member covered by a health insurance or finance scheme. Also Read: Himanshu: India needs official poverty data for effective policymaking States such as Kerala, Goa and Tamil Nadu consistently rank high in access to essential public services, with Goa leading overall and topping categories like basic amenities and healthcare. For example, 90% of households in Goa live in pucca houses, compared to 83.4% in Kerala and 87.9% in Tamil Nadu. Also, 91.9% of households in Goa have access to piped water supply within their dwelling or yard, while child immunization rates stand at 84.1% in Goa, 84.5% in Kerala and 85.7% in Tamil Nadu. In contrast, states such as Bihar, UP, Jharkhand and Chhattisgarh lag far behind. These deprivations are critical to people's well-being and show that income thresholds alone are insufficient markers of progress. A household that marginally exceeds the poverty line but lacks clean water or reliable healthcare remains vulnerable. These forms of deprivation often remain invisible in conventional consumption data, yet they are pivotal in determining a household's ability to recover from shocks, invest in education or participate fully in economic life. Alternative readings: An analysis of household income data by Azim Premji University's State of Working India 2021 highlights the unequal economic impact of the covid pandemic. The lowest 10 percentiles saw a steep 27% decline in income, compared to 23% among the 40th-50th percentiles and 22% among the top 10 percentiles. Income losses were more pronounced in urban areas. And although the setbacks may appear modest, the absolute income reduction for low-income households has been profound. This financial distress coincided with a sharp increase in non-monetary deprivations. Also Read: India must redraw its poverty line to reflect economic progress The Hunger Watch survey reported in 2022 that 80% of respondents experienced some form of food insecurity, with 25% suffering severe distress (like skipped meals and hunger); 41% observed a decline in the nutritional quality of their diets, and 67% were unable to afford cooking gas in the month preceding the survey. A Pew Research Centre report in 2022 also estimated that about 75 million additional people in India fell into poverty due to the pandemic. The subsequent State of Working India 2023 study reaffirmed these patterns, documenting a 22% drop in cumulative household income from March to October 2020, with the poorest households disproportionately affected, driving a notable surge in poverty rates. While welfare programmes such as the PM Awas Yojana, Ujjwala Yojana, Jan Dhan Yojana and Ayushman Bharat have expanded coverage, and direct benefit transfers have improved matters, challenges persist. Access to resources does not always translate to adequacy; owning a gas cylinder does not guarantee regular refills. Many essential services remain underfunded, unevenly implemented or inaccessible, particularly in rural and remote areas. All this makes access inequality the emerging face of poverty in India. Ultimately, despite significant improvements in headline poverty metrics, a closer examination reveals a more complex reality. The persistence of access disparities, relative poverty and regional inequalities underscores the need for clarity on poverty today. We must pay attention to institutional capacity, political will and the equitable distribution of public goods. The authors are, respectively, dean and research analyst, O.P. Jindal Global University.
