Deutsche Bank's equity derivatives structured product group is developing its first products that will provide investors with real estate exposure, some of which will use total-return swaps. These instruments, which will be used as wrappers, will allow investors that are restricted from investing in real estate to receive synthetic exposure to a fund, said Geert Bossuyt, director in structured products in London. He explained that investors have been asking for ways to gain exposure to real estate for extra yield as equity markets fall and interest rates remain low.
The funds will be actively managed investments in commercial and residential real estate securities and properties in the U.S., Europe and a small portion in Asia. Deutsche Bank is looking at investing in open-ended real estate funds, real estate investment trusts and shares in investment companies, but Bossuyt stressed that the plans are not yet final. The firm is aiming to have the products ready for the market in April and they will be targeted at retail and private banking clients. Deutsche Bank is not targeting institutional clients because they can invest directly in real estate securities or properties, he noted.
The first phase will be developing products aimed at European investors and then secondly, Deutsche Bank will look toward developing products for the U.S., Bossuyt added.
