The Supervisory Board of Deka Immobilien Investment GmbH has appointed Rainer Mach, Managing Director of the Administrative Board of DekaBank Luxembourg S.A., and Fritz Oelrich, member of the DekaBank Board of Management und Chairman of the Supervisory Board of Deka Immobilien, as new managing directors.
Following the advice of the Supervisory Board, the previous managing directors Prof. Dr. Willi Alda, Andreas Schreurs and Jochen Ackermann resigned on October 18th 2004 with immediate effect. The motive for this action was the fact that since April 8th 2004 management had concrete knowledge of differences amounting to 512 million euros between expert valuations and the current market values of properties belonging to the Deka-ImmobilienFonds, a real estate investment fund open to the public and primarily active in the German real estate market. Management had neither reacted nor taken steps to inform the Supervisory Board, as it was duty bound to do, with the result that there was no longer any basis for collaboration founded on trust.
DekaBank had already declared its readiness to take into its own holdings all those share certificates issued by the Deka-ImmobilienFonds that had been returned by investors. This measure was necessary because in the first nine months of the current year the fund had experienced a return flow in the value of 1.5 billion euros and German law imposes a minimum reserve requirement of five per cent in the case of open-ended real estate funds. There is now a durable guarantee that this minimum liquidity requirement will be satisfied. Deka Immobilien´s other funds that are open to the public, Deka-ImmobilienEuropa and Deka-ImmobilienGlobal, as well as the real estate funds for institutional investors remain unaffected by what has happened.
The new management´s principal task will be to draw up a comprehensive package of measures to be implemented on various levels. One of the prime objectives is to review and optimize Deka Immobilien´s entire investment process. Additional measures will be taken to enhance the transparency of the funds offered by Deka Immobilien. Investors and sales partners should be supplied with the latest comprehensive information available. Moreover, work will begin on sharpening the target group profile for open-ended real estate funds as a product. In this respect the funds should be positioned for both private and institutional customers more emphatically as a form of medium- to longterm investment. An effort must be made to avoid the flow of shortterm, even partly speculative funds into open-ended real estate funds, as happened in the wake of the bubble bursting on the equity market.
With the appointment of the new managing directors the Supervisory Board has laid the foundations for a critical reappraisal of recent events and the consequences to be drawn therefrom. Rainer Mach is one of the foremost managers in the DekaBank Group and, by virtue of his comprehensive knowledge of all aspects of both banking and asset management, he has the qualities and experience required to reposition Deka Immobilien both internally and externally. Fritz Oelrich will also function as managing director for a short transitional period until such time as a second member of the Board of Management has been found. His mandate as chairman of the Deka Immobilien Supervisory Board will be suspended for the duration of this period.
Source: Deka Immobilien