GLOBAL - Deutsche Bank's $440m acquisition of real estate investment manager, RREEF, will boost its distribution and alternatives network but falls short of nudging Australian giant Lend Lease off top spot.
The move will propel Deutsche as one of property management’s big boys, with combined assets under management of $36bn. The figure does compare favourably with Lend Lease which posted global assets under management of A$87bn (US$45.5bn) for 2001.
But Lend Lease registered a 2.8% dip in US assets under management for 2H, 2001. The drop was blamed on less transaction volume for acquisitions, coupled with several large dispositions on behalf of clients, and downward valuations. The firm said that it did not expect the US investment management business to pick up until 2003.
Deutsche Bank sealed its purchase of RoPro US Holding, RREEF’s holding company, from several Dutch real estate firms including Haslemere, Rodamco Europe, Rodamco North America and Robeco Groep. The firm’s activities will be merged into Deutsche unit, DB Real Estate. Currently, DB Real Estate manages more than $21bn.
US firm RREEF handles $16.2bn in assets under management, and focuses on industrial properties, office buildings, residential apartments, and shopping centres across the US.
Deutsche also paid a further $50m for co-investment assets relating to specific real estate transactions entered into by RREEF with select co-investors. The firm will now take on board 196 new clients consist primarily of US corporate and public pension funds, including the California Public Employees' Retirement System and Los Angeles County Employees' Retirement Association.
RREEF employs approximately 1,000 staff and operates in Chicago, San Francisco and New York. The ‘RREEF’ brand name will be kept and the senior management structure will remain unchanged.
The transaction is expected to close in the first half of 2002.
By Madhu Kalia
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