DWS plans 2019 launch of €3bn third fund – exclusive

The group’s second fund has made six investments and is roughly 60% deployed after raising €1.8bn in July 2017.

DWS, Deutsche Bank’s listed asset management arm, is looking to re-enter the market early next year to raise its third fund, thought to be targeting about €3 billion, Infrastructure Investor has learnt.

The new offering is expected to continue DWS’s current European mid-market strategy with a slight bias towards transportation assets and targeting a net IRR of about 10 percent.

DWS is also understood to be building up its infrastructure debt platforms in both the US and Europe. A senior debt strategy in the US is deployed across several types of energy assets, while its European platform is believed to have been seeded with €500 million from Deutsche Bank and has been invested in UK renewables, French transport deals and a Danish telecom asset.

Infrastructure Investor has learnt that the firm is in the process of opening up its European debt platforms beyond the German market, which could lead to future funds closing north of €2 billion.

DWS declined to comment on any potential fundraising processes.

The planned vehicle would follow the July 2017 closing of DWS’s Pan European Infrastructure II fund on €1.8 billion, which also secured a further €800 million for co-investments. That fund is now thought to be about 60 percent invested, with a further one or two additional acquisitions expected to fill out the portfolio.

Infrastructure Investor understands DWS is currently undergoing due diligence on about three assets as part of this process, including Euroports, the port operator owned by Brookfield, Antin and Arcus. Fund II has so far secured six investments including rail groups Akiem and Corelink, Italian harbour towage business Rimorchiatori Mediterranei and Venice Airport group.

DWS is also believed to be in the sales process for assets such as UK water group Kelda and Germany’s Port of Lubeck remaining from its 2007-vintage maiden fund, which closed on €2.1 billion.

PEIF I is thought to be generating a net IRR of about 12.5 percent, although this could be boosted as DWS awaits the results of its arbitration against the Spanish government for cuts to its renewable energy assets’ tariffs. DWS was a shareholder in the Andasol plants for which Antin successfully received €112 million earlier this year, and is also awaiting rulings on other solar thermal projects and a wind farm.