KanAm has suspended redemptions from its US-grundinvest open-ended fund for at least three months. The German fund manager said the move was necessary to protect investors in the dollar-denominated fund after a period of unusually high sales of its units in recent weeks.
KanAm has suspended redemptions from its US-grundinvest open-ended fund for at least three months. The German fund manager said the move was necessary to protect investors in the dollar-denominated fund after a period of unusually high sales of its units in recent weeks.
KanAm launched US-grundinvest in May 2003 to enable Germans to invest for the first time in US property through an open-ended real estate fund denominated in a foreign currency. The fund delivered an investment performance of 6.3% per annum at end-March 2008.
The fund has a volume of $610 mln (EUR 490 mln).
KanAm said in its statement on Monday that the ongoing crisis in the financial markets had brought the US and Europe to the edge of recession. The value of the dollar has risen sharply in recent weeks relative to the euro and this had sparked 'profit taking' by investors seeking to exit US-grundinvest.
This is the second time in recent weeks that KanAm has been forced to take action in the face of the global financial turmoil. On 17 October KanAm pulled out of the acquisition of the OpernTurm trophy office tower development in Frankfurt. The property in Germany's banking and financial centre was intended for the EUR 5 bn KanAm grundinvest fund.
A KanAm spokesperson told PropertyEU that the fund manager had decided not to increase the proportion of financial properties and tenants in the portfolio given the ongoing turmoil in the global banking sector. She noted that OpernTurm is 50% pre-let and the rest would have to be let in the next year. 'Given the current market conditions it was decided to be on the safe side rather than the risky side.'