Real Estate & Hard Asset Deskbook
2 0 0 8
2007© Probitas Partners
Introduction
Probitas Partners is a leading independent knowledge, innovation and solutions provider to private markets clients. It has three integrated global practices that include placement of alternative investment products, liquidity management, and portfolio management. These services are offered by a team of employee owners dedicated to leveraging the firm’s vast knowledge and technical resources to provide the best results for its clients.
probity ¯˘ ¯ n. [from Latin probitas: good, proper, honest.] adherence to the highest principles, ideals and character.
On an ongoing basis, Probitas Partners offers • Information is collected from various data research and investment tools in the real estate, sources, but dynamic and accurate tracking hard asset, and private equity investment markets of when funds in the private sector are as aids to its institutional investor and general launched and when they are finally closed partner clients. Probitas Partners conducts is a difficult business. We are constantly independent research and compiles data from iterating with investors and other industry various trade and other sources and then vets sources, and any corrections or updates and enhances that data via its team’s broad are greatly appreciated in our effort to help knowledge of the market. Accurate data is elusive keep this listing as up to date as possible; in private markets. Probitas Partners shares this • Probitas Partners relies upon its knowledge data and its findings in an effort to improve of the investment pace of previous funds, professionalism, consistently raise the bar on informal discussions with institutional professional services, and assist all participants investors and other industry players, in their investment, portfolio management and and knowledge of emerging managers. fundraising endeavors. Specifically, we do not seek confirmation Included within this 2008 Real Estate & Hard of these estimates with general partners Asset Deskbook is our listing of real estate and in order to avoid SEC public offering hard asset funds in the market or likely coming prohibitions. to market in the next 12 months. A few important For the same reason, Probitas Partners does not user notes on the listing: include information on funds it currently offers in • The list does not track funds smaller than this listing; qualified investors seeking information $100 million, or approximately €68 million, on Probitas Partners’ placed funds should contact as these are not targeted by the majority of Probitas Partners directly in order to have the most institutional investors; complete picture of all institutional funds currently in the market. Key Trends in 2008
• Continued Capital Attraction to • Dramatic Infrastructure Opportunistic Real Estate Funds Investment Growth
• Emerging Markets Focus • Increasing Cap Rates
• Exchange Rate Considerations • Constrained Debt Markets
• Refocus on Operating Strategies • Distressed Investments
• Expanding Global Markets Investing
The global breadth of the private equity real estate market is positioned to continue its expansion into 2008, albeit with a more cautious and focused approach to fund selection by institutional investors. 2007 was another strong year, and may yet exceed 2006’s record year for capital raised, even with the midyear capital markets disarray sparked by the U.S. subprime crisis. Overview
The number of real estate funds raising capital We see an increase in real estate portfolio increased substantially from 2006 to over 300 allocations by a majority of institutional investors, funds currently in the market as of December combined with a broadening of the opportunistic 2007, as capital is being committed across a broad asset base to include alternative hard assets such range of global markets. As shown in Chart 1a as infrastructure in addition to distressed products. below, nearly half of funds closed through These trends will provide the impetus for continued mid-December in 2007 were focused on North growth in the private equity real estate and hard American investments. But, as interest in investing asset sectors. Additionally, as the “global economy” in markets outside North America has rapidly continues to expand, we believe that investors will expanded, the number of Asian and European- refocus their investment strategies to include a focused funds ultimately represented a substantial more diversified global portfolio of funds. market share, as did funds having a broader and more diverse Global emphasis.
Chart 1a Number of Closed Real Estate Funds by Geographic Focus Year-to-Date 2007 (December) Chart 1b Capital Allocation of Closed Real Estate Funds by Geographic Focus Year-to-Date 2007 (December) Asia 18% Global 9% Europe 24% North America 49%
North America Europe 21% 40%
Asia 15% Global 24%
Source: Private Equity Intelligence, Probitas Partners
In fact, despite North America attracting Investor interest continues to be strong across a the greatest number of funds, overall capital diverse array of global investment opportunities as allocations, as shown in Chart Ib, reflect the we move into the new year (see the attached list of expanding global focus of institutional investors Funds in the Market 2008). We expect 2008 to be resulting in the increasing sizes of funds focused another strong year in the private equity real estate upon Asian, European and Global markets. and hard asset capital raise arenas.
1 Opportunistic Real Estate Market
2007 was a year of change for the opportunistic resulted in yet another record-breaking year for real estate market. As of July 2007, all indications real estate fundraising. were that the fundraising market was well on track to outpace last year’s record–setting numbers. Despite a recent downturn in capital raising, the However, in light of increasing market uncertainty overall fundraising market was robust through and changes in the capital markets arising most of 2007. As reflected in Table I, the largest from the widely publicized derailing of the U.S. real estate funds ever raised were closed in the past subprime market in the second half of 2007, the two years, signaling a consolidation of investment brakes were moderately applied as investors took power within a few large, dominant global funds. a more conservative “wait-and-see” approach. This trend mirrors the same trend we observed in the private equity buyout world, where some of the As illustrated in Chart II, the amount of private same fund sponsors established themselves as the real estate capital raised through mid–December largest global LBO investors.
