DWS continues to be among the more diverse managers of real assets in the US and globally, offering strategies across real estate, private equity and commercial real estate debt, infrastructure, private equity and debt, commodities, and liquid strategies, with assets totalling $91bn.
With a US real estate platform dating back more than four decades and an infrastructure platform going back nearly three decades, the firm has a considerable foothold in these parts of the market. DWS's assets under management from insurance companies globally in real estate and infrastructure assets total $10.5bn, through funds or separate accounts—in the Americas that figure has grown steadily and now totals $3.7bn (as of March, 2023).
Given the recent confluence of macroeconomic events—interest rate hikes, lenders leaving the private lending market, regional bank and lending concerns, interest in more stable assets, and market dislocation—real asset debt interest has been renewed.
DWS established a novel private infrastructure debt capability to deliver qualified insurers access more efficiently to senior secured infrastructure loans in a CLO structure, packaging them to provide income through a rated access point and allowing investors to customise the rating and therefore the corresponding capital treatment of their allocation to infrastructure debt. The platform is able to deliver exposure to higher-yielding private infrastructure debt loans through a customisable combination of liquid investment-grade fixed-income instruments. Furthermore, the program gives insurers optionality to participate in the equity tranches of the CLO structures as well as the debt tranches. Across the four rated term infrastructure CLOs the team has issued, insurers have represented 37%, 63%, 47%, and 41% of the capital raised for each, respectively.
Across these four vehicles, the program has 19 insurance investors accounting for 45% of total program investors, many of which have been buyers of multiple CLO issuances.
As one of the larger property managers in the U.S. and the world, and with a significant number of insurance investors in its strategies, DWS was also very active engaging with investors on the dynamics occurring in US real estate during the past two years. The firm has been diligent in providing investors with market and sector perspective, whether brought on by office occupancy/return to office, interest rates, or lending concerns from regional banks.
The care and innovation in dealing with insurance clients make DWS a worthy winner of this year's real asset manager of the year.
