Deutsche Bank AG has picked around 12 bidders to conduct due diligence on its asset management division, which the German bank expects could fetch more than 2 billion euros (1.7 billion pounds), two sources familiar with the process said on Thursday.

In November, Deutsche Bank said it was considering the sale of several global asset management businesses in light of new regulation, rising costs and growing competition expected to weigh on future earnings.

Binding offers are expected by mid to late February, the sources said.

Deutsche Bank declined to comment.

Under review is a sale of Deutsche's institutional investor business, DB Advisers; its alternative asset business RREEF; an insurance asset management business; and its DWS Investments mutual fund business in the Americas.

Not included in the review are private wealth management or Deutsche's DWS franchises in Germany, Europe and Asia, which are seen as part of the bank's retail palette.

Bidders who expressed an interest in buying all of the units as a package were allowed to conduct due diligence. Bidders who formed a consortium to buy the asset as a whole, only to carve it up later, were excluded, a banker familiar with the process said.

DB Advisers has 162 billion euros of assets under management; the insurance asset management unit, 150 billion, and RREEF, 46 billion.

DWS Investments Americas had about 42 billion euros under management.

Deutsche's asset management operations, led by Kevin Parker, earned pretax profit of 117 million euros in the third quarter, mainly driven by DWS.

A London-based equities analyst specialising in investment management companies who spoke on condition of anonymity said valuations on a fund manager could range from 1.5 percent of assets for a low quality private wealth manager, to up to 10 percent of managed funds for a top end alternative investment or hedge fund manager.

Large independent listed fund managers are trading at between 1-2 percent of assets, according to calculations based on Thomson Reuters data. Schroders trades at just under 2 pct of Assets, Aberdeen at 1.5 percent, and Henderson 1.8 percent.

Asset management, unlike investment banking, is not an intensive user of regulatory capital and Deutsche's business has already seen years of restructuring and job cuts, without yielding the desired results.

(Reporting By Philipp Halstrick and Kathrin Jones; Writing by Edward Taylor; Editing by Jon Loades-Carter and David Holmes)