GERMANY - Redemption freezes have been reinstated on a number of German open-ended funds (GEOFs), including Aberdeen Immobilien Kapitalanlagegesellschaft's (formerly DEGI) and the DEGI Europa and DEGI International funds, which both include institutional money.

Affected fund managers have cited liquidity problems in the market, although a spokesperson for Aberdeen said recent redemptions for the international fund were all from retail capital, rather than institutional investors.

Only 7% of the capital invested in both Aberdeen funds belongs to institutional investors.
In January 2009, institutional capital made up 10% of DEGI International and at that time Aberdeen said the institutional investors in the funds were "satisfied by the quality of the holdings and have declared their willingness to continue holding units".

Aberdeen said "the situation had initially calmed down" following the resumption of share redemptions in DEGI International at the end of January 2009.

February 2009 saw a drain of approximately €260m but the monthly outflow had dropped to approximately €18m by May 2009.

"A complete recovery and a return to a net inflow of capital seemed within reach," Aberdeen has argued.

"Yet in June of this year, the public debate regarding possible loss exposures for open-ended property funds flared up again, creating renewed unease among investors."

Between June 2009 and September 2009, the DEGI International sustained a net capital drain totalling €250m.

Aberdeen said it had suspended the redemption shares of both Europa and International funds "to safeguard the ongoing business operations and to pro¬tect the interest of the remaining investors".