Deutsche Bank Says Top Investor Capital Group Raises Stake

(Bloomberg) -- Deutsche Bank AG said Capital Group, already a top investor in the German lender, raised its stake in a sign of confidence in Chief Executive Officer Christian Sewing’s turnaround plan.

The Euro Pacific Growth Fund, part of the American Funds family of mutual funds, held 3.61% of Deutsche Bank as of Oct. 6, according to the German lender’s website. The stake was disclosed separately from the 3.74% holding that parent Capital Group reported owning as of March, prompting media reports that the firm controlled more than 7% in total, which would have made it the lender’s largest investor.

Deutsche Bank clarified late Tuesday that the two stakes can’t be added up, and that it’s not clear from the latest filing how much the total investment of the Los Angeles-based asset manager had increased.

“While the Capital Group has increased its shareholding in Deutsche Bank AG, the investment has not crossed the 5% threshold overall,” a spokesman for the lender said by email. Passing that threshold would have required a new filing by the firm.

Capital Group is among the bank’s biggest investors, along with BlackRock Inc., two Qatari investment vehicles, Doug Braunstein’s Hudson Executive Capital and Cerberus Capital Management. The latest increase in its holding comes days after Capital Group raised its stake in Commerzbank AG to become that bank’s second-largest investor behind the German government.

Sewing is rolling back years of expansion as a global investment bank to focus on lending to German and European companies, while seeking to retain its prowess in fixed-income trading. Shares of the lender have gained about 15% over the past year while most of its rivals declined.

Capital Group is one of the most storied names in U.S. money management. Founded in 1931, it has resisted the more recent trend toward passive investments that simply replicate indexes.

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