Fund Management ReportKanAm grundinvest Fonds has ended the fiscal year as the winner of a number of perfor-
Dear Investor: KanAm grundinvest Fonds reinforced its leading position among open-Âended real estate funds in Germany with an investment performance of 5.0%* p.a. as of June 30, 2009 and a performance of 58.1%* since its launch. Thanks to its five-Âyear cumulative performance as of December 31, 2008 of 34.4%*, KanAm grundinvest Fonds again won the Fund Award 2009, which is presented every year by the experts at the “€uro” and “€uro am Sonntag” magazines. The 5/2009 and 9/2009 issues of “Finanztest” magazine also named KanAm grundinvest Fonds the best open-Âended real estate fund in the magazine’s long-term test in terms of its quality over five years. The assessment criteria used were performance and stability, and 22 and 23 open-ended real estate funds respectively were tested. The end of the fund’s eventful eighth fiscal year on June 30, 2009 was dominated by positive news. The suspension of unit redemption, which was resolved at the end of October 2008 in the course of the general financial crisis, was resumed ahead of schedule only a few days after the end of what was a successful fiscal year despite the global turbulence. The 98.6% leased rate corresponds effectively to full leasing and regular stable income. These in turn enable a distribution of EUR 2.50 per unit on October 1, 2009. KanAm grundinvest Fonds’ distribution for fiscal year 2008/2009 as of June 30, 2009 totals some EUR 212 million, an increase of EUR 22.8 million or approximately 12% compared with the distribution as of June 30, 2008 for fiscal year 2007/2008. Once again, the distribution at the end of the eighth fiscal year is 100%** tax free for units held as private assets, despite the application of the German flat tax. In July 2008, KanAm grundinvest Fonds recorded cash inflows of approximately half a billion euros. Things changed abruptly with the temporary suspension of unit redemption on October 28, 2008. Before this, the German federal government’s one-sided guarantee for bank deposits had triggered an unprecedented mass movement by investors into overnight money and fixed-term deposits. By contrast, investment funds recorded unparalleled cash outflows of some EUR 51 billion overall in just a few weeks in October 2008. As part of this, units in KanAm grundinvest Fonds worth EUR 222.8 million were sold, whereupon the fund’s management resolved to suspend the redemption of units with effect from October 28, 2008 in order to ensure the orderly management of the fund and to protect investors. The fund has succeeded in accumulating new liquidity at the end of the period under review. This has come from cash inflows of approximately EUR 130 million, loans that can be drawn down at short notice, and monies released by our withdrawal from a real estate project in Moscow. In order to procure liquidity, we decided against transferring the Citydel Business Center in central Moscow, which had been completed in the meantime, to the portfolio. Furthermore, two-thirds of the investors using the KanAmGrund securities account who submitted sell orders cancelled these prior to the resumption of unit redemption. This demonstrates the return to conservative values in a changed environment and the trust that KanAm grundinvest Fonds has earned as an investment opportunity that retains its value, is secured by real assets, and is inflation proof. The resumption of unit redemption took place on July 8, 2009 – after the end of the fiscal year – without recourse to the real estate in the portfolio. On the contrary: Five completed projects and an acquisition – spread across Paris, Luxembourg, Montreal, and Calgary – are listed in the “Acquisitions” section. The entire real estate portfolio was reÂvalued at the beginning of 2009 as a reÂsult of a specially commissioned reÂappraisal by the independent Expert Committee. The correction made in JanÂuary 2009 to adjust the unit price to the market situation was extremely moderÂate, at EUR Â-0.08 per unit. KanAm grundinvest Fonds’ position on reopening demonstrates its high deÂgree of resistance to financial and stock market crises. This was also confirmed by the rating awarded to the fund by Feri EuroRating Services AG, which for the fourth time in a row gave KanAm grundinvest Fonds a “very good” (A) overall rating. We would like to thank you, our valued investors, for not letting the media or market sentiment negatively affect your decision in favor of KanAm grundinvest Fonds and hope that you find our report an interesting read.
* Calculated according to the BVI method. Basis for calculation: unit value (excluding front-end charge);
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