(Bloomberg) -- The shares of DWS Group, the investment arm of Deutsche Bank AG, slumped the most in a week after its first-quarter pretax profit fell short of estimates even as inflows pushed assets under management to a record.

The German money manager said in a filing Thursday that adjusted pretax profit rose 2% to €231 million ($248 million) in the three months through March from the prior quarter. That compares with a Bloomberg-compiled estimate of €236.6 million. 

The stock dropped as much as 3.7% in early trading in Frankfurt, the biggest intraday loss since April 16. Bruce Hamilton, an analyst at Morgan Stanley, expected weakness in the stock citing the “light” pretax profit print. Analysts at Jefferies and Keefe Bruyette & Woods also cited the miss. 

Read More: DWS Falls Amid Small Profit Miss on Revenue, Costs: Street Wrap

However, DWS posted inflows in the quarter, while assets it oversees grew by €45 billion to €941 billion. That makes the firm among a handful of asset managers reporting inflows even as the broader industry struggles to stem an exodus. The shares of DWS are still up about 15% this year amid efforts by Chief Executive Officer Stefan Hoops to boost client inflows and cut costs. 

“While DWS has understandably been called a ‘show-me’ story, our new all-time high in assets under management and strict cost discipline show the steady progress we have been making in implementing our strategy,” Hoops said in the statement. 

In January, DWS said it would return €800 million to shareholders after a self-imposed deadline to make an acquisition expired after it found no suitable target. 

Away from passive funds, clients pulled money from DWS’s alternatives business for the second consecutive quarter, with €2.2 billion leaving in the first three months, driven by redemptions in liquid real assets and real estate funds. 

DWS has been building its alternatives business in a bid to help attract fresh capital. It recently launched a Capital Solutions unit that aims to capitalize on the distress arising from businesses facing high borrowing costs. 

Read More: DWS Hires Blackstone’s Spasov for New Capital Solutions Business

With continued growth in its exchange-traded funds arm known as Xtrackers, net inflows in active funds, and a turnaround in sight for alternatives, “we are on track and fully committed to reach our financial targets for 2025,” Hoops said.

Here are some other highlights from the statement:

  • Net income jumps 20% to €146 million from prior quarter
  • Adjusted Cost-Income Ratio (CIR) improved to 64.7% in the quarter – in line with DWS’ outlook for the full year
  • Adjusted costs declined to €423 million in Q1 from €433 million in the fourth quarter of 2023 due to lower general and administrative expenses
  • Adjusted revenues of €653 million in Q1; down 1% as higher management fees countered seasonally lower performance fees

(Updates with shares in first and third paragraphs.)

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