German fund industry assocation BVI has criticised the proposed abolition of open-ended real estate funds as part of the implementation of the AIFM Directive into German law as detrimental to small investors. In a statement published on Monday, BVI chief Thomas Richter said that a ban on new open-ended funds in Germany 'would outlaw many retail investors from the property market'. He noted that there was no alternative to GOEFs for this group of investors, who, thanks to the open-ended vehicles, had enjoyed access to the real estate market without being exposed to the vagaries of the stock market since 1959.
German fund industry assocation BVI has criticised the proposed abolition of open-ended real estate funds as part of the implementation of the AIFM Directive into German law as detrimental to small investors. In a statement published on Monday, BVI chief Thomas Richter said that a ban on new open-ended funds in Germany 'would outlaw many retail investors from the property market'. He noted that there was no alternative to GOEFs for this group of investors, who, thanks to the open-ended vehicles, had enjoyed access to the real estate market without being exposed to the vagaries of the stock market since 1959.
The EU Directive on Alternative Investment Fund Managers (AIFMD) is due to be implemented into national law by 22 July 2013.
Richter pointed out that investments in open-ended funds were possible from EUR 25 whereas those in closed-end funds will in future start from EUR 50,000 without offering the same diversification as GOEFs. The open-ended funds have delivered average returns in the past 30 years of 5.4% a year, he added.
A ban on GOEFs, said Richter, would confine retail investors to the asset classes of equities and bonds, exposing them to higher risks than their wealthier counterparts who are able to diversify their investments more strongly and can afford direct or indirect real estate investments. 'That is socially unjust and damages small investors,' he said.
