Head of Communications
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Tel: +49 (0)69 27299-1503
SEB Asset Management has resolved to allow unit holders of SEB ImmoInvest to decide about the future of the fund.
The Company will open the fund on 7 May 2012 for one trading day. If all unit redemption requests can be served, the fund’s terms and conditions will be amended in alignment with the new investment law.
In order to treat all investors equally, SEB Asset Management will take the precaution of reducing the unit value prior to opening the fund by around 5% as a consequence of a real estate value adjustment.
All sell orders issued from the date hereof until 7 May 2012 will be taken into account en bloc. Gross liquidity of the fund on the date of re-opening will exceed 30%.
The redemption of units has been suspended for nearly two years. SEB Asset Management deeply regrets the inconvenience this has caused for investors. Therefore, the management was determined and focused in its efforts to prepare for the important days that now lie ahead of the investors. Efforts revolved around creating the necessary freedom of action, which would allow investors of SEB ImmoInvest to decide about the future of the fund. A viable framework and transparent basis for this decision has now been established.
SEB Asset Management has, in consultation and with the approval of the Federal Financial Supervisory Authority (BaFin), resolved to re-open SEB ImmoInvest on Monday, 7 May 2012. The fund will open for one day only. If all unit redemptions can be served, the fund’s terms and conditions will be amended in alignment with the Anlegerschutz- und Funktionsverbesserungsgesetz (AnsFuG – the Act to Increase Investor Protection and Improve the Functioning of the Capital Market) at the end of the trading day. Given the inability to calculate liquidity requirements in a turbulent market environment, the amendment provides for the new legal framework and changes the intervals at which units can be redeemed. While investors were able to dispose of their units daily, this will – until further notice – only be possible on an annual basis.
Barbara A. Knoflach: “We would like to ask our investors not to treat this measure as something we are imposing on them or as a restriction of their ability to dispose of their units, but rather as an opportunity that points the way to the future of this asset class and underlines the long-term nature of investments in real estate.”
Amending the fund’s terms and conditions in alignment with the AnsFuG gives the company precisely the scope of action currently needed in order to successfully continue the management of the fund in the interests of its unit holders.
Top priority of the strategy to re-open the fund, is to treat all investors equally. Therefore, all sell orders will be collected from this day until 7 May 2012. That day either all or none of the orders will be processed. SEB Asset Management has adopted the policy of equal treatment with respect to the fund’s future by setting aside reserves for deferred taxes and providing for value adjustments. The latter reflects the experiences gained in the course of recent sale negotiations.
In the course of the 17 successful property sales, totalling approximately EUR 1 billion, the company has succeeded to establish a cash pool exceeding 30% of its assets. The quality of the portfolio has not changed – a very important point with respect to the decision that unit holders now have to make. For SEB Asset Management it is particularly important to draw attention to the Potsdamer Platz property, which has repeatedly been the subject of public discussion and criticism. In contrast to the prevalent opinion, Potsdamer Platz is not a single property with the associated cluster risk, but rather consists of 19 separate buildings with different types of use that can be marketed separately. This point is all the more important since recent discussions about SEB ImmoInvest have unfortunately been reduced to this issue. For further details, please see SEB Asset Management’s website.
The fund management of SEB ImmoInvest is fully aware of the importance and implications of the decision investors are facing. SEB Asset Management likes to make clear that the fund management has chosen the only possible approach that can be taken in view of the extraordinary market circumstances. During the past months it has established the prerequisites for putting investors in a position to be able to choose between alternative courses of action.
Barbara A. Knoflach: “We are asking our investors to consider the alternatives and, by staying invested, to commit to a future of the fund that could very well live up to its successful 23-year track record. The only chance to avoid the liquidation of the fund with all its consequences is not to take advantage of the exit offer.”