00:00Who would have thought that we're going to be talking about Europe? It's been so silent and
00:04muted for many years, but now Europe is back. And as a number one asset manager in Germany,
00:09we are the gateway to Europe. It's really good to see that.
00:13So talk to us about the products you're offering to get U.S. investors in and which kind of
00:19investors are you courting? Retail? Is this institutional? I know you have 800 employees
00:24here. So what do you what are you selling them? I mean, we're so diversified, right? We operate
00:30in active extractors and alternatives business. And that's the case for both the U.S. and our
00:35European franchise. But what I'm hearing, especially from the institutional clients, is how can we
00:41diversify? And diversification means how can I diversify geographically? How can I participate
00:47in Europe's growth? As you know, especially with the fiscal support that European governments are
00:53actually supporting on infrastructure, private credit, we really provide opportunities for our
00:59investors and they're interested. So here we have a lot of concentration risk. Obviously, the MAG-7
01:04takes up a massive portion of the S&P or the NASDAQ. Are they selling some of their winners to put into
01:11global tech? Are they looking at other industries globally? Are there different factors globally that
01:17are winning here as momentum winning there as momentum continues to dominate here? I would say
01:23it depends on who you're talking to, right? Depends on your risk appetite and how you want to reset your
01:29portfolio. And when we talk about allocation, I don't mean huge allocations, right? Moderate but
01:34meaningful. One of the areas that we've heard strong, actually, interest is about our private credit and our
01:42infrastructure products. And that's an area that we are growing. The other area that we are very much getting
01:47interest is from Middle East. We just opened our Abu Dhabi office. And I think that investors globally are
01:55reconsidering Europe instead of solely U.S.
01:58But there's no one specific wrapper because you mentioned X-Trackers. And I know I used to anchor the ETFIQ show. So I know that you have massively grown in that business, tripled your assets over the past few years.
02:12X-Trackers has been a great success for us in Europe. And we have provided various actually products that reach to that magical numbers of five, six, seven billion dollars. And that's a really a good growth area for us. We just actually launched our products in Stockholm and we expect to grow across the European franchise. Some of the products have really focused on big data. AI has really treated well for our company.
02:38So this is a product in which you're already doing very well. You have a well-known name. You mentioned private credit. Is that one of the shooting stars, you think, for DWS Americas?
02:47I believe that's going to be. One of the things that I'm really proud of is our partnership with Deutsche Bank. As you know, when you think about the private credit market here in the U.S., it's a little bit saturated. And origination is the name of the game where a lot of actually players struggle with. With our partnership with Deutsche Bank, that certainly gives us an advantage as an asset manager.
03:05You mentioned infrastructure as well. And I wonder how much of that is a play on the data center build out. We had a story say Microsoft is putting another 10 billion dollars in, you know, European data center build in Portugal.
03:19Is that the kind of thing that you're investing in infrastructure for?
03:23Infrastructure across Europe, the regular infrastructure. But aside from that, yes, data centers is another thing.
03:28Including roads and bridges.
03:29Exactly. Exactly. So really partaking in rebuilding Europe.
03:35What about defense? That's been a huge part of the European investment story, right?
03:41We've seen a lot of money allocated to that, especially of Germany. Is that something that Americans want to be investing in?
03:48It remains to be seen. We are working on a variety of products that are actually considering, especially in our extractors business.
03:55But that could certainly be an interesting play. And you mentioned investment in the Middle East.
04:00Are you doing that through partnerships? Do Americans want to increasingly do business?
04:06Every time I see a private equity carve out lately, there's a Middle Eastern firm attached to, you know, KKR or Carlisle or whoever's doing it.
04:14We actually opened our own office because we have a very strong alternatives business. So we did not say that we needed actually any partnerships.
04:22What we have done over the last few years is actually invest in our capabilities.
04:25As you know, in the United States, we have a really strong alternatives franchise on real estate, liquid, real assets, and infrastructure.
04:33We did expand our capability in terms of real estate debt. And then this private credit partnership with Deutsche Bank is going to really increase our and expand our product suite.
04:45Well, the good news for you, I guess, is that more and more people are talking about alternatives as well as ETFs in 401ks, right?
04:52So what kind of growth opportunity does that present?
04:55Look, I think this is a subject that we've been talking about for many years, but it's finally here.
05:00I think retailization of alternatives, as I say, is live and well.
05:04So I think all of the firms really need to focus on how can I partake in this opportunity and not just solely in the U.S., across the globe.
05:13When you're thinking about the pension reforms that's going to be taking place in Germany and many other European countries, we think that it's going to be a really unique opportunity for us especially.
05:22I have to ask about, you know, the culture that you're fostering at DWS Americas, your leadership philosophy, and also about A.I., because you can't not ask a CEO about A.I. strategy, right?
05:35So what's your vision for DWS Americas?
05:39Look, I mean, it's like the markets, right?
05:41When we think about 2026, what's the story going to be?
05:44In my view, it's capex to cash, right?
05:46We need to see how A.I. is going to, all this spend is going to result in the operational effectiveness.
05:52And at DWS, we focus on A.I., how can we actually improve our returns in our investment processes?
06:00How can we get to efficiencies to ensure that we keep the momentum that we showcase to the market in terms of our cost-income ratio?
06:08So I think A.I. is a very, very important segment for asset management as we go through this transformation.
06:13If you do not invest into A.I., you will definitely not be amongst the winners.
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