RREEF Infrastructure, the infrastructure investment arm of Deutsche Bank’s RREEF Alternative Investments, has scaled down its presence in the US market due to the slow pace of investment in US infrastructure, according to a person familiar with the matter.
RREEF Infrastructure has eliminated its US infrastructure team, according to the person, though key senior executives, such as Tim Keith, global head of infrastructure investments for RREEF, remain in place. Keith is based in New York.
RREEF has also eliminated its North America-focused infrastructure fund, the person said. RREEF's real estate operations have not been affected.
RREEF North American Infrastructure Fund was launched in 2007 and was seeking to raise $500 million, according to fundraising database InfrastructureConnect.
The fund made its seed investment in 2007 when it purchased Maher Terminals, an operator of port terminal facilities at the Port of Elizabeth, New Jersey and Port of Prince Rupert, British Columbia. The fund didn’t make any investments beyond Maher.
RREEF has transferred its interest in Maher on to Deutsche Bank’s balance sheet, the person said. The German investment bank is the sponsor for RREEF’s alternative investment funds.
The dismantling of the US operations was “largely due to the slow pace of US investors making investments in US infrastructure”, the person said. However, the firm will continue to monitor the US infrastructure space, the person said, and it plans to re-enter the market under more favourable conditions.
The news comes amid a difficult fundraising season for infrastructure and other illiquid asset classes. Infrastructure funds globally raised only $4.7 billion in the first half of the year, or about one-fifth their 2008 total, according to updated fundraising data recently provided to InfrastructureInvestor by San Francisco-based placement agent Probitas Partners.
Deutsche Bank is not alone in folding up a part of its infrastructure operations. So far this year, several financial sponsors, among them the Bank of Ireland, ING Real Estate and Spanish bank Santander, have halted fundraising for certain infrastructure funds they manage.
RREEF also invests in infrastructure in Europe and Australia. In Europe, it has raised €2 billion for infrastructure investments through the RREEF Pan-European Infrastructure Fund.
The firm remains committed to its teams and funds in Europe and Australia, the person said.
RREEF Infrastructure has more than €5.2 billion in assets under management, according RREEF’s website. Its parent division, RREEF Alternative Investments, also invests in private equity and real estate. As of June 2009, the firm had €42.9 billion in assets under management worldwide across infrastructure, private equity and real estate.