Chart II Global Real Estate Fundraising
$90 $80 76.5 69.5 $70 60.4 $60 $50 $40 Billions of Dollars $30 24.3
$20 11.7 $10 $0 2003 2004 2005 2006 YTD Dec 2007
Year
Note: Totals translated into U.S. Dollars; underlying fund currencies include U.S. Dollars, Euros, Sterling, Yen, Australian Dollars, Rupees and Swiss Francs
Source: Probitas Partners
2007 remains nearly on pace with 2006. While Nearly all of these large funds have U.S.-based fundraising currently looks as though it might fall general partners yet have international investment short of the $76.5 billion level achieved last year, mandates, or more broadly, global mandates. the prospect of expedited year-end closings by The international/global-market focus for U.S.- funds designed to take advantage of the current based investors has been a pronounced evolving dislocation in the capital markets could very well strategic investment shift over the past two years,
2 Table I Ten Largest Private Equity Real Estate Funds as of December 2007
Fund Firm Vintage Status Fund Size ($MM) Geograhic Focus Blackstone Real Estate Partners VI Blackstone Real 2007 Raising 10,000 Global Estate Group
Morgan Stanley Real Estate Fund VI Intl Morgan Stanley 2006 Closed 8,000 Europe/ Real Estate Asia
Blackstone Real Estate Partners V Blackstone Real 2006 Closed 5,250 Global Estate Group
Morgan Stanley Real Estate Fund V Intl Morgan Stanley 2006 Closed 4,200 Europe/ Real Estate Asia
Whitehall Street Global Real Estate 2007 Goldman Sachs / 2007 Closed 4,007 Global Archon Group
Beacon Capital Strategic Partners V Beacon Capital 2007 Closed 4,000 North America / Partners Europe
Colony Investors VIII Colony Capital 2006 Closed 4,000 Global
Macquarie Global Property Fund Macquarie Global TBD Raising 3,500 Global Property Advisors
Whitehall Street Global Real Estate 2005 Goldman Sachs / 2005 Closed 3,200 Global Archon Group
Fortress Investment Fund IV Fortress Investment 2006 Closed 3,045 North America / Group - Real Estate Europe
Notes: 1) All of these funds are either global or invest across at least two major geographic areas 2) The commitment currency for all of these funds is U.S. Dollars 3) With the exception of Macquarie, all of these firms are U.S. headquartered
Source: Probitas Partners
and one we believe represents a fundamental These record-breaking “mega funds” reflect the paradigm shift in our expanding global economy. growth in the overall real estate fund community. Furthermore, we expect this scale change for The total capital targeted and the nominal number the largest funds to be matched with increasing of funds in the market has increased well beyond numbers of country or more narrowly focused 2006 levels, as shown in Chart III. Incumbent strategy funds offering institutional investors a fund sponsors with proven returns and strategies bar-belled option: broad global “large cap” real looking to establish even larger funds continue estate as well as tailored fund portfolios to gain to raise the preponderance of capital. First-time exposure to particular geographies or strategies funds and smaller funds hoping to capture a sliver that complement overall portfolios. of the overall capital commitments, primarily those
3 Chart III Rise of Real Estate Funds in Market
No. Funds in Market
250 223 Aggregate Target Capital ($B)
200
150 113
Billions of Dollars 100 76
50 29 32.5 16
0 January 2006 January 2007 January 2008
Source: Private Equity Real Estate: Real Estate Spotlight (October 2007) seeking exposure to new markets or opportunities Nearly half of all real estate–related capital raised arising in the current market disarray, are either in the third quarter of 2007 was still allocated to heavily scrutinized or largely disregarded by the opportunistic funds, despite increasing signs of active institutional investor pool. The number market uncertainty, as noted in Chart IV. Funds of experienced fund sponsors in the market classified as “opportunistic” are focused upon a remains high with significant competition in broad range of asset classes and investment sectors most strategies. Most larger investors who have such as ground–up development, rehabilitation, been active for the past five years or more are and emerging markets; nevertheless, the definition approaching maturity in their portfolios to the of “opportunistic” continues to evolve in light of point where they are spending most of their time the relative instability in the capital markets and focused on reups rather than new investments. In the number of new opportunities being created in fact, as discussed later, many mature investors are various sectors and strategies globally. now looking to secondary sales to rationalize and rebalance large, mature portfolios. Transactions that included more aggressive financing structures and record –low cap rates that According to an October 2007 Ernst & Young typified the past two years quickly came to a halt report, overall growth in the private equity real with news of the “credit crisis.” While debt capital estate market is expected to remain strong is now materially constrained or dramatically through 2008. We believe that the fund raising more expensive than in the past few years, equity deceleration in the latter half of 2007 is more capital available for opportunistic strategies in the likely a reassessment slowing or deferring capital U.S., particularly those with strong operational deployment–not an overall pull-back from the orientations to create value, remains abundant. market. Obviously, deals in this new environment will have
