RREEF to remain part of Deutsche Bank

After concluding a strategic review of its businesses, the German bank will hold onto its real estate and infrastructure arm. The decision could help unlock some €500m of capital for its second infrastructure fund.

After looking to sell its infrastructure and real estate asset management business for the better part of a year, it appears as though Deutsche Bank will be keeping RREEF as an integral part of its business after all. 

According to a statement by the German bank, RREEF, the global alternative asset management business, will be an integral part of Deutsche Bank’s newly integrated Asset & Wealth Management (AWM) division.

In addition to RREEF, the bank’s other asset management businesses – DWS Americas, its mutual fund business in the Americas; DB Advisors, its global institutional asset management business; and Deutsche Insurance Asset Management, its global insurance asset management business – also will be a part of AWM.

“Combining active and passive investment strategies together with retail asset management in one business unit will position the bank to fully exploit the potential of its roughly €900 billion in assets under management and to generate added value for customers,” according to the statement. The new AWM division also will include former Corporate Banking & Securities passive and third-party alternatives businesses, such as exchange-traded funds. 

The possible sale had put a damper on fundraising for RREEF’s second European infrastructure fund, which has so far reached a first close on just over €620 million, but has over €500 million of capital waiting in the wings for the outcome of the division’s future. RREEF already manages a €2.1 billion infrastructure fund, closed in 2007. It is currently bidding to operate the Port of Virginia, in the US.

RREEF initially was placed on the selling block late last year and, as recently as three months ago, it appeared as though the business would be getting a new owner. In February, New York- and Chicago-based Guggenheim Partners entered into exclusive negotiations to purchase parts of Deutsche Bank Asset Management, including RREEF, which currently manages €41.9 billion in assets. The other parts on the negotiation table were DWS Americas, DB Advisors and Deutsche Insurance Asset Management. 

In May, Deutsche Bank and Guggenheim agreed to end exclusive negotiations on buying three parts of the asset management division with a view to focusing solely on a deal for RREEF. In June, the negotiations ended after both parties “were unable to agree on terms for the sale of the business,” according to Deutsche Bank.

Deutsche Bank’s decision to keep RREEF comes on the back of a new strategic review launched following the June appointment of new co-chairs Jürgen Fitschen and Anshu Jain, which occurred just prior to the collapse of negotiations with Guggenheim. What that means for RREEF in terms of personnel, growth and/or new funds remains to be seen, as the bank declined to comment beyond the statement.