* Singapore, Saudi Arabia funds also show interest - source
* Qatar, HNA unlikely to seek stake in IPO - source
* Despite interest, some investors express concerns
* IPO is big step in Deutsche's turnaround plans (Adds comment from KPMG in paragraph 12)
By Tom Sims, Hans Seidenstuecker and Arno Schuetze
FRANKFURT, March 6 (Reuters) - BlackRock, George Soros and big sovereign wealth funds are among investors expressing interest in buying stakes in the initial public offering of Deutsche Bank's asset management arm, a person familiar with the matter said on Tuesday.
The sovereign funds include Singapore's Temasek and Saudi Arabia's Public Investment Fund (PIF), the person said.
Deutsche Bank is finalising plans for the IPO of the asset management business, known as DWS, that have been a year in the making. Deutsche is expected to sell 25 percent of existing DWS shares for 1.5-2 billion euros ($1.9-$2.5 billion), people close to the matter have said.
DWS is seeking anchor investors, the person said, while it also wants to ensure the liquidity for the free floating shares.
Deutsche Bank's largest investors, the Qatari royal family and the Chinese conglomerate HNA, are not expected to invest in the IPO, said the person, who disclosed the potential investor base on condition of anonymity because the IPO process is ongoing.
Spokesmen for Qatar and HNA declined to comment. A Deutsche Bank spokesman declined to comment, while the potential DWS investors declined to comment or were not immediately available for comment.
The DWS listing will mark the most tangible milestone yet in Chief Executive Officer John Cryan's struggle to restructure the flagship German bank.
Deutsche said in March 2017 it would list a stake in DWS as part of a broader overhaul to help the bank move on from a string of lawsuits and trading scandals.
Some investors have raised questions about the timing of the IPO as the economic growth cycle turns and financial markets become more volatile.
"One of the key investor concerns regarding DWS is the question whether the asset management industry in general is at the top of the cycle," said a second person close to the IPO.
The asset management industry is facing pressure on fees and rising regulatory costs, which show no signs of abating and which could limit profits for the sector.
"Asset management is under pressure from regulators, investors and the public to perform better and charge less," said Tom Brown, Global Head of Asset Management at consultants KPMG. "Firms need scale or to specialise to stay in the game."
These potential constraints come on top of issues specific to Deutsche Bank.
"Will DWS be able to cut costs as harshly as needed?" the second person close to the IPO said. "Will it be able to do an interesting large M&A deal given the fact that DB wants to retain control?"
Another concern among investors is that Deutsche Bank could dilute the price of DWS shares by selling down its stake if the bank needs to raise capital.
The IPO would help Deutsche to bolster its balance sheet and quell shareholder unrest over the pace of its turnaround after three consecutive years of losses. It could also possibly open the way to dividend payouts.
A price range for the shares is expected to be announced as soon as Sunday, followed by the publication of an investor prospectus on Monday.
The IPO would likely take place in the week of March 19, sources have said, adding it had been brought forward hoping to lock in stock market valuations ahead of any correction.
DWS head Nicolas Moreau, formerly with the French insurer Axa, has been on the road for four weeks over the past few months drumming up investor interest and plans to meet with investors again next week. (Additional reporting by Simon Jessop in London and Anshuman Daga in Singapore; Editing by Kathrin Jones and Jane Merriman and David Evans)