Thursday January 26, 2006

Panic selling hits another German property fund

business-times.asia1.com.sg :

The snowballing crisis in the German open-ended property fund sector appears to have claimed another victim, with SEB Immobilien-Investment saying that one of its funds had also seen heavy withdrawals last week. The SEB Immoinvest fund had seen withdrawals of 100 million euros (S$199 million) on Friday alone. The withdrawals meant that the liquidity of the 5.5-billion-euro fund had been cut to just one billion euros.

Germany's open-ended funds have nearly 89 billion euros of assets under management. Fears of a sector-wide crisis were first sparked last month when Deutsche Bank unit DB Real Estate took the unprecedented step of freezing one of its open-ended property funds. And last week, a Munich-based manager, KanAm, decided to freeze two of its funds - US-Grundinvest Fonds and Grundinvest Fonds.

The news persuaded the Bundesbank to intervene and warn against panic-selling in the sector. And even the government is alarmed, saying that it is mulling changes in the law in order to better protect investors in the future.

See also :

1. Deutsche Bank freezes property fund

(2006-01-26 13:05:52 SGT) [Biz] Permalink

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