Deka Immobilien Investment, Germany’s leading provider of real estate funds, saw its three flagship vehicles hit by almost e1.5bn in investor outflows during the first nine months of 2005.
The three funds, targeted mainly at retail investors, include a e4.9bn German fund, an e8.8bn European fund and a e2bn global fund.
In 2004, Deka Immobilien’s German fund suffered e1.7bn in outflows due to a significant devaluation of the fund’s property assets and scandals that engulfed the provider’s management. The management has now been replaced, with Reinhardt Gennies as the new chief executive of Deka Immobilien.
However, investor fears about the health of Deka Immobilien’s other two funds were apparent in the first nine months of 2005. According to the provider, its European fund accounted for 66% of the e1.47bn in overall outflows between January and September.
The outflows at Deka Immobilien’s German fund also continued during the nine-month period, although these were limited to e475m. Still, the provider said that it needed to inject e60m into the fund so that it could achieve a target return of 2% for its investors.
To further restructure the embattled fund, Deka Immobilien said it would shed its foreign holdings - which currently represent 21% of the fund - and cut its exposure to logistical problems.
Finally, Deka Immobilien said that to boost the integrity of the three funds, each one would get its own management team.
For institutional investors, Deka Immobilien said it would soon launch a fund that invests 70% of its assets in Europe and the rest in the US and Asia. The new fund aims to soak up e750m in institutional capital by the end of 2008.
Deka Immobilien’s other institutional funds have almost e1bn in assets.