Sweden's SEB re-opens German property fund to redemptions

SEB Asset Management, the Frankfurt-based funds manager of the Swedish banking group, at the end of May lifted the suspension of redemptions on its SEB ImmoInvest open-ended real estate fund, re-opening to capital withdrawals after nearly eight months of closure following the run on it and other funds in October last year.

The move is being watched carefully by other open-end property funds in Germany to see if a run on the fund develops or whether the trend of capital inflows since the start of this year into the community - which has around e85bn under management - shows that the mood has swung to a generally positive sentiment. Credit Suisse is widely expected to follow suit with its CS Euroreal property OEF, and possibly also the AXA insurance group, and others. SEB said at the start of this year that it would not be utilising the full statutory suspension period of nine months from the end of January, when it extended the initial three-month closure. "Positive signals from sales partners and the improved liquidity situation have prompted the fund's management to allow redemption to be resumed," it said. Since the redemption of unit certificates was suspended at the end of October, liquidity has improved by inflows of funds of more than e180m. Together with loan commitments for properties that can be drawn down at short notice, the fund has available cash funds of more than e1.1bn. SEB Asset Management is also introducing a separate unit certificate class for institutions in anticipation of the planned enhancements to the legal framework for open-ended real estate mutual funds. The structure will include the conditions published by the BVI, such as a 12-month notice period. SEB ImmoInvest generated a total return of 5.0% in the financial year

to end March. (Full story to appear in PFE 124 due to be published on Monday 8 June)