Aberdeen to liquidate Degi Global Business by 2014

Aberdeen Asset Management announced plans on Thursday to dissolve its Degi Global Business open-ended real estate fund by June 2014. The company said it will undertake an 'orderly disposal' of the fund's portfolio, which currently comprises 11 assets valued at EUR 254 mln.

Degi Global Business, which is dedicated to institutional investors, was launched in November 2005 to create a broadly diversified investment portfolio in Europe and Northern America. Despite having returned 5% on average in the first four years of business, investors panicked in late 2009 after they realised that the fund was overexposed in crisis-hit markets in eastern Europe. In particular, the value of the fund's real estate developments in Croatia and Romania suffered bitter setbacks.

As a result, the fund was hit by massive outflows and had to close in mid-November. Since then, Degi Global Business has been trying to sell assets to pay down investors and improve its liquidity ratio, which currently stands at 12.8%.

It has so far divested an office property in Cologne and Helsinki for EUR 55 mln, and is currently in the final stages of offloading a further two properties for EUR 50 mln. The marketing process for additional assets is already underway, the company said.