Aberdeen to liquidate EUR 1.5b Degi International

The high number of redemption requests for Degi International has forced fund manager Aberdeen Immobilien KAG to rethink the re-opening of the open-ended fund, which has been frozen since November 2009.

In a statement on Tuesday, Aberdeen said in-depth talks with the sales partners have revealed that the redemption requests of the 70,000 investors would exceed the liquidity ratio in case the fund were to be re-opened. As such, the company has decided to retain the suspension of redemptions and to liquidate the fund by October 15, 2014. The move is aimed at ensuring the equal treatment of all investors, Aberdeen added.

The vehicle was initially planned to reopen in November.

'We cannot expect to have sufficient liquidity in mid-November to ensure that all investors who wish to redeem their shares can actually do so if we re-open Degi International and we have opted for semi-annual repayments during the liquidation period to guarantee that all investor groups are treated equally,' commented on Tuesday Hartmut Leser, CEO of Aberdeen Asset Management Deutschland. The first instalment will be paid in April 2012.

BaFin had set a deadline of November by which Aberdeen had to declare whether the fund would reopen or face liquidation.

Degi International currently owns a 32-property strong portfolio worth around EUR 1.5 bn. Since its redemption halt for liquidity reasons, the fund sold eight properties valued at about EUR 600 mln. According to the press statement, the divestment of other nine assets worth a total of EUR 700 mln is already underway.

Aberdeen's Degi Europa fund is also being liquidated. Degi International's proposed closure comes shortly after AXA REIM's announcement last week that it is liquidating its frozen EUR 2.5 bn Immoselect fund, due to liquidity problems.