The report says that DekaBank, which is owned by savings banks and regional state banks and is Germany's second largest fund manager, saw the withdrawal of euro 2.7 billion ($3.41 billion) from the real estate funds in 2004. The withdrawals, prompted it to pump in euro 1.7 billion ($2.14 billion) of its own money to offset the losses as its net profit fell by 35%.

DekaBank acting chief executive Fritz Oelrich, who took over after Axel Weber's surprise exit in March, has pledged unlimited support for its property funds. In a statement issued yesterday, bank officials said Holger Sepp, deputy chief of fund-management arm Deka Investment, had resigned "as part of the changed management line-up"

The German real estate fund sector as a whole has suffered from a depressed domestic property market, a corruption scandal and a drop in investor confidence. Frankfurt state prosecutors are investigating about 80 people amid allegations of large-scale bribery in local property and building industries, including a number of former DekaBank employees.

The investigation has hit public confidence in open-ended funds in general and investors are voting with their purses. BVI numbers show that money was drained from DekaBank's rivals in April. For instance, DIFA saw withdrawals of euro 110 million ($139 million) and DB Real Estate Investment euro 98 million ($123.8 million).

The new outflow, though, from the German open-ended fund sector has slowed from euro 769 million ($972 million) in March, when Deka's domestically focused open fund lost euro 482 million ($609 million) and its international property fund euro 103 million ($130 million).