Guggenheim in exclusive talks to buy Deutsche Bank units

RREEF Real Estate could be heading to New York and Chicago-based Guggenheim Partners as the latter enters exclusive talks to buy parts of Deutsche Bank Asset Management put up for sale last year.

Guggenheim Partners, the New York and Chicago-based firm with $125 billion of assets under management appears to be the favourite to take over RREEF Real Estate as part of a larger corporate deal to buy parts of Deutsche Bank Asset Management put up for sale last year.

In an announcement this afternoon, Deutsche Bank said it was in exclusive negotiations with Guggenheim over the sale of its Asset Management businesses that are subject to the previously-announced strategic review.

The bank did not expressly say Guggenheim was interested in buying all the different parts for sale, but it went on to list the businesses that were part of the strategic review, including DWS Americas, the Americas mutual fund business; DB Advisors, the global institutional asset management business; Deutsche Insurance Asset Management, the global insurance asset management business; and RREEF, the global alternative asset management business, which houses real estate and infrastructure.

The announcement did not go into any other details except to say that the exclusive negotiations follow Deutsche Bank’s announcement on November 22, 2011, that it would conduct a strategic review of its Asset Management division globally except for the DWS franchise in Germany, Europe and Asia, which the bank had already determined to be a core part of its retail offering in those markets.

It also described Guggenheim Partners as a diversified financial services firm with significant expertise in institutional asset management serving the insurance and pension sectors, as well as in intermediary-focused investments through a broad range of mutual fund solutions.

Other names to have been thrown into the hat in recent weeks included Macquarie Group, the Australian banking group, JPMorganChase & Co, Wells Fargo, State Street Corp and Ameriprise Financial. Recent reports suggested some of the parties withdrew from the process a few weeks ago.

Of particular interest to those within private equity real estate is the alternatives businesses – RREEF Real Estate, RREEF Infrastructure and DB Private Equity.

Whoever eventually ends up owning RREEF Real Estate would inherit a platform with 600 professionals and around €41.8 billion of property assets as of 31 March 2011. Within the portfolio are core, value-added, securities and opportunistic assets, though most assets are in core real estate and securities. Some €22 billion of its property under management are in the Americas, while €16.6 billon is in Europe, and €3.4 billion in Asia Pacific.

Guggenheim does own an alternatives business. Within that is aviation, real estate, private equity and quantitative alternative investment. Guggenheim’s Real Estate team invests across the full spectrum of the US real estate market, including directly-owned properties, public market equity, private equity funds, public debt securities and high-yield private debt.