German property funds extend their Oct. freeze
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Reuters
Oluşturulma Tarihi: Ocak 26, 2009 00:00
FRANKFURT - Several German property funds shut for withdrawals since end-October extended their freeze on redemptions by up to nine months, saying they lacked the liquidity needed to satisfy many investors' desire for cash. It was three months ago, 12 so-called open-ended funds were closed for withdrawals, most for an initial period of three months.
Three months ago, 12 so-called open-ended German real estate funds with a combined 32 billion euros ($41.5 billion) worth of assets under management -- 38 percent of the total invested in all such funds registered in Germany -- were closed for withdrawals, most for an initial period of three months.
Open-ended means, in theory, that investors can inject or withdraw money from such funds on a daily basis. Under German law, the funds must have liquidity corresponding to a minimum of 5 percent of assets to meet redemptions and are allowed to put payouts on hold temporarily if that limit is threatened.
The late October closures came after a flood of cash calls from investors running scared amid the unprecedented financial market turbulence triggered partly by the mid-September collapse of U.S. investment bank Lehman Brothers.
"We reduced our holdings of open-ended property funds to ensure liquidity for our investors," Eckhard Sauren, head of fund-of-funds company Sauren, told a conference on Friday, adding that his funds also faced withdrawals in late 2008.
Sauren's Global Defensive multi-asset fund of funds, with more than 1.2 billion euros ($1.56 billion) in assets under management, cut its exposure to German open-ended property funds to 15 percent by end-2008 from over 50 percent at end-June, switching mainly into convertible and corporate bonds, he said.
Sonja Knorr, analyst at funds rating company Scope, said the woes of some German open-ended property funds had been aggravated by them holding part of their liquidity in Icelandic bonds and structured mortgage-linked securities, assets which proved unmarketable during the late 2008 turmoil.
Property investors DEGI, part of UK asset managers Aberdeen, said its 2.5-billion-euro DEGI INTERNATIONAL fund, which was frozen for redemptions on Oct. 30, would re-open on Jan. 30.
Since the closing, the fund has seen inflows of more than 65 million euros, bringing liquidity to 25 percent of assets, DEGI said in a statement. The 1.7-billion-euro DEGI EUROPE fund, however, would remain closed, the company said.
Asset managers KanAM Grund Kapitalanlagegesellschaft said it would extend the freeze of its 4.7-billion-euro KanAm grundinvest and 480-million-euro KanAm US-grundinvest funds.
AXA Investment Managers Deutschland, part of French insurer AXA, said the liquidity of its 3.6-billion-euro AXA Immoselect fund had improved since late October but not enough to meet the expected volume of withdrawals. SEB's 6.3-billion-euro Immoinvest fund would stay shut due to liquidity constraints despite over 90 million euros of net inflows since end-October, the Swedish bank said.
TMW Pramerica Property Investment said its 1.0-billion-euro TMW Immobilien Welt fund would remain closed.
Open-ended means, in theory, that investors can inject or withdraw money from such funds on a daily basis. Under German law, the funds must have liquidity corresponding to a minimum of 5 percent of assets to meet redemptions and are allowed to put payouts on hold temporarily if that limit is threatened.
The late October closures came after a flood of cash calls from investors running scared amid the unprecedented financial market turbulence triggered partly by the mid-September collapse of U.S. investment bank Lehman Brothers.
"We reduced our holdings of open-ended property funds to ensure liquidity for our investors," Eckhard Sauren, head of fund-of-funds company Sauren, told a conference on Friday, adding that his funds also faced withdrawals in late 2008.
Sauren's Global Defensive multi-asset fund of funds, with more than 1.2 billion euros ($1.56 billion) in assets under management, cut its exposure to German open-ended property funds to 15 percent by end-2008 from over 50 percent at end-June, switching mainly into convertible and corporate bonds, he said.
Sonja Knorr, analyst at funds rating company Scope, said the woes of some German open-ended property funds had been aggravated by them holding part of their liquidity in Icelandic bonds and structured mortgage-linked securities, assets which proved unmarketable during the late 2008 turmoil.
Property investors DEGI, part of UK asset managers Aberdeen, said its 2.5-billion-euro DEGI INTERNATIONAL fund, which was frozen for redemptions on Oct. 30, would re-open on Jan. 30.
Since the closing, the fund has seen inflows of more than 65 million euros, bringing liquidity to 25 percent of assets, DEGI said in a statement. The 1.7-billion-euro DEGI EUROPE fund, however, would remain closed, the company said.
Asset managers KanAM Grund Kapitalanlagegesellschaft said it would extend the freeze of its 4.7-billion-euro KanAm grundinvest and 480-million-euro KanAm US-grundinvest funds.
AXA Investment Managers Deutschland, part of French insurer AXA, said the liquidity of its 3.6-billion-euro AXA Immoselect fund had improved since late October but not enough to meet the expected volume of withdrawals. SEB's 6.3-billion-euro Immoinvest fund would stay shut due to liquidity constraints despite over 90 million euros of net inflows since end-October, the Swedish bank said.
TMW Pramerica Property Investment said its 1.0-billion-euro TMW Immobilien Welt fund would remain closed.