Credit Suisse to liquidate EUR 6b Euroreal fund

Credit Suisse is liquidating its EUR 6bn CS Euroreal property fund after too many investors opted to redeem their shares when it re-opened for one day of trading on Monday following a two-year freeze.

'We had one day to re-open and see what investors want and we let them take the vote,' a spokesperson told PropertyEU. 'We still have faith in the portfolio and investors will receive their first payment by the year-end.'

The spokesperson said that the payment amount still has to be set, although the open-ended fund had EUR 1.6bn liquidity when it re-opened this morning.
Credit Suisse now has until 30 April 2017 to wind down the fund.

Last year, the fund generated a return of just 0.73%, according to Credit Suisse. However, on average, the fund has generated an annual return of 3% in the past five years.

Credit Suisse has already sold 15 properties in the fund - with a combined value of EUR 1.4bn - over the past two years, taking the liquidity of the fund to 32%. Around 45% of the fund is invested in Germany with an additional 12.8% in the UK, 11.7% in Holland, 10.1% in France, 7.5% in Italy, 4.8% in Spain, 3.3% in Sweden and 4.8% in other markets. Around 60% of the fund is invested in offices, with an additional 30% in retail, 5% in parking and 3.8% in logistics.

Credit Suisse is not the first fund manager this month to announce that it will liquidate a German open-ended fund. Earlier this month, SEB Asset Management announced that it would liquidate its EUR6.3 bn ImmoInvest fund after too many investors opted to redeem their shares when it re-opened for one day of trading following a two-year freeze.

Another six German open-ended property funds are still frozen - with combined assets of around EUR 1.8bn under management - including SEB's EUR 284 mln Global Property fund and UBS's EUR 344 mln 3 Sector Real Estate fund. UBS has to decide by 6 October whether to re-open or dissolve the fund. SEB Asset Management has until December to reach a decision.

Almost 20% of Germany’s open-ended funds - with combined AUM of EUR 15.95 bn - are in the process of being liquidated. These include KanAm's grundinvest fund, which now has EUR 3.9bn of AUM following a spate of sales, and SEB's ImmoInvest fund. In total, Germany’s open-ended funds held EUR 85.21 bn of AUM at end-March 2012, according to the BVI, which represents the German mutual fund and asset management industry.