Deutsche Bank agreed Thursday to acquire Chicago-based RREEF in a deal that would make the Frankfurt, Germany-based bank the world’s largest real estate investment advisor.
In the deal, which would raise Deutsche Bank’s assets under management to $36 billion, Deutsche Bank agreed to pay a total of $490 million to Haslemere NV, Rodamco Europe NV, Rodamco North America and Brobeco Groep NV. Rodamco North America itself is currently in the process of being sold.
For the newly launched DB Real Estate — a division made up of Deutsche Bank’s real estate investment management groups created by the bank last week — the transaction means an improved product offering. Upon the closing in first half of 2002, RREEF will operate as a business unit within DB Real Estate, keeping the RREEF name as well as the RREEF senior management team.
"The investment offerings that RREEF brings are a totally complementary way for DB Real Estate to offer products that are not available in North America," says Richard Gunthel, managing director and global head of DB Real Estate. "We are thrilled to have the opportunity to work with such a powerful company."
According to Gunthel, RREEF’s stellar track record with products such as core and value-added commingled funds and investment in publicly traded real estate securities would allow DB Real Estate to support the rising demand for international investment.
"America, from an institutional investment standpoint, has acquired a global perspective," says Gunthel. "We didn’t have capital to service that demand before."
The acquisition also paves the way for Deutsche Bank to leverage its existing global distribution channels. In September 2001, the firm announced its intention to acquire investment manager Scudder. According to Susan Swanezy, managing director of DB Real Estate, that deal is expected to close in April.
"Because of the RREEF acquisition, Scudder will have access to real estate products that it didn’t have before," Swanezy says.
As a real estate investment manager, RREEF focuses on industrial, office, retail and multifamily properties in the 50 largest metropolitan areas in the U.S. It had $16.2 billion in assets under management as of year-end 2001, and its clients include California Public Employees’ Retirement System and Los Angeles County Employees’ Retirement Association.