DB Real Estate raises $1.2b fund and buys Deutsche Bank portfolio.

DB Real Estate, the world's leading real estate equity investment manager and a unit of Deutsche Asset Management, announced it has raised a US$1.2 billion Global Real Estate Opportunities Fund from a group of investors consisting primarily of US and European institutional investors and high net worth individuals.

The fund has purchased most of Deutsche Bank's direct real estate private equity portfolio.

This portfolio, which is well-diversified by location, property type and investment strategy, consists of seasoned assets which were originated by the Real Estate Opportunities Group (REOG), part of DB Real Estate.

REOG will continue to manage the fund, now on behalf of its new investors.

The transaction, which closed on 31 December 2003, will correspondingly reduce Deutsche Bank's real estate holdings. Tom Hughes, a member of Deutsche Bank's Group Executive Committee and Global Head of Asset Management, said, "The closing of the fund demonstrates Deutsche Asset Management's leadership position in real estate.

"It also shows the strength of our relationships with institutional investors and high net worth individuals.

"The product aims to satisfy the investment needs of these investors and will be managed by a leading team of investment professionals."

Donald A. King, Jr, Global Head of DB Real Estate, said, "This has been a successful business for Deutsche Asset Management. REOG's strong performance to date has been a function of excellent real estate investment skills combined with sophisticated financial expertise. Now clients have access to this investment platform."

In addition, the fund investors will invest $300 million of the distributions from the Global Real Estate Opportunities Fund into a second opportunistic fund that will have an investment strategy consistent with that of the Global Real Estate Opportunities Fund.

One or more affiliates of Deutsche Bank will commit up to $60 million to this reinvestment vehicle.