Frankfurt:Deutsche Bank AG plans to raise as much as €1.8 billion ($2.2 billion) in an initial public offering (IPO) of its asset management unit, a key pillar of the German lender’s turnaround strategy.

The offering values the asset manager at as much as €7.2 billion, with the first day of trading expected on 23 March. Nippon Life Insurance Co. agreed to acquire a 5% stake in DWS in the IPO at the issue price of €30 to €36 a share, Deutsche Bank said in a statement late on Sunday.

A successful offering of DWS after a surge in market volatility would mark an important achievement for Deutsche Bank chief executive officer John Cryan, who proposed the sale a year ago to help bolster the lender’s capital. The unit—headed by Nicolas Moreau—will also gain more independence and flexibility for acquisitions at a time when firms are under pressure to expand in the asset-management business.

“I had expected a target valuation of up to 8 billion euros so the given range is not very ambitious," said Ulf Moritzen, an portfolio manager at Aramea Asset Management with €3.5 billion under management, including Deutsche Bank stock. “But I expect positive news flow after the IPO and would buy into it up to a valuation of 7 billion euros."

Attractions of DWS include its diversified portfolio across many asset classes and global scale, Barclays Plc. analyst Daniel Garrod wrote in a client note in late February. A return to net money outflows and failure to cut costs are major risks to the business, he said.

The unit has also had a mixed performance across regions. While assets under management in Germany have been increasing, with a particularly strong jump in the second quarter of last year, its US funds have yet to recover from the massive outflows suffered in 2016.

DWS said it will enter into a strategic partnership with Nippon Life that will see the Deutsche Bank subsidiary manage some assets for the Japanese insurer. It will also involve joint product development and “opportunities for distribution," according to the statement.

“Our strategic alliance is consistent with, and will help accelerate, our focus on growing in the Asia region," Moreau said in the release.

DWS has about €700 billion under management and was expected to be worth between €6 billion and €8 billion once it trades, people familiar with the matter had said before the announcement. That’s in line with Amundi SA, which has twice the amount of assets and a market value of €13.7 billion. Companies typically sell shares at a discount to their target valuation to lure buyers.

Shares of Deutsche Bank climbed about 1% in Frankfurt trading and were priced at €13.18 as of 9:06am. The stock is the second-worst performer this year on the 42-member Bloomberg Europe 500 Banks and Financial Services Index, with a decline of about 17%.

DWS has a 30% stake in a Chinese joint venture, Harvest Fund Management Co. Ltd, but can’t consolidate the company’s more than $100 billion in assets under management because it only has a minority stake.

Deutsche Bank tried to sell much of the asset management unit in 2012, but stopped when it couldn’t get enough money. Now the business is targeting net inflows of 3% to 5% of assets a year, a number that may be difficult to reach after several key funds saw recent outflows, according to Autonomous Research.

The bank will offer 40 million shares in DWS and may add another 10 million shares in an overallotment option, according to the statement.

Global IPOs are up about 25% this year compared with the same period in 2017. Companies sold $27.9 billion of stocks this year through 4 March, compared with $22.2 billion a year ago at this time, according to data compiled by Bloomberg League Tables. The number of deals rose 2.5%.

Deutsche Bank will seek to cut as many as 6,000 jobs at its retail unit by the end of 2022, providing the first estimate for the expected staff reductions at the newly formed division, according to two people briefed on the matter. Bloomberg