2. Deutsche Bank Aktiengesellschaft (NYSE:DB)
Cerberus Capital Management Stake Value: $777,141,000
Percentage of Cerberus Capital Management’s 13F Portfolio: 12.73%
Number of Hedge Fund Holders: 14
Deutsche Bank Aktiengesellschaft (NYSE:DB) is a Frankfurt-based global investment bank and financial services firm. At Q4’s end, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in Deutsche Bank Aktiengesellschaft (NYSE:DB), down from 15 hedge funds in the third quarter of 2021.
Douglas Braunstein and James Woolery’s Hudson Executive Capital is the leading shareholder of Deutsche Bank Aktiengesellschaft (NYSE:DB) with 67.39 million shares worth $844.67 million. Cerberus Capital Management holds more than 62.04 million shares in Deutsche Bank Aktiengesellschaft (NYSE:DB) worth over $777.14 million. This represents 12.73% of their portfolio.
Third Avenue Management in its Q3 2021 investor letter mentioned Deutsche Bank Aktiengesellschaft (NYSE:DB). Here is what the fund said:
“Deutsche Bank AG (4.5% portfolio weight) – Similarly, Deutsche Bank Aktiengesellschaft (NYSE:DB) has in recent years undertaken profound cost cutting initiatives, albeit, in Deutsche’s case, as a result of scandal, business underperformance and a need to deleverage. Deutsche Bank, and other investment banks with large fixed income trading operations, clearly benefited from the pandemic in 2020 as a result of unusually large fixed income trading volumes and market volatility. This is one of the primary arguments for having trading operations alongside more traditional banking and asset management businesses—i.e., that their business performances are not correlated and strong trading performance can, at times, offset challenges in other parts of the business. And times are still challenging for Deutsche’s more traditional corporate and private banking businesses as a result of the interest rate environment. Clearly a higher (or even less negative) German rate environment would help, but it must be said that Germany has to be among the least attractive banking markets in Europe. The industry structure is unique and frustrates the ability of private banks to produce profit, which in turn limits the ability to accumulate capital, making the entire system more fragile than it ought to be. We value Deutsche’s various banking business lines accordingly. But, turning back to things Deutsche can control, it is indisputable that Deutsche Bank Aktiengesellschaft (NYSE:DB), under CEO Christian Sewing, has made considerable progress towards its critical cost cutting, deleveraging and capital accumulation goals. At the outset of our investment in Deutsche, our single largest concern was that the bank’s necessary exit from certain lines of business, along with sizable headcount reduction in others, could cause clients to seek other relationships with banks offering a full range of services and without any perception of counterparty risk. In a worst case scenario the result could have been an erosion of revenue even faster than the cost reduction, possibly precipitating a downward spiral. As we emerge from the pandemic with Deutsche Bank Aktiengesellschaft (NYSE:DB) now far down the road of transformation, and clear evidence that it is regaining market share in various lines of business, the largest risks appear to be behind us. To that point, in recent public comments Deutsche management has indicated that it intends to resume returning excess capital to shareholders in 2022.”
