Degi ends suspension of redemption for Degi International

Degi, part of Aberdeen Property Investors, will end the three-month suspension of redemptions for its Degi International fund effective 30 January 2009. It is the first of 12 temporarily frozen German open-ended funds to end a ban on withdrawals implemented in end-October. Credit Suisse Asset Management, Morgan Stanley, AXA, KanAm grundinvest Fonds, Pramerica and SEB all announced last week they are extending the ban for an additional nine months as they fear a new massive wave of redemptions from investors.

Degi said that the resumption has widespread support from sales partners and major distribution channels. Similarly, large institutional investors, which represent less than 10% of the fund, have declared their willingness to continue holding units.

'New business flows in the last three months are evidence of investor and advisor support for the fund,' Degi said in a statement on Friday. Since redemptions were suspended on 30 October 2008, the fund has posted inflows of a total of EUR 65 mln from private investors. After ending the redemption freeze Degi International will have access to liquid reserves of around 25% of fund assets. In addition to the inflow of fresh investor capital, there has also been an increase in liquid assets available on a daily basis as a result of long-term earmarked bonds being converted to cash.

However, the company added that it will extend the redemption ban on units of its Degi Europa fund for a further nine months. 'Since the suspension of redemptions of units on 30 October 2008, it has not been possible to secure sufficient liquidity to end the suspension. The fund manager will continue its efforts to increase the level of liquid assets in the fund and expressly tries to end the suspension of redemption early.'

Degi currently runs two open-ended property funds for private investors, two open-ended property funds for institutional investors, one special property fund, plus two individual mandates. The company, with around 135 employees, manages a total of approximately EUR 6 bn.