Mixed fortunes for DEGI funds

The German fund manager says it has had to prolong the period of suspending redemptions on one fund, while it is able to lift suspensions on another.

DEGI, the German property fund manager, will extend the period of suspending redemptions for a further nine months on its DEGI Europa vehicle.

In a statement, the manger said since the suspension was first introduced in October it has not been possible to “secure sufficient liquidity” to lift it. However, in a separate move, DEGI said it was able to end restrictions on investors withdrawing funds from its DEGI International fund, also in effect since October.

Large institutional investors, which represent less than 10 percent of the vehicle are “satisfied by the quality of the holdings” and have “declared their willingness to continue holding units,” said DEGI, which is owned by Aberdeen Property Investors.

Launched in 1972, DEGI Europa was one of the first German open-ended property funds in Germany. DEGI International was launched in 2003 and also invests globally.

The update comes against a backdrop of widespread redemptions by investors from open-ended real estate funds managed in Germany as a result of a combination of factors such as the denominator effect, the German government’s decision to guarantee bank savings but not fund investments and a general declining investor sentiment towards real estate investment. As a result, 13 German open ended funds were forced to suspend redemptions in a bid to meet liquidity criteria.