SEB halts redemptions from ImmoInvest fund

SEB Asset Management has become the second major fund manager in Germany to halt redemptions from its flagship open-ended real estate fund. The firm said it was necessary to suspend the redemption of units from SEB ImmoInvest for three months 'in the interests of treating all investors equally and of protecting investors' assets'.

Earlier this week KanAm suspended redemptions from both its EUR 5 bn grundinvest and smaller, dollar-denominated US grundinvest funds to stem the outflow of investor money.

SEB ImmoInvest was launched in May 1989 to invest in commercial real estate in European cities and international metropolitan areas. The fund, which was awarded first place in the real estate category of the Morningstar Fund Award 2008, has just over EUR 6 bn of property under management.

The fund made a dividend payment of EUR 2.50 at the beginning of July, bringing its year-to-date performance to 4.15%. This compares to a performance of 5.05% in 2007, 15.80% over three years and 26.06% over five years.

SEB Asset Management stressed that its move in relation to SEB ImmoInvest was not taking place in isolation. 'Following the suspension of unit redemption by other real estate funds, redemption requests from funds of funds and asset managers in particular have increased dramatically. The redemption of units would place a disproportionate strain on fund assets at the expense of other investors, especially private investors.'

'It would necessitate the utilisation of liquidity reserves that, due to the current turbulence on the financial and capital markets, could not be realised at all or only subject to massive discounts. The other cash funds are not sufficient to satisfy investors' redemption requests in full.'