The potential sale of RREEF has taken a big step forward with reports this morning suggesting Deutsche Bank has decided to sell a large part of its Global Asset Management business following a strategic review.
Both the Financial Times and Reuters cited unnamed sources as they reported Deutsche had launched the sale following the announcement of a strategic review in November and that the bank had assigned a price tag of between €2 and €3 billion to the platform, which has around €516 billion of assets under management.
The review covered all of the asset management’s silo parts except for the DWS franchise in Germany, Europe and Asia, which the Bank has already determined is a core part of its retail offering in those markets. RREEF itself is housed within the bank’s alternatives unit that manages a combined €46.35 billion. The other components of its alternatives business are RREEF Infrastructure and DB Advisors.
Reuters said Deutsche Bank would prefer to sell the business in one go to a single buyer but was ready to consider divestments to separate buyers if that would fetch a high price.
Senior figures within private equity real estate have already been privately speculating on the chances of certain RREEF directors orchestrating a management buyout. Indeed, The Financial Times said this morning that Kevin Parker, global head of asset management, wanted to buy out RREEF but was unable to secure financial backing.
As many as 50 parties have registered an interest for Deutsche Bank’s business. Wells Fargo, Royal Bank of Canada, and Ameriprise Financial are among early names to have been linked with the sale.
The Financial Times reported initial bids were due in the spring, whereas Reuters said non-binding offers were expected in January or February.
Separately, RREEF announced a success this morning within its UK business. It said RREEF UK Property Ventures Fund No. 2 had sold its final asset, achieving the fund’s target return. It returned a net internal rate of return of 18.2 percent per annum to investors. Its objective was 15 – 20 percent.
Ventures 2 launched in 2002 for UK institutional investors. The closed end fund invested in value added strategies including asset repositioning, development, asset management and planning gain. The fund’s portfolio had a book cost of £341 million.
James Petit, Head of RREEF Real Estate, UK, said: “We are pleased that Ventures 2 has been such a success for our investors despite its final years coinciding with the most challenging property market on record. We believe this success underscores RREEF Real Estate’s depth of experience in the UK property markets.”