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RREEF shelves plan for $1.5bn global opportunity fund

RREEF can be added to the list of names of large, established managers who feel the time is not right to raise a global opportunistic fund amid investor uncertainty in the market.

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RREEF, the real estate and infrastructure management arm of Deutsche Bank, has dropped plans to begin raising its next global opportunity fund.

The New York-based firm was sounding out investors earlier this year about appetite for RREEF Global Opportunities III with a provisional target of $1.5 billion equity commitments. However, PERE has learned that the firm has decided not to attempt to raise the fund given the level of uncertainly among institutional investors towards real estate investing as well as concerns about their capital constraints.

RREEF is not the only international fund manager to shelve such a vehicle. Other large real estate investment managers have either cancelled or decided against raising a global opportunity fund, notably ING Real Estate earlier this year.

RREEF declined to comment, but the decision is thought to have been made after March, when representatives of its opportunistic business were holding meetings with potential investors.

The last global opportunity fund RREEF raised was in October 2006 when it closed RREEF Real Estate Opportunities Fund II with $1.6 billion of commitments from investors in the US, Europe and Asia. That fund began making investments since first closing in December 2005. One of that fund’s earliest investments was the acquisition of the Little Britain office complex in London’s financial district. It also acquired French department store group, Printemps.

Like many other firms with global funds, RREEF has not been in investment mode of late. However, in July, RREEF Spezial Invest, a set of global funds managed by the alternative investments division of Deutsche Bank, announced it had acquired two properties in the UK and one in France for a combined €100million.

RREEF Spezial Invest in Germany currently manages five funds for institutional clients with assets worth around € 1.7 billion.

Georg Allendorf, a managing director at RREEF, said in a statement in July that European office and logistics properties in good locations and of medium size were ideal for RREEF Spezial Invest investments’ funds.

“The current market conditions present excellent opportunities for us to obtain high quality properties for our clients at competitive pricing,” he added.