4 Chart IV Capital Raised in Q3 2007 by Fund Type
4% 3% 2%
42% Fund of Funds 49% Core Plus Mezzanine Value Added Opportunistic
Source: Private Equity Real Estate: Real Estate Spotlight (October 2007) to be repriced to achieve fund sponsors’ return new distressed-focused capital being raised at the expectations in light of the reduced or more end of 2007 or into 2008. expensive leverage available and moderating exit cap rate projections. In response to rising interest rates and diminishing property returns, the market efficiently began We continue to see an uptick in opportunistic its correction in the second half of 2007. After approaches that compensate for other market risks several years of significant cap rate compression by focusing on in-fill, coastal towns, metropolitan and questions of sustainability in an increasing areas offering round — the — clock service, global bond rate environment, cap rates started to rise. gateways, and technology — driven markets that Chart VI illustrates the cap rate trends over the promote development and sustainable growth. past ten years. Future opportunistic returns will certainly not be as reliant on leverage as compared to those in recent We anticipate similar cap rate stabilization/ years. We believe that a more back-to-basics, increases to continue in the upcoming year, operationally focused, fundamental approach to increasing at least fifty basis points or more across real estate will generate attractive returns in most all property sectors. Further, as loan defaults and markets and that the era of generating attractive, overall market instability are predicted to continue financially–engineered returns enjoyed the past well into 2008, a potentially protracted upward several years has come largely to an end. trend in cap rates is likely. The fact is, despite any correction already embedded, current cap rates While tagged as a “credit crisis” and a “liquidity are at or near all–time lows, and an increasing crisis,” the decreased availability of cheap, high- trend for the foreseeable future is likely in most leverage financing options is the inevitable result of mature and emerging markets and across all the market’s drastic narrowing, and even inversion, property types. of bond–yield and property–return spreads in recent years, as illustrated in Chart V. Consequentially, As cap rates continue to stabilize and decline across some of the more highly leveraged deals from the the market, many new and existing funds seek to past two years may well become opportunities for capitalize on the over–leveraged, under–capitalized
5 Chart V U.S. Property Return Rates vs. U.S. Bond Yields
U.S. National Average Property Returns
U.S. Ten Year Treasury Rate
7% 6.36 6.03 6% 5.63 5.28 5.02 4.79 4.85 4.74 5% 4.62 4.68 4.68 4.27 4.29 4.59 4.01 3.84 3.91 4% 3.62 3.56 3.31 3.44 2.93 2.73 3% 2.18 1.78 2% 1.65
1%
0% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Q1 Q2 Q3 2007 2007 2007 Year Source: NCREIF, United States Treasury market. In the past years, the compressed cap As witnessed in response to analogous changes rates and rising long-term bond yields inevitably in the private equity world in past years, funds led to negative spreads. And, in the current focused on acquiring distressed assets and loans stabilizing market, with limited lower leverage are on the increase in the real estate market today. refinancing options and over-valued assets, the The term “distressed” has a very broad definition in number of defaults is likely to increase across all the current real estate market. Table II summarizes commercial property sectors in 2008 providing a the dominant distressed approaches that we see new crop of opportunities for funds. in today’s real estate fundraising market. In many
Chart VI U.S. Property Cap Rates vs. U.S. Bond Yields
9.5% 9.12 8.92 Average Transaction Cap Rate 8.63 8.62 8.79 8.77 8.5% 8.25 U.S. Ten Year Treasury Rate 7.34 7.5% 6.62 6.5% 6.09 6.14 5.92 5.88
5.5%
4.5%
3.5% 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Q1 Q2 Q3 2007 2007 2007 Year
Source: NCREIF, United States Treasury
6 Table II Distressed Strategies in the Current Market
Assets Not Assets where the seller defaulted on a loan because of rising interest rates or where the Distressed seller/developer has insufficient capital to complete an otherwise viable project because of a lack of capital: “distress” is attributed to the financial status of the seller.
Assets Distressed Deteriorated or mostly vacant properties that trade at substantial discounts given the in- ability to obtain any substantial financing on such assets under current market conditions: “distress” is attributed to the condition of the asset.
Underlying Loans Debt collateralized by real property directly from lenders, particularly lenders who are Performing unable to sell or securitize the loans given the state of the capital markets: “distress” is attributed to lender’s inability to retain the loan on balance sheet despite it being a qual- ity or performing loan.
Underlying Loans in Debt collateralized by real property directly from lenders: “distress” is attributed to loan’s Default default or foreclosure status.
Mezzanine Debt Debt collateralized by real property issued directly by the fund or an affiliated entity: “distress” is attributed to relatively restrictive borrowing limits in the current market.
