Deutsche Bank said that it is acquiring RREEF, a U.S. real estate investment management group, in a deal valued at US$490 million.

Deutsche paid approximately US$440 million for RREEF's operations and will spend an additional $50 million for co-investment assets RREEF has with certain partners, the company said.

As of Dec. 31, RREEF had approximately US$16.2 billion in assets under management. Most of RREEF's 196 clients include U.S. corporate and public pension funds. The firm invests primarily in commercial real estate in the 50 largest U.S. metropolitan areas.

The acquisition follows Deutsche's purchase of Zurich Scudder in September for $2.5 billion. That deal catapulted Deutsche from being the ninth largest asset management group in the world to fourth behind Allianz UBS and Fidelity.

With the RREEF acquisition, Deutsche will become the largest adviser of real estate and real estate equity securities globally with more than US$36 billion in assets under management, said Richard Gunthel, managing director and head of DB Real Estate.

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