Investors in Frankfurt-based SEB Asset Management AG’s 6.4 billion-euro ($8.3 billion) property mutual fund had until 1 p.m. today to decide whether to pull their money out of the fund, which will be liquidated if it’s unable to meet all demands for repayment.
SEB ImmoInvest (SEBIMMO), the largest of 13 German real-estate funds that suspended redemptions after the global financial crisis, was opened for one day to take requests. ImmoInvest has “considerably” more than 30 percent of its assets in cash or equivalents, after selling properties, SEB Asset Management Chief Executive Officer Barbara Knoflach said last month.
Since the global recession that ended in 2009, German real-estate mutual funds have struggled to meet redemption requests, causing six funds to be liquidated. Several more, including funds owned by Credit Suisse Group AG (CSGN) and UBS AG (UBSN), face deadlines this year to reopen or liquidate, according to Germany’s financial trade group, Bundesverband Investment und Asset Management, or BVI.
“If these funds liquidate, they will release a flood of properties into the market,” said Sonja Knorr, a Berlin-based analyst at Scope Analysis GmbH, a Germany ratings company.
SEB ImmoInvest (S3EA) is the first German property fund to open for one day to offer redemptions. The fund would allow withdrawals once a year, instead of daily, if it continues after today. More than 90 percent of the fund’s customers are small private investors, according to Knoflach.
SEB ImmoInvest has been closed for almost two years. The fund owns buildings in Paris, Singapore, Rome as well as 19 properties in Berlin’s Potsdamer Platz complex. Credit Suisse’s CS Euroreal fund owns La Befane shopping center in Rimini, Italy, and the Europa Galerie mall in Saarbruecken, Germany. CS Euroreal must tell investors this month whether they plan to reopen, according to regulatory deadlines.
“If SEB’s investors force it to shut down, it will be difficult for the next fund in line to stay open,” Knorr said.
SEB Asset Management, a unit of Skandinaviska Enskilda Banken AB (SEBA), is due to announce the level of requests for redemptions later today.
“The response from investors has been mostly positive,” Brigitte Schroll, a spokeswoman for SEB Asset Management, said by telephone. Bjoern Korschinowski, a spokesman for CS Euroreal, declined to comment.
If SEB ImmoInvest is wound up, its assets will be sold and the proceeds distributed to investors within a time frame set by BaFin, Germany’s financial regulator. In the past, BaFin has given asset managers three to five years to dispose of their holdings, Knorr said.
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