Deutsche sells more property assets

US pensions CalPERS and CalSTR are among the institutions backing a new real estate opportunity fund organised to purchase a $1.2bn portfolio of direct property investments from Deutsche Bank.

Deutsche Bank Real Estate Opportunities Group (REOG), part of Deutsche Asset Management’s Real Estate Group, has completed the sale of $1.2bn (€940m) worth of direct property investments to third party investors.

Under the deal, investors including US pension schemes CalPERS and CalSTRS have committed to a new $1.2bn private equity real estate fund which was organised to purchase the assets. The fund, which following the purchase is fully invested from inception, will continue to be managed by REOG, now acting on behalf of the fund’s limited partners. 

 

The limited partners have also agreed to reinvesting $300m of the fund’s profits into a follow-on fund. According to a press release, “one or more affiliates of Deutsche Bank will commit up to $60m to this reinvestment vehicle.”

 

The transaction is part of Deutsche Bank’s ongoing effort to sell off non-core assets and to free up capital for use elsewhere that has already produced the disposal of several parts of the bank’s private equity portfolio.

 

Last year, the bank sold its late stage private equity business, now trading under as MidOcean Partners, to an investor consortium led by management.

 

In November, as part of the same strategy, US-based private equity investor The Blackstone Group bought 51 properties from Deutsche Bank that were also valued at $1.2bn.