GERMANY - SEB Asset Management (SEB AM) is to re-open its frozen German open-ended real estate fund (GOEF) SEB ImmoInvest after two years, allowing investors the possibility of redeeming their unit holdings.
The asset manager said the fund would re-open for one day of trading on 7 May.
"That day either all or none of the orders will be processed," it said, noting redemptions would only be granted if sufficient assets were available to fulfil all requests.
SEB said it "deeply regrets" the inconvenience caused by the fund's nearly two-year long closure, but that it was "determined and focused" in preparing for the future.
Barbara Knoflach, chair of the board of management at SEB AM, said: "We would like to ask our investors not to treat this measure as something we are imposing on them or as a restriction of their ability to dispose of their units, but rather as an opportunity that points the way to the future of this asset class and underlines the long-term nature of investments in real estate."
The manager has successfully sold 17 of the properties held by the fund, allowing it to amass cash reserves of €1bn - around 30% of assets.
It stressed that while the quality of the assets had not changed, all units would see a 5% adjustment in value to compensate for changes in real estate prices since the fund SEB ImmoInvest was frozen.
The company added that if all unit redemptions could be served after 7 May, then the fund's terms and conditions would be changed in line with new financial legislation, AnsFuG, which sought to establish a greater level of investor protection, as agreed with Germany's financial regulator BaFin.
Knoflach appealed to investors to continue investing with the fund.
"We are asking our investors to consider the alternatives and, by staying invested, to commit to a future of the fund that could very well live up to its successful 23-year track record," she said.
She added that the only chance to avoid the liquidation of the fund, "with all its consequences", was not to take advantage of the exit offer.
The past few years has seen a number of GOEFs liquidated, with many in the industry expecting Spezialfonds to take the place as investment vehicle of choice following changes to German investment law that essentially stopped institutionals from investing in the open-ended funds.
Aberdeen Asset Management was forced to liquidate the €1.5bn Degi Germany GOEF late last year.