Deutsche Bank launches new €700m open-ended fund

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Deutsche Bank subsidiary Deutsche Asset & Wealth Management (formerly RREEF) is launching a new €700m German open-ended real estate fund, the Grundbesitz Fokus Deutschland. The launch date is 1st October.

This is the first fund launched by Germany’s largest bank under the new KAGB capital investment code, and the first new open-ended fund from the bank in 14 years. The fund, aimed largely at private investors interested in fixed asset investments with long-term investment horizons, will invest in commercial and residential property throughout Germany. DeAWM said it is looking for achieving a balanced mix of locations, buildings, tenant structures and lease durations, with an emphasis on growth regions including mid-sized cities in the mix.

According to Ulrich Steinmetz, head of DeAWM’s open-ended funds division, commented: “This is the right time to invest in fixed assets and to launch a new open-ended real estate fund. Alongside our existing global and European-focused funds, the Grundbesitz Fokus Deutschland offers our investors a third product clearly differentiated, focused and underpinned by our extensive real estate expertise.” Shares in the fund will be offered nationwide in all Deutsche Bank bank branches from 1st October.

The new legislation affecting Germany’ open-ended funds kicked in in July last year, and among a number of changes designed to enhance investor security, stipulates a minimum investment period of 24 months and a redemption notice period of 12 months for new investors.

Only a small number of the older German open-end real estate funds are left in the market as many closed during the run on liquidity during the financial crisis, only to be hit again – after a few had succeeded in reopening briefly – by market uncertainty arising from publication of draft legislation in May 2010.

Altogether 15 funds were forced into liquidation, while a further three are frozen and could liquidate this year. DeAWM employs 140 people in its real estate business, managing

about 500 properties in Germany valued at over €6bn. Internationally, it holds €34bn in its Grundbesitz Europa fund as well as in several closed-end funds for private investors and special purpose vehicles for institutional clients.