DEGI EUROPA Extends Suspension of Redemptions

DEGI fund intends to raise liquidity through property sales

DEGI will extend the suspension of share redemptions for its DEGI EUROPA fund. The measure, which is legally based on the German Investment Act in combination with the fund’s general contract terms, is intended to protect the interests of current investors so as to safeguard the fund’s ongoing business operations.

Since fund share redemptions were suspended on 30 October 2008, the management has been able to raise the liquidity in its effort to end the suspension of share redemptions. Nonetheless the liquid capital remains insufficient to ensure a successful reopening of the fund.

In the wake of the financial crisis in September 2008, global property markets became caught up in the recession. Now, some of the important real estate markets, such as those in London and Paris, are on their way to recovery. Property demand in these hubs has already picked up and the transaction turnover for small and medium-sized properties is gradually growing again. Prices for properties in good locations are also back on the rise in some places. All things considered, the property markets are going through a recovery cycle.

In light of the improved market environment, the fund management team expects to be able to sell an increased number of portfolio properties belonging to DEGI EUROPA in better conditions than those of the past twelve months, and use the proceeds to boost fund liquidity.

Fund assets remain protected by applicable legal provisions while the current rental income provides for a stable income basis as expected. The high occupancy rate of about 93% and the wide range of portfolio properties across a number of countries illustrate the high quality of the real estate assets. The fund’s one-year performance to 31 August was 3.4%(calculated using the BVI method). Since its inception in 1972, the fund always realised a positive performance.

Under the German Investment Act, the suspension of share redemptions may be extended by another 12 months. The fund management team is working very hard on the objective to end the suspension of share redemptions before the end of this period. Accordingly, a premature reopening of the fund is possible any time once the preconditions have been met.

Then as now, share prices will be determined and published every trading day.

The fund management company will inform investors and sales partner via all known channels of communication. Specific reference is made to the information updates on the proprietary Internet pages at www.degi.com

source : DEGI