More German property funds to re-open over next weeks - Kutscher

More German open-end property funds should re-open for investors over the next few weeks but the sector still has to solve the problem of how to deal with institutional and private investors in one vehicle, says the chairman of the nation's second largest fund manager Union Investment. Reinhard Kutscher told a panel session at the Handelsblatt annual conference in Berlin yesterday that the public and the authorities are watching the situation carefully. German property OEFs have around e86bn under management. Around a dozen closed suddenly after a run on redemptions last October in the wake of the Lehman Brothers collapse. Only one or two funds re-opened in January after an initial statutory three-month closure. Under the German investment law, funds are permitted to decline capital withdrawal by investors for a maximum of 24 months, and then must liquidate if they cannot re-open. "I anticipate that we will see more fund openings over the next few weeks and so this will start to normalise the situation," Kutscher said. He gave not details. Union Investment, part of the German cooperative banking group, owns around e14bn in assets in funds which remained open during the October crisis. The sector, through the investment fund association BVI, has made a proposal to the federal finance minstry to change the Investment Law to distinguish between institutional and for private investors going forward. (Full story to be published in 120 Property Finance Europe, published on Monday 11 May 2009)