Pramerica Real Estate Investors, the property arm of Prudential Financial, said that it has halted redemptions from its TMW Immobilien Weltfonds vehicle following unusually heavy redemptions. 'The management of the fund has decided on the basis of no longer sufficient liquidity, and in order to protect the investors, to close the fund for outflows', the company said in a statement.
Pramerica Real Estate Investors, the property arm of Prudential Financial, said that it has halted redemptions from its TMW Immobilien Weltfonds vehicle following unusually heavy redemptions. 'The management of the fund has decided on the basis of no longer sufficient liquidity, and in order to protect the investors, to close the fund for outflows', the company said in a statement.
The closing, which will be for an initial period of three months, comes shortly after Pramerica decided to re-open the fund at end 2009 and was prompted by a crisis of confidence among investors after another German open-ended fund unveiled massive writedowns on its portfolio. On Monday, Degi Global Business announced a 21.6% fall in the value of its property portfolio.
'We feel like we are held responsible for other company's actions, as our portfolio shows no risk concentration and is invested in core real estate worldwide, and not in Eastern Europe. It is therefore completely unclear to me, how such a regularly re-valued portfolio can implode in such a way,', said Klaus Trescher, the chairman of the supervisory board of TMW Pramerica Property Investment.
The management of TMW Immobilien Weltfonds said that it is working to ensure that the reopening of the fund will take place as soon as possible.
The fund sold roughly EUR 146 mln worth of property in efforts to increase liquidity which dropped to a historic low of just 8.5% in 2008. TMW Immobilien Weltfonds announced on Monday that it sold an office building located in Pfäffikon near Zurich for around CHF 59 mln (EUR 40 mln). The buyer is French investor AXA Investment Management.