Friday, August 3, 2007

German Fund Halts Redemptions

From Bloomberg:

Union Investment Asset Management Holding AG, Germany's third-largest mutual fund manager, halted redemptions from a fund holding subprime mortgages after clients withdrew 100 million euros ($137 million) in the past month.

The Frankfurt-based company also closed the 950 million-euro ABS-Invest Fund to new investments, spokesman Markus Temme said today. The fund, sold to institutional investors across Europe, has about 6 percent of its assets in securities related to subprime mortgage loans, Temme said.

The fund has taken the steps ``because of illiquidity in the market,'' Temme said in a telephone interview today. Union Investment, which is owned by Germany's cooperative banks, hasn't priced the fund since July 24.

The bad news about hedge funds just keeps coming.