GERMANY - Aberdeen Asset Management's German property subsidiary said this week it would liquidate its €1.5bn Degi German open-ended property fund (GOEF) by 2014 following mounting speculation that it would be unable to generate sufficient liquidity to reopen it.
This week's announcement follows lengthy speculation over the future of a vehicle launched in 2003 and suspended since November 2009.
The decision to liquidate would guarantee equal treatment of all investors, according to the fund manager, who was unavailable for comment.
Despite the sales of eight assets worth 600m in recent months aimed at increasing liquidity, investors in the fund demanded liquidation.
The fund manager said he expected to close more sales from the 32-asset portfolio over the next few months.
It is currently in negotiations for the sale of seven assets for €700m.
Aberdeen will disperse the first tranche of payments to investors in April next year and every six months thereafter until October 2014.
CBRE associate director Iryna Pylypchuk, who tracks GOEF activity, said the news could end a recent spate of liquidations of open-ended funds that had tried, and failed, to keep liquidity at a level acceptable to investors.
It follows the announcement in August that Degi's 11-asset Global Business vehicle would be wound up by 2014 as a result of similar liquidity concerns.
Then, as now, sales of assets generated insufficient liquidity to reinvigorate the suspended funds.
Four more currently suspended GOEFs have until next May to decide whether to reopen or liquidate.
Pylypchuk said: "It's difficult to say whether they succeed or not. The uncertain environment doesn't help, but they're in a position to try to work their portfolios and raise liquidity - and they have time to do it."