Source: Probitas Partners instances, the asset itself is not distressed; rather, the past several years, very few “distressed-only” the seller or borrower is constrained or impacted real estate funds were raised–most relatively by present capital market limitations. Some funds small in size. Taking into consideration the lack of are looking to take advantage of properties in poor transparency and diversification in the distressed condition, again because the current capital market arena, no new pure-play distressed funds of size lacks adequate leverage support or easy access to (>$250 million) appear to have been fully funded equity capital to rehabilitate such assets. in 2007. We do expect this to change, however, as clarity surrounding available opportunities Most funds lack specific distressed focus and increases and as some of distressed funds rumored instead invest using more than one of the above to be in formation carry out their anticipated fast strategies. In the majority of instances, one or and “easy” fundraisings. more of the strategies is a component, perhaps even a small component, of an otherwise broader For incumbent funds, it may be tempting to change opportunistic strategy. Therefore, the market horses and call their next fund a “distressed fund.” lacks clarity as to which funds are truly distressed We expect to find investors particularly sensitive as opposed to funds that are more or less to strategy shift by general partners who find the opportunistic funds looking to take advantage of current market tough going and willing to shift current market conditions and the opportunities approach to the flavor of the day. Further, the skill arising therefrom. As illustrated in Table III, in set required to compete successfully in distressed
7 Table III Real Estate Distressed Funds
Firm Fund Amount ($MM) Vintage Angelo, Gordon & Co.–Real Estate AG Realty Fund VI 514 2005
Arminius Advisors Arminius Real Estate Opportunity Fund € 252.5 2007
Blackacre Capital Management Blackacre Institutional Partners 890 2004
Fortress Investment Group–Real Estate Fortress Residential 1,500 2005 Investment Deutschland
ING Clarion ING Clarion Debt Opportunity Fund II 730 2007
Secured Capital Japan Co. Secured Capital Japan Real Estate Partners Asia 758 2006
Source: Probitas Partners
investing is distinct from most real estate Japanese real estate market, a number of focused investment strategies. So, it is “buyer beware” for distressed funds were raised. Many of these funds investors evaluating “new” distressed funds. have similarly matured and diversified (e.g., Lone Star and JER). In the early 1990s a number of opportunistic real estate funds were formed to capitalize on It is likely that we will see many of these larger, an abundance of obvious opportunities produced established funds looking to capitalize on distress by the RTC liquidation of assets. Many of those in the U.S. and global markets. At the same time, original opportunity funds today have grown to a new generation of distressed funds will be become the largest opportunistic funds in the established that ultimately will grow into larger, market (e.g., Blackstone and Apollo). Similarly, more diversified funds as they evolve to match the in the late 1990s, in response to distress in the recovering markets within which they invest.
8 The European Market
The European fundraising market— Western, Central Even with debt market constraints from indirect but and Eastern Europe— also remained strong in impactful exposure to the U.S. subprime markets, 2007. As shown in Chart VII, a record–breaking significant capital remains available in the market. amount of capital was already raised in 2007 A preponderance of middle-size funds dramatically for funds focused on the European market. Such up–scaling fund size over the past two years has capital represents over twenty percent of the global resulted in a relative glut of capital, all seeking private equity real estate fundraising for 2007. larger deals across the same universe. We believe This fundraising momentum is likely to perpetuate that this condition will result in stable or declining into 2008 as Europe continues to be an important returns for the primary Western European markets expanding market for institutional investors. over the next several years.
Chart VII European Real Estate Fundraising
16 14.9 14 12 10 8.2 7.0 8 6 3.3 Billions of Euro 4 2 1.4 0 2003 2004 2005 2006 YTD Dec 2007 Year
Notes: 1) Totals do not include funds solely targeting Eastern Europe (i.e., Russia, Ukraine, Georgia) but do include funds targeting Central Europe 2) Totals do not include global funds that invest a portion of their funds in Europe, only those funds targeting Europe 3) Totals translated into Euros; underlying fund currencies included U.S. Dollars, Sterling and Swiss Francs
Source: Probitas Partners
The European fund market exhibits many of the Many European and other global investors who same trends seen in the U.S. and throughout the previously shied away from U.S. investments world. Cap rates in Western European markets, because of U.S. tax implications (e.g., FIRPTA with bond rates adjusting upwards, continue at and ECI) are now considering opportunities in their historically low levels— persistently lower than U.S. markets, especially in light of the continually those in prominent U.S. markets. Given this long weakening U.S. dollar, demonstrated in Chart VIII. history of lower cap rates, the Western European U.S. tax friction is now moderated by superior market continues to deliver lower overall returns buying power and a currency hedge, especially in than other global markets. the face of less compelling returns projected for domestic market opportunities.
9 Chart VIII European Currency vs. U.S. Exchange Rates
2.3 2.1 1.9 1.7 Euro (€) 1.5 1.3 UK Pound (£) 1.1 0.9 2002 2003 2004 2005 2006 YTD 2007
Notes: December rates are through December 3, 2007
Source: Global Financial Data, Probitas Partners In Central Europe, dramatic capital inflows markets. We expect this trend to continue into (relative to the size of the market) have resulted 2008 and beyond. in inflated property values in cities like Budapest, Warsaw, and Prague, depressing anticipated Real estate fund–of–funds focused on the returns in these markets as well. In Central European marketplace raised substantially more and Eastern Europe, substantial capital inflows capital in 2007. This growth was evidenced by focused on strategies targeting assets related to a recently created tracking system. INREV, the necessities such as housing and retail have caused European Association for Investors in Non-listed dramatically inflated prices for such asset values. Real Estate, recently launched a fund-of-funds database. Initially, the database tracks thirty-six The opportunity for greater returns created by distinct unlisted European fund-of-fund vehicles an expanding European market, as shown in with targeted capital of €12 billion currently in the Chart IX, resulted in increased fundraising activity market. The funds tracked by INREV are designed for Western Europe that spilled over into the to invest in predominantly European–focused emerging markets of Central and Eastern Europe funds, an area which we expect to see increasing as investors chased yield in growth–oriented capital flows in 2008 and beyond.
