KanAm presses ahead with liquidation of Grundinvest fund

Munich-based fund manager KanAm Grund Kapitalanlagegesellschaft is pressing ahead with plans to liquidate its EUR 6.3 bn Grundinvest fund, citing ‘uncertainty among investors caused by the euro crisis and the public debate on the future of open-ended real estate funds’.

German regulator Bafin has given KanAm until the end of December 2016 to wind down the fund, which comprises 51 properties - largely offices - in nine countries, including the UK, France, the Netherlands, Belgium and Spain.

'This time helps us to get the best price. It’s a good portfolio, which mainly consists of Class A offices. We are already negotiating the sale of around EUR 1 bn of assets in the portfolio,’ a spokesman for the company told PropertyEU.

So far investor interest has come from both European institutional investors and Asian and Middle Eastern funds, the spokesman told PropertyEU. He declined to comment on which properties had garnered the most interest. However, the fund manager is believed to have a number of trophy assets in the portfolio, including a number of key US office properties.

Since freezing the fund almost two years ago, KanAm has already sold EUR 1 bn of assets, including properties in Europe and North America. KanAm will return at least EUR 200 mln to investors by the end of March, the spokesman added. Further payments will be made every six months, depending on property sales.

KanAm is now talking to investors to decide on the fate of its smaller Spezial Grundinvest fund, which has around EUR 359 mln of assets under management. The fund, which is frozen to redemptions, has until 2 May to announce whether it will re-open or be liquidated. In addition to KanAm’s two funds, there are 11 German open-ended funds which are either frozen to redemptions or in the process of being liquidated. Combined, they have around EUR 24 bn of assets under management, according to industry body BVI.