Aberdeen to wind down Degi Europa property fund

FRANKFURT: Aberdeen Asset Management's German real estate unit is to liquidate the €1.3 billion (RM5.63 billion) Degi Europa open fund it froze two years ago to prevent a glut of asset sales.

"After detailed investigation, we cannot guarantee that liquidity of over 30% needed to pay back investors can be ensured," Aberdeen Immobilien said on Friday, Oct 22, citing a "tense market situation" as the reason.

October is the legal deadline for funds, including those run by KanAm Group, Aberdeen Immobilien, and Morgan Stanley to reopen or liquidate after closing in 2008 at the peak of the global financial crisis.

Last month, Germany-based KanAm Group said it was winding down its troubled US-invested property fund because it saw little chance of liquidity returning to the US real estate market.

Earlier, Morgan Stanley said it was preparing to reopen its P2 Value fund and expected to resume business on Nov 1, helped by a rebound in European property markets.

The Aberdeen fund lost 23.7% of its value over the year to Sept 30 to stand at €1.3 billion.

As part of the wind-down, Aberdeen plans to repay investors in half-year intervals, starting in January and lasting until September 2013.

"Protecting our investors is our highest priority," the head of Germany's Aberdeen Asset Management unit said.

Figures from the German authority for investment and asset management (BVI) showed Germany's €87 billion open-ended property fund sector attracted around €2.7 billion of capital in the year to date.

Combined year-to-date inflows of the three funds facing the deadline to reopen this month was around €338,000. — Reuters