€500m waiting in wings for RREEF Fund II

RREEF has lined up the capital for its second infrastructure fund – which so far has held a first close on some €620m – but these commitments will only trickle through once the sale of Deutsche Bank’s global alternative asset management business is concluded.

Deutsche Bank’s global infrastructure and real estate investment management division, RREEF, is said to have some €500 million of capital waiting in the wings to be invested in its second infrastructure vehicle once the sale of the unit is finally concluded, sources familiar with the fundraising told Infrastructure Investor.

RREEF has so far held only a first close for its second European infrastructure fund on just over €620 million. The fund manager is said to be targeting between €2 billion and €3 billion for its second European vehicle, which it is looking to close later this year. Similar to its first European vehicle, which closed on €2.1 billion in 2007, Fund II is expected to target investments in ports, toll roads, airports and utility companies across the continent.

Sources cautioned, however, that not all of the €500 million is ready to be committed once the sale concludes and that RREEF may choose to hold a smaller closing in the immediate aftermath.

In the meantime, all eyes are now on the exclusive negotiations taking place between Deutsche Bank and Guggenheim Partners, which are focusing solely on RREEF. Originally, Deutsche Bank and Guggenheim had also been talking about a potential package deal including DWS Americas, the bank’s mutual fund business in the Americas; DB Advisors, the global institutional asset management business; and Deutsche Insurance Asset Management, the global insurance asset management business.

Deutsche Bank’s management board initiated a strategic review of its global asset management division on November 22, 2011. In February of this year, it was announced that the bank had entered into exclusive negotiations with Guggenheim, a New York- and Chicago-based firm with $125 billion of assets under management. 

As of March 31, 2011, RREEF employed some 600 professionals and had €41.8 billion in assets. The fund manager’s global infrastructure portfolio stood at more than €8 billion in assets under management at the end of 2010, having started out at €45 million in assets under management in 1994. RREEF Infrastructure has teams in Europe, Asia Pacific and the US.

Guggenheim does own an alternatives business, including aviation, real estate, private equity and quantitative alternative investment.