Deutsche Bank's year-long strategic review of RREEF – which at one point saw the global alternative asset management business on the cusp of being sold to Guggenheim Partners – has led to fundraising being postponed for its second European infrastructure fund.
The aborted sales process had already put a damper on fundraising for Fund II, which was said to be targeting between €2 billion and €3 billion and had managed to reach a first close on €620 million. Sources at PERE's sister magazine, Infrastructure Investor, had previously indicated that a further €500 million was waiting in the wings for the conclusion of the sales process.
But the standstill period led the fund's current investors to ask RREEF to redesign Fund II, partly to take into account the risks brought on by the sovereign debt crisis sweeping the Eurozone. This has led RREEF to pull the plug on fundraising and go back to the drawing board with a view to relaunching Fund II sometime in 2013.
The fund will, however, get to keep the €620 million it had managed to raise for its first close. RREEF already manages a €2.1 billion infrastructure fund, closed in 2007.
A spokesman from Deutsche Bank declined to comment on the postponement.
In the end, Deutsche Bank decided to keep RREEF as an integral part of its business, consolidating it into the bank's newly integrated Asset & Wealth Management (AWM) division.
In addition to RREEF, the bank’s other asset management businesses – DWS Americas, its mutual fund business in the Americas; DB Advisors, its global institutional asset management business; and Deutsche Insurance Asset Management, its global insurance asset management business – also will be a part of AWM.
RREEF initially was placed on the selling block late last year and, as recently as three months ago, it appeared as though the business would be getting a new owner. In February, New York- and Chicago-based Guggenheim Partners entered into exclusive negotiations to purchase parts of Deutsche Bank Asset Management, including RREEF, which currently manages €41.9 billion in assets. The other parts on the negotiation table were DWS Americas, DB Advisors and Deutsche Insurance Asset Management.
In May, Deutsche Bank and Guggenheim agreed to end exclusive negotiations on buying three parts of the asset management division with a view to focusing solely on a deal for RREEF. In June, the negotiations ended after both parties “were unable to agree on terms for the sale of the business,” according to Deutsche Bank.