Last week there was a formal announcement that Deutsche Bank asset management subsidiary DWS would partner U.S. headquartered Galaxy Digital to issue European exchange traded products (ETP) for digital assets.
Galaxy has numerous cryptocurrency funds, but DWS will be its only partner for European ETPs. It brings its technical infrastructure, digital asset management experience and research to the table. The most obvious contribution from DWS is its distribution as well as portfolio management and product structuring.
“As we see increasing client interest in digital assets and the need for secure access, our shared education-first approach and commitment to providing clients with access via well-known and trusted investment vehicles will enable us to build thoughtfully constructed and thoroughly researched products,” said Fiona Bassett, Global Head of Systematic Investment Solutions at DWS.
In February, a potential Galaxy alliance was revealed by Bloomberg as one of several possible DWS digital asset initiatives. A potential acquisition of Deutsche Digital Assets was rumored to be considered, but it also has a range of ETPs, so a buyout now seems unlikely.
Another possible acquisition target was Tradias, a subsidiary of Bankhaus Scheich. That has limited overlap with the Galaxy relationship as one of Tradias’ key focuses is the tokenization of real world assets, including real estate, debt, equity and funds.
Meanwhile, the mainstream asset management sector is showing a heightened interest in digital assets, including both crypto and tokenized real world assets. Last week Franklin Templeton’s CEO described blockchain as a massive disruptor. Her comments came as one of the company’s tokenized money market funds passed a quarter of a trillion dollars in assets under management (AUM). Major UK asset manager abrdn says it plans to use the Hedera DLT for its tokenization plans.
