When RREEF’s Asia chief investment officer Mark Fogle and head of acquisitions Brian Chinappi handed in their resignations in March, question marks were raised over where the bank-sponsored platform’s investment strategy was heading.
Fogle, who has yet to take another role, and Chinappi, who has since been named global head of real estate investment at Standard Chartered, were the latest in a number of senior departures from the Asia platform at the alternative asset and investment management arm of Deutsche Bank. In October, Jon Tenaka, RREEF’s Japan head, left for Angelo, Gordon & Co, and in June, Philip Levinson, RREEF’s head of client relations, departed for The Blackstone Group to aid its fundraising efforts.
But while RREEF’s staff count in Asia has reduced, the region is still important to its global strategy, according to head of Asia, Niel Thassim, and head of EMEA, Pierre Cherki.
While RREEF’s staff count in Asia has reduced, the region is still important to its global strategy
The firm is currently focused on managing existing investments and capital but both maintain expansion in the region is still on the cards, despite a streamlining of its business following the global financial crisis. The platform had 100 staff in Asia in 2008, compared with 60 today.
Prior infrastructure, private equity and hedge fund businesses have been curtailed leaving a focus on direct real estate and real estate securities investment. RREEF’s prior wider geographical remit, encompassing South East Asia, has also been reduced to three core markets: Greater China, Korea and Japan. Despite this, Thassim said the firm is still able to invest capital.
On the direct side, core investment has taken centre stage, accounting for approximately 75 percent of its activities. This is in line with the firm’s global strategy, with opportunity investments accounting for 25 percent. Despite the freeze on its plans for a third global opportunity fund last year, RREEF insists there is still scope to make opportunistic investments in Asia and that the firm currently has $500 million of capital available for investment from its German open-ended funds and from other offshore investors.
Thassim said Fogle and Chinappi both played a part in RREEF’s opportunity and core investing but did not link their departures to RREEF’s focus on core investments. While opportunity investing was previously executed via RREEF’s global funds, it can still complete “high yield” investments.
Cherki said: “We are still capable of investing in high-yield opportunities. We have a wide range of relationships with investors and can raise capital for specific investments.” And he said that blind pool funds are not off the table. “That has to be part of the structure of any high-yield product,” he said. “In due course we will work with the right product and strategy.”
RREEF insists there is still scope to make opportunistic investments in Asia and that the firm currently has $500 million of capital available
“The key thing about our Asia business is that we have a deep bench and a focused strategy around our core markets as well as the right balance between core and opportunistic investments,” Cherki added.
Thassim pointed out RREEF has been actively trading in Asia recently. In March, it sold its Beijing Gateway plaza building from its Hong Kong REIT, RREEF CCT, to a fund managed by Singapore-based Mapletree for a reported RMB2.9 billion (€313 million; $424.7 million). The firm, which managed just under $54 billion in assets worldwide as of 31 December 2009, has also made some investments in Asia including in Tokyo and Seoul.