A second German asset manager was forced on Tuesday to temporarily freeze the assets in its fund after the fund’s value declined sharply on the back of credit market weakness. WestLB Mellon Asset Management, a US-German bank joint venture, suspended issuance and redemption of shares in its €235m ABS fund from August 6 until further notice. On Monday, Frankfurt Trust shut a €160m ($220m) ABS fund to stop further withdrawals. The moves follow the bail-out of specialist lender IKB. Unlike IKB’s investments, WestLB Mellon’s fund was not exposed directly to US subprime mortgages but invested in structured credit instruments.
