UBS has suspended two of its German open ended funds for six months, becoming the sixth fund manager in a week to freeze investor redemptions.
UBS Real Estate - a subsidiary of UBS - suspended the redemption of units in its Kontinente Immobilien and Euroinvest Immobilien real estate funds last night, saying it was ‘reacting to market developments’ of the last few days.
The move follows yesterday’s suspension of Morgan Stanley’s P2 Value Fund after it experienced significant redemptions.
SEB, AXA and TMW Pramerica have all suspended unit redemptions in recent days.
UBS said, ‘Due to the turbulence in the global financial markets, the open-end real estate fund industry in Germany has been experiencing high outflows which have subsequently led to the suspension of redemptions by a number of open-end funds in Germany.
‘This has also led to outflows in both UBS 3 Kontinente Immobilien and UBS Euroinvest Immobilien, which are primarily geared towards institutional investors, as fund of fund managers and independent investment advisors seek to bolster liquidity on behalf of their clients.’
UBS added, ‘The temporary suspension of redemptions for both funds has been implemented solely because of the current increase in redemptions and not because of any fundamental issues relating to the funds.'
Kontinente currently has a portfolio of 25 properties with a total value of around €600m (£472m) and the Euroinvest fund is invested in 61 properties worth €3.2bn (£2.5bn). The funds have a 12-month performance of 6.7% and 6.4%, respectively.