Germany's investment and asset management body BVI has unveiled plans to future-proof the beleaguered open-ended fund (GOEF) sector following three major fund liquidations in recent months and a wave of suspensions in the past two years.
Germany's investment and asset management body BVI has unveiled plans to future-proof the beleaguered open-ended fund (GOEF) sector following three major fund liquidations in recent months and a wave of suspensions in the past two years.
The proposals, which are aimed at offering private investors in particular more protection, come ahead of parliamentary finance committee hearings of proposed new government legislation for the sector on 1 December.
The BVI's plans include introducing separate funds for institutional investors, reducing the holding period for normal retail funds to a year and introducing a 12-month notice period for insitutional investors. Open-ended fund properties will also be valued on a quarterly basis.
'These proposals complement the draft government proposals [for the open-ended sector, ed] and are designed to protect private investors in particular,' said BVI's Stefan Seip. 'They will make GOEFs more stable and attractive for investors seeking to take part in the growth of real estate markets in a way that spreads their risks.'
Germany's open-ended fund industry was hit by a liquidity crunch during the financial crisis two years ago which saw a mass exodus of investors. Nearly a dozen funds were forced to suspend redemptions to stem the outflow of cash. Three funds - Morgan Stanley P2 Value, Degi Europa and KanAm US grundinvest - chose to liquidate at end-October rather than reopen.
