Degi has become the latest German open-ended fund manager to stop investors withdrawing their money as panic spreads across the sector.

The number of funds to have suspended redemptions has grown to 10 this afternoon as Degi, part of Aberdeen Property Investors, adds its two vehicles to an ever growing list.

Degi has suspended the redemption of shares for its Degi Europa and Degi International funds. This follows redemption halts by KanAm on two of its funds, UBS on two of its funds and Morgan Stanley, SEB, AXA, TMW Pramerica.

The mass block began on Monday as KanAm placed a three-month freeze on its US- denominated Grundinvest fund, which invests in property in north America. The fund manager followed this by putting a stop to redemptions on its Euro-denominated Grundinvest fund, which targets trophy office buildings across Europe.

All redemption freezes are expected to last three months. During this time investors will continue to be able to invest into the funds.

Degi said in a statement: ‘The liquidity crisis on financial markets worldwide has caused a sense of uncertainty among investors regarding their investments. Some investment vehicles were no longer traded; others suffered massive losses in value.

'Against this background, many investors started to meet their liquidity needs by redeeming their shares in, then-as-now profitable and stable investment vehicles, which include open-ended property funds.’

‘For this reason, open-ended property funds have been experiencing above-average unit redemptions, and in consequence a shrinking of their liquidity.

The situation got worse by suspensions of share redemptions by a large number of open-ended property funds during this week.’