RREEF Real Estate, which has been scaling down its US opportunistic investments team, recently has undergone further staff reductions, according to sources familiar with the matter. The real estate investment firm – with opportunistic teams in London and New York – is instead stepping up its focus on opportunistic investments in Europe, which is said to be a growing and increasingly important part of RREEF’s business. The downsizing is unrelated to the impending sale of RREEF, one of the businesses of Deutsche Alternative Asset Management that were put on the block late last year.
The staff reductions included the resignation of a director and two cuts involving junior positions – a vice president and an associate vice president. A Deutsche Bank spokeswoman declined to comment on the departures, but she stressed: “We remain very committed to our opportunistic business in the US, which remains a critical part of our business strategy.”
PERE understands that RREEF’s opportunistic business in the US, which was formed in 2003, has historically been relatively small. During its peak in 2006 and 2007, the New York-based US team included 12 to 15 staff. Since then, however, the team has been shrunk through a combination of layoffs and departures and currently stands at about three to five people following the most recent reductions. The remaining staff has been charged primarily with managing RREEF’s existing opportunistic real estate assets.
The principal target of RREEF’s opportunistic strategy, which is led by London-based global head Christopher Papachristophorou, is now Europe – a region that also is the focus of the firm’s current global opportunity fund. Indeed, as of 30 September, RREEF had $5.1 billion invested opportunistically in the region, compared to just $300 million in the Americas and $100 million in Asia, according to its website. Moreover, RREEF recently published a paper, “The Case for European Opportunistic Investing,” which argued in support of making opportunistic real estate investments in the region at the present time.
Opportunistic investments also account for the smallest portion of RREEF’s real estate investments in the US. By comparison, the firm has invested about $16.5 billion in core assets, $2.4 billion in value-added property and $12.2 billion in real estate securities.
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