Amsterdam-based investment bank Kempen and Co. has decided to terminate its property hedge fund following significant losses last year, Paul Gerla, director investment management, told Dutch financial daily het Financieele Dagblad.
Amsterdam-based investment bank Kempen and Co. has decided to terminate its property hedge fund following significant losses last year, Paul Gerla, director investment management, told Dutch financial daily het Financieele Dagblad.
The Kempen Property Hedge Fund was set up in 2007, but in the past 18 months the fund has failed to realise its targeted yields of 10%-12% annually. In 2008, it booked a loss of 30% after posting a profit of 12% on a total investment of EUR 150 mln in 2007.
The level of repayments to investors will depend on when they stepped into the fund, Gerla said. Investors who joined at the beginning will make a loss of 22%. Kempen said in a letter to participants that it not expect the poor market conditions to normalise 'within the foreseeable future'. ' The size and liquidity of the listed real estate market has shrunk. As a result, it has become more difficult to set out a long/short strategy. The volatility of real estate shares has made the fund a lot more risky than originally intended.'
