If you talk today to staff at RREEF, the real estate and infrastructure investment management platform of Deutsche Bank, about its prospects for the future, you could well get a positive response.
That is understandable given the €41.9 billion manager this week was publicly included alongside other Deutsche Bank businesses – DWS Americas, DB Advisors and Deutsche Insurance Asset Management – on a list considered ‘integral parts’ of the bank’s newly configured Asset & Wealth Management (AWM) division.
The affirmative inclusion of the RREEF platform following first a review into the bank’s older global asset management division (of which RREEF was a part) that concluded in June and then a second, wider review of the whole bank concluding this week, not to mention an aborted sale to Guggenheim Partners, offers reliefs to its rank and file.
Minus some senior figures that departed mid-negotiation and review, the 550 professionals at RREEF can now set about driving the business forward, at least until 2015, when the bank hopes it will have contributed to AWM’s targeted increase to a cool €1 trillion in assets under management from €900 billion today.
Of course, the bank and its platform still have questions to answer to the outside world. Investors, partners and advisors of RREEF might accept that, just weeks into their new roles, Deutsche Bank’s co-chairmen Jurgen Fitschen and Anshu Jain were sensible not to ram through the offload of one of AWM’s higher fee-earning operations to Guggenheim. It also must be heartening for these groups to see such public support for the platform, even if that support was hinted at when it previously announced that exclusive negotiations with Guggenheim were over.
That said, they also will want to know what its real estate strategy looks like now. Which parts of RREEF’s global empire did Fitschen and Jain like the most? Equally, which parts seemed less attractive?
Certain departed senior executives and rival managers predict RREEF will play to its demonstrable strengths going forward. Core investments (€23.7 billion of total assets) and Americas investments (€21.6 billion) should figure prominently as it markets future opportunities to its investors (€16.6 billion of its capital under management comes from the Americas). RREEF, like any business trading through the global financial crisis, has had some failures, but it has evidenced successes in this space too. And, as one rival put it, their core business is “what a lot of investors want right now.”
On the opportunistic side, RREEF recently has made noise about doing more in Europe, and fund launches were mooted in the media even as the sale and reviews were ongoing. Chief investment officer Kurt Roeloffs told PERE in an interview as long ago as July last year how RREEF was eyeing Europe as the most interesting place for opportunistic investments.
Asia might need some new hires given a string of senior departures, most recently head Niel Thassim and chief investment officer Paul Keogh. But even in Asia, however, the bank won’t hesitate to remind people that large investments and high-profile mandates have been recently transacted and won – including during the review, when everything was supposedly up in the air.
Expect answers as early as next week, when it is understood AWM’s senior management will be revealed. When PERE asked its questions of Deutsche Bank and RREEF this week, we were told as much. Nonetheless, now that the review is done and the bank publically has revealed its macro-ambitions, insight into the strategic matters of the business it acquired a decade ago can’t come soon enough for those on the outside.