GERMANY - TMW Immobilien Weltfonds is the latest German open-ended real estate fund (GOEF) to be liquidated, as TMW Pramerica Property Investment looks to focus on closed-end spezialfonds going forward.
The global real estate fund will be dissolved and phased out by May 2014, making it the latest fund to be closed permanently after Degi Europe, KanAM US-Grundinvest and Morgan Stanley P2 Value announced similar fates.
It is further evidence that the GOEF industry is undergoing a structural shift and will return to its traditional business model of focusing on German private investors rather than institutional capital.
TMW Pramerica Property Investment said the decision to the liquidate fund was based on their being insufficient liquidity to pay redemption requests.
The fund manager said it assumed the fund's net assets of approximately €730m could be sold on reasonable terms.
German rating agency Scope recently produced a report on the sector highlighting TMW Immobilien Welftfonds, AXA Realty Select, Degi International and SEB Immo Invest as those with the most potential to experience difficulties in coming months.
TMW Pramerica Property Investment said in the future it would focus on closed-end spezialfonds, which are designed for institutional investors. The German fund manager, which is a subsidiary of Pramerica Real Estate Investors, already manages three spezialfonds.
The announcement supports speculation that the spezialfonds sector will benefit from GOEFs appearing less attractive to institutional investors, especially after the German government passed legislation that seeks to protect the interests of private investors.
