A second German asset manager was forced on Tuesday to temporarily freeze the assets in its fund after investors saw the value of the fund decline 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 sub-fund WestLB Mellon Compass Fund: ABS Fund. The asset freeze, it said, would be effective from August 6 until further notice.