Chart IX European–Focused Real Estate Funds in the Market by Target Investment Region
S. Europe 4%
C./E. Europe 12% Europe S. Europe Diversified 52% W. Europe 32% Europe Diversified C./E. Europe W. Europe
Note: 1) Central Europe includes Czech Republic, Hungary, Poland, Slovakia, Slovenia, Lithuania, Estonia, and Latvia 2) Eastern Europe includes Russia, Belarus, Moldova, Ukraine, Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Romania and Serbia 3) For this analysis, Western Europe includes Denmark, Finland, Norway, Switzerland, Iceland, Ireland, UK, Belgium, Netherlands, France, Monaco, Switzerland, Austria, Germany, Liechtenstein, Andorra, Italy, Portugal, Spain, Malta 4) Southern Europe includes Turkey, Albania, Greece, Macedonia
Source: Probitas Partners
10 The Asian Market
The Asian market has seen the most significant in support of industries driven by organic growth) increase in fundraising activity year-over-year. as opposed to past initiatives outsourcing cheap Approximately fifteen percent of the global private labor and buildout of higher-end residential and equity real estate capital raised year–to–date can commercial assets in coastal communities. be attributed to funds focused on Asian markets. As displayed in Chart X, this aggressive fundraising Several early investors are returning to China activity is already a nearly thirty percent increase to expand their investment in order to maintain from the amount raised in 2006 and is expected to appropriate overall portfolio exposure, grow even further with year-end closings. notwithstanding limited full realizations for most funds. These investors are being more selective now China saw heightened new interest in 2007. that the market has clarified somewhat in terms of The combination of continued strong economic stable teams, partial realizations, a settling out of expansion, progressive urbanization, the upcoming some of the over-building and massively inflated 2008 Olympic Games, and easing governmental coastal properties, and a sifting out of the non- regulations, is generating substantial investor operationally focused fund sponsors. interest. Despite this interest, developing legal and economic policies regarding foreign investments Foreign investors find it challenging to keep have made capital importation more difficult in apace of ever-changing capital import and export the past year. With a rapidly expanding middle policies. These dynamic features of the market class, China’s economic engine is characterized make ascertaining and quantifying the market by strong and growing domestic demand for risks complex. Fundraising remains strong with goods and services. Real estate investors are now strategies often branching out beyond Beijing and more focused on strategies to address this shift Shanghai to second and third-tier cities across (e.g., lower and middle-class housing and assets the region. For example, Goldman Sachs recently
Chart X Asian Real Estate Fundraising
12.0
10.0
8.0
6.0
4.0
Billions of Dollars 2.0
0.0 2003 2004 2005 2006 YTD Dec 2007
Notes: 1) Totals do not include global funds that invest a portion of their funds in Asia, only those funds targeting Asia 2) Totals translated into U.S. Dollars; underlying fund currencies included U.S. Dollars, Yen, Australian Dollars and Rupees
Source: Probitas Partners
11 announced that its $2.1 billion Developing Markets is leading investors to holistically re-evaluate risk. Real Estate fund will be two–thirds focused on Asia. We see a shift away from the insistence by many Goldman, along with other investment banks, has investors for an emerging market return premium historically invested most of its Asian allocation and a resetting of return expectations to fall in Japan. Like other larger funds, they too are more in line with those for most U.S. and Western expanding capital deployment to the entire region. European markets. China and India are attracting the vast majority of capital, with other emerging markets such as Second, most early entrants to the Asian markets Vietnam, Korea, and Malaysia flourishing as well, invested with fund sponsors with whom they albeit with much smaller amounts of capital. invested previously; those fund sponsors in turn
Chart XI Number of Asian–Focused Real Estate Funds in the Market by Target Investment Region
SE Asia 2% Japan 2%
Asia Diversified 38% India 46% China Asia Diversified China 12% SE Asia Japan India
Source: Probitas Partners
Nearly half of the over fifty Asian–focused funds in the joint ventured operations with local teams. Today, market are sponsored by non–Asian headquartered most sophisticated investors in China and other general partners (e.g., Goldman’s fund referenced Asian markets are seeking truly local teams with above). But for the first time since we have tracked experienced, on the ground players with investment fundraising in Asia, the preponderance of new and operational expertise, and down playing joint funds targeting Asian investment are sponsored ventures constructed out of convenience or to meet by locally–headquartered fund managers. We regulatory requirements. expect to see this evolution of the market continue in 2008 and beyond as investors seek proven local As indicated by Chart XI, in continuation of a two- expertise over global allocator funds. year trend, the majority of country–specific funds raised in 2007 are focused on India. During the Two trends are impacting Asian–focused fund past three years more than $30 billion has been investing, especially with regard to China: committed to the Indian markets. Notwithstanding recent reform initiatives to clarify ownership rights First, there is recognition that endogenous of Indian lands and the extraordinary amount of economic growth coupled with a clearly under– capital invested already, there have been relatively valued currency is likely to offer investors stronger few realizations. Further, there are growing returns than in most other markets. This recognition concerns about dramatic price inflation, which in
12 turn is worrying early investors about their overall as more developed Asian markets. With these return prospects as the bid-ask spread widens for factors in mind, along with the drastic need for new entrants fearful of a correction. Our view is infrastructure and the low cost of labor, yield- that the overall deployment of capital into the seeking investors, opportunity funds, private real estate market may be a bit overstated. Many wealth managers, and retail investors from around of the “real estate” transactions completed in the globe will continue to gravitate towards Asian India include as much as fifty percent of the total markets. The number of U.S. and European-based investment in infrastructure — utilities, roads, etc. — fund sponsors focused on Asia, as evidenced in investments that are prerequisites to the asset Chart XII, is growing. Such fund sponsors continue having value to a tenant or an investor. Therefore, to aggressively forge Asian-based relationships to much of the capital in Indian real estate funds are enable effective deployment of their growing capital deployed into infrastructure as much as real estate. allocations, marrying established investment and That perspective may moderate what appears to asset management know-how with local access to be an over-weighting of capital inflow to Indian deals and operating teams. “real estate.” Fund-of-funds focused on Asian markets are also India today lacks a developed capital market finding quick adoption. As opposed to Europe, for the financing of real estate development and where the surge of fund–of–funds was preceded acquisition. This evolution will increase liquidity by a substantial number of underlying funds and enhance overall market values. But, in the available for investment, fund–of–funds and interim, we believe that continued concerns about underlying funds in the emerging markets of Asia the unsustainability of inflated prices will mute are developing in concert with one another. For realizations and will ultimately cause investors to investors who are uncomfortable underwriting and defer new investments as they wait for proof of understanding country–specific markets for the concept on the market in general. time being, the fund–of–funds vehicle may offer a suitable alternative. Investors can thus participate Other emerging Asian markets offer growing in the return opportunities presented and gain government support for capital importation and educational insights before developing an internal a new and evolving lending environment that is fund investment program. not nearly as affected by the U.S. subprime crisis
Chart XII Manager Headquarters of Asian–Focused Real Estate Funds in the Market
U.S. 28% Asia 46% U.S. Europe 26% Europe Asia
Source: Probitas Partners
13 The Real Estate Secondary Market
Over the next few years, we expect the real estate of the secondary market. They will seek the same secondary market to see a significant expansion portfolio management benefits as their private in transaction volume, as many mature limited equity counterparts have achieved over the past partners actively explore and ultimately execute several years: exiting non-core relationships, secondary sales. For the first time in many maximizing asset value, reallocating capital years, institutional investors are assessing their to preferred managers, and reducing portfolio portfolios with a focus on portfolio construction administrative burden. If one extrapolates to the and management. Large and growing incumbent real estate market the estimate that three to five programs with seven-plus years of investments are percent of private equity funds raised annually are faced with several issues: ultimately sold, then over time we should continue to witness increased real estate fund secondary • Large, mature portfolios with a growing activity. That is, the robust increase in real estate number of legacy positions; secondary transaction volume is expected to mirror • Limited staff resources; and the pattern seen in the private equity markets five years ago. • The need to holistically rationalize their portfolios. Despite the attractive benefits of the real estate secondary market for sellers, many investors Overall, as the liquidity crisis continues to prompt struggle with the thought of a secondary sale. investors to address current portfolio issues, real The secondary market is opaque and the need estate limited partners are expected to make use to maintain confidentiality is often of utmost
Chart XIII Capital Raised by Secondary Fund Specialists
$16 $15.67
$14
$12
$10
$8 $6.35 $6.06 Billions of Dollars $6 $4.46 $5.58 $5.16 $4.10 $3.53 $4 $2.64 $2.20 $2.13 $2 $0.77 $0.81 $0.40 $0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 In the Market Year 2007
Source: Probitas Partners, December 2007
14 importance to participants in a secondary view on trends in secondary deal activity and on sale. This makes tracking the underlying structures and strategies that might be employed market activity extremely difficult. As a result, to achieve their desired objectives. investors often find it difficult to ascertain what opportunities may be available and what issues As illustrated in Chart XIII, the capital raised they should be prepared to face. In addition, even by secondary specialists grew dramatically in the largest institutional investors tend to have response to the investors’ sales of positions in limited staff resources to dedicate to evaluating recent years. The vast majority of these specialists and executing the market opportunity. have been focused exclusively in the private equity arena. While still a relatively small proportion, the Most investors seek an experienced advisor as number of real estate–focused secondary funds has they contemplate a sale of portfolio positions to almost doubled over the last few years. We foresee better understand the market and the process, an increasing growth pattern in anticipation of and if they decide to proceed to a sale, to surging secondary sales activity coming to the help manage some of the inherent obstacles real estate world, like that which the private equity in the secondary market. Probitas Partners, market experienced in 2001 and again in 2007. for example, is one of a limited number of sell- side only agents who assists large institutional As illustrated in Table IV, specialized real estate investors in evaluating liquidity options. secondary specialists like Liquid Realty Partners Investors contemplating a secondary real estate who specialize in acquiring real estate secondary sale should seek an advisor who possesses on- positions recently have raised significant real team real estate expertise and proven liquidity estate secondary funds. Additionally, there management capabilities. This expertise and has been increased activity from private equity unique position in the market offers a panoramic secondary funds preparing to expand their
Table IV Real Estate Focused Secondary Funds
Firm Latest Fund Amount ($MM) Vintage
Belveron Real Estate Partners Belveron Real Estate Partners Fund TBD 2007 ($40MM raised to date)
Credit Suisse CSFB Strategic Partners RE III 300 2005
Landmark Partners Landmark Real Estate Fund V 368 2005
Liquid Realty Partners Liquid Realty Partners IV 572 2007 (Closed December 2007)
Madison Harbor Capital Madison Harbor Real Estate Secondary 150 2007 Fund–of–Funds
Source: Probitas Partners
15 practices into the real estate arena to deploy • Gaining access to specific fund managers the considerable amount of capital they in order to develop relationships for future have raised (over $20 billion raised over the last fundraising; and/or two years). • Increasing exposure to specific funds or And, as the appetite of non-secondary fund fund managers in order to help develop “specialists” also continues to grow, a diverse strategic relationships. group of investors, including primary fund-of- Newly established real estate programs, and funds, endowments, foundations, pension plans especially at–large entities, including sovereign and insurance companies, are either active wealth funds, are expected increasingly to participants or contemplating participation become buyers of existing portfolios of real estate in the secondary market. These investors are funds. These new programs will seek to create purchasing positions in the secondary market a portfolio diversified by vintage year, strategy for a variety of reasons, including: and geography, and to avoid a spike in new fund • Increasing exposure to specific real exposure in their year of inception. estate markets or geographies; We see substantial increases in the number of • Minimizing J-Curve impacts on secondary real estate buyers and sellers (or those portfolios; contemplating such positions) as a clear market trend in 2008 and beyond.
16 Infrastructure
Infrastructure is perhaps the fastest growing hard of infrastructure investments as a material part asset class for institutional investors globally as of their portfolios. This is changing rapidly with they seek to match longer-term liabilities and to nearly half of state pension funds adding or benefit from the strong capital demand in the looking to add substantial allocations in the near- sector. The term infrastructure is broadly defined term. Chart XV highlights the results of a Probitas to encompass the systems and assets used to Partners 2007 survey of the investment community provide necessary public services such as schools, regarding 2008 infrastructure investment intent. hospitals, prisons, airports, railways, and bridges. As shown, investors anticipate an even greater Fundraising for infrastructure has significantly allocation of capital to infrastructure funds in the increased as a result of the rising demand upcoming year evidencing, in part, the anticipated worldwide for private funding of investments to strong demand for private capital for infrastructure design, build, finance and/or operate these assets. improvement in the U.S. While there are a number As shown in Chart XIV, 2007 was already a record- of impediments to the full development of the breaking year for infrastructure fundraising. market, the U.S. market represents the largest potential market for investing private capital into U.S. investors generally lag behind their Australian, public and private infrastructure investments. Canadian, and European counterparts in terms
Chart XIV Global Infrastructure Fundraising
$35 32.9
$30
$25
$20 17.9
$15 Billions of Dollars
$10 5.2
$5 2.4
$0 2004 2005 2006 YTD Dec 2007
Year
Source: Probitas Partners
17 Chart XV 2008 Appetite for Infrastructure “I believe that my firm’s appetite for infrastructure investments in 2008 ...”
40% 34.9% 31.1% 29.3% 30%
20%
10% 3.8% 0.9%
0% Will Increase Will Decrease Will Remain Will Continue to Be Opportunistic Other from 2007 from 2007 Basically the Same Based Upon Market Conditions and Available Opportunities
Source: Probitas Partners
As infrastructure is a relatively new investment real estate nor the “covenant-lite” lending trends segment for most investors, many are still deciding prevalent in large private equity buyouts. These where and how to allocate such investments in characteristics have prompted most investors who their portfolios. Most infrastructure investments have more mature programs to create separate offer long-term income to match long-term infrastructure teams and allocations. liabilities and offer risk/return profiles that fall between core real estate and private equity As illustrated in Chart XVI many investors are buyouts. The underlying assets generally are long- designating infrastructure as a subset of their real lived, with a twenty-five year plus useful life, enjoy estate or private equity allocations, likely sub- inelastic demand and limited competition, often allocating until the investor is able to fully analyze under government regulation, and depreciate the market and establish a distinct asset allocation slowly with predictable maintenance costs while and team. Interestingly, the ultimate answer to retaining tangible long-term asset value. where infrastructure “fits” for new investors often is colored dramatically by perspective. As a result Investments in infrastructure tend to produce of this, we are already seeing, and expect to see inflation-linked revenues and cash flows that remain more, internal tugs-of-war at some institutions, recession resistant, non-cyclical and uncorrelated as well as land grabs by third-party consultants with other investment asset classes. Infrastructure and intermediaries who seek to win the prize of projects most often are conservatively financed infrastructure falling within their sphere to preserve and secured by real assets (or concessions to and expand associated revenues. run the assets). Therefore, infrastructure projects have not been as drastically affected by the recent If the private equity team within an institution is tightening of debt underwriting standards for asked to administer the allocation or to determine
18 Chart XVI Categorizing Infrastructure “Within our portfolio, Infrastructure Investments are or will be placed...”
48.1% 50% Experienced Investors 40.6% Overall Respondents 40% 37.0%
30% 25.5%
17.0% 17.0% 20% 14.8% 11.3% 11.1% 10% 3.7%
0% In Their Own In Our Private In Our Real In Our General Other Separate Allocation Equity Portfolio Estate Portfolio Alternatives Portfolio
Source: Probitas Partners
appropriate benchmarks and design a program, (similar to what we see with operationally-focused often there is an expectation of high teens-plus real estate funds and private equity funds). Most returns and shorter holding periods, more akin investors with sufficient time to study the space to private equity returns. This results in a bias are likely to recognize the unique nature of towards higher-risk oriented investments capable infrastructure investing and to create or migrate of generating such returns in shorter time frames. to a stand-alone asset allocation with dedicated professionals experienced in the area. If the real estate team is given the same task, the performance expectations are often high-single or For further detail and a more in-depth analysis low double-digit returns, more akin to traditional of infrastructure and infrastructure investments, real estate returns. The real estate-centric result please request a copy of the Probitas Partners may be a greater focus on investments in stabilized September 2007 White Paper “Investing in assets with lower volatility, favorable risk sharing Infrastructure Funds.” and risk mitigation arrangements, and more rigorous contractual definitions, albeit with lower overall returns.
As private investment in infrastructure continues to evolve, the parallels to real estate investments are likely to expand. The lines of distinction between infrastructure and real estate are expected to become increasingly blurry in the upcoming years
19 C o n c l u s i o n
Capital flows into real estate and hard asset funds remain strong despite the impact of tightening credit markets and associated asset repricing affecting the overall real estate market. For 2008, we know that most institutional investors are maintaining or expanding their real estate portfolio allocations, although they will be increasingly selective in established markets and more global in their investment approach.
We see most investments continuing to be made in established markets and strategies focused on management teams that possess “back to basics” operational capabilities. This approach favors continued re-ups with existing managers who have performed well during the past cycle but with renewed monitoring of managers with highly leveraged assets acquired in the past two years. Traditional assets offering predictable returns will be targeted (especially by foreign investors using commodity-based capital) along with investors showing an increased interest in distressed assets and debt vehicles.
Investors will continue to target emerging market opportunities in Central and Eastern Europe, Latin America, Asia, and even more esoteric and lesser traveled growth markets, in their search for portfolio yield enhancement. This strategy will be important to maintain return targets as we see further cap rate expansion and continued tight debt markets across all property sectors in U.S. and in most established international markets. The result: a continued strategic focus on a more diversified global portfolio of funds by most institutional investors.
In the real estate secondary market, increased sales activity will be met with newly formed secondary funds and significant additional inflows of yield-driven investors seeking legacy and portfolio return exposure. Ultimately, more secondary market product will become available as the year develops, with investors looking to rebalance and liquidate positions in their maturing portfolios.
The infrastructure investment market also will continue to evolve as institutional investors clarify how they will address this unique sector of the market in their portfolios. The magnitude of the capital required to satisfy the capital needs of this asset class will far exceed investor allocations for the foreseeable future, even though more infrastructure funds continue to enter the market. Additionally, the universe of U.S. investors, although currently lagging behind their global institutional colleagues, will become larger and much more active in the global infrastructure arena in 2008 and beyond.
20 Funds in or Coming to Market
Global Funds ...... 22 North American Funds ...... 22 European Funds ...... 27 Asian Funds ...... 32 Latin American Funds ...... 35 Middle Eastern/North African Funds ...... 35 Other Emerging Markets ...... 36 Mezzanine and Debt Funds ...... 36 Secondaries...... 36 Infrastructure Funds...... 36
21 Funds in or Coming to Market Funds in Market or Thought Coming to Market Over the Next 12 Months As of December 2007
Fund Size (M) Note: Does not include funds currently being placed by Probitas Partners In $ U.S. Unless Marked Market Year Fund/Parent Current Last Status Strategy Website Founded Offices
Global Funds
DLJ Real Estate Capital Partners 2,000 1,150 In Market Global www.credit-suisse.com 1996 New York; IV/ DLJ Real Estate Partners diversified London; Zurich; Tokyo
EI Fund IV/ Equity International 500 N/A In Market Global www.equityinternational.com 1968 Chicago diversified
GDP Global Real Estate 1,000 N/A Coming Global N/A 2007 N/A Opportunity Fund/ GDP Global to Market diversified Fund Managers
GS Developing Markets Real 1,000 N/A In Market Global www.goldmansachs.com 1991 New York; Estate Fund/ Goldman Sachs & diversified London; Paris; Archon Group Hong Kong
Lehman Brothers Real Estate 3,000 2,400 In Market Global www.lehman.com 1850 New York Partners III/ Lehman Brothers diversified
Perella Weinberg Partners II/ € 1,000 N/A In Market Global www.pwpartners.com 2006 New York; Perella Weinberg Partners diversified London
Rockpoint Real Estate Fund III/ 2,000 1,700 In Market Global N/A 2003 San Francisco; Rockpoint Group diversified Boston; Dallas; Tokