GERMANY – Deka Immobilien Investment, Germany’s leading provider of real estate funds, saw its three flagship funds hit by almost €1.5bn in investor outflows during the first nine months of 2005.
The three funds, targeted mainly at retail investors, include a €4.9bn German fund, an €8.8bn European fund and a €2bn global fund.
Last year, Deka Immobilien’s German fund suffered €1.7bn in outflows due to a significant devaluation of the fund’s property assets and scandals that engulfed the provider’s management. The management has now been replaced, with Reinhardt Gennies as the new chief executive of Deka Immobilien.
However, investor fears about the health of Deka Immobilien’s other two funds were apparent in the first nine months of 2005. According to the provider, its European fund accounted for 66% of the €1.47bn in overall outflows between January and September.
The outflows at Deka Immobilien’s German fund also continued during the nine-month period, though were limited to €475m. Still, the provider said that it needed to inject €60m into the fund so that it could achieve a target return of 2% for its investors.
To further restructure the embattled fund, Deka Immobilien also said it would shed its foreign holdings – which currently represent 21% of the fund – and cut its exposure to logistical objects.
Finally, Deka Immobilien said that to boost the integrity of the three funds, each one would get its own management team.
Turning to real estate funds for institutional investors, Deka Immobilien said it would soon launch a fund that invests 70% of its assets in Europe and the rest in the US and Asia. The new fund aims to take in €750m in institutional assets by the end of 2008.
Deka Immobilien’s other institutional funds have almost €1bn in assets.