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Fund outflows get a grip


FRANKFURT. The preliminary talks with the banking industry on the technical feasibility have been completed successfully, says Reinhard Kutscher, chairman of the Real Estate Committee in the fund industry association BVI and CEO of Union Investment Real Estate (uire). Only so far not been possible identification of institutional investors – in the German Lawyers’ non-natural persons "referred to – makes it possible to enforce the one-year notice period for Institutional shares in mutual funds. Custodians administer the fund shares to investors.

Private investors will not be affected and may redeem their shares will continue trading day. The Investment Act will be amended this year, as it already European regulations should be aligned. Whether the proposals be implemented, but is still open.

In October 2008 had been primarily institutional investors to flee from twelve o’clock open real estate funds in Liquiditätsnöte so large that it suspend its share to all shareholders had to withdraw. At times, more than 30 billion euro investment funds were blocked. Still stuck firmly over eight billion euros in five funds.

After the end of 2005, the first real estate fund had been closed, had the industry itself obliged to continue to accept any fresh institutional money into mutual funds. But offenses against reiterated in the crisis. Providers, large sums of money under management by institutional investors, has always tried to be excused by pointing out that they could not control the source of funds. Custodians would give no information about it, it was argued.

Managers of large private fortunes are not affected

The proposed new regulation does not prevent them deduct money manager at pooled funds of retail investors at a stroke. "A manageable problem," but says Kutscher.

As an additional means of securing liquidity of the contract of all mutual funds have the possibility of a three-month notice period provided for in the event that returned within 30 days, more than five percent of the shares are. This clause applies to all investors. Their application is at the discretion of fund management. The background to this scheme: A company whose plan assets to 30 percent of cash is to be at less risk of having to close, as one who has half as large a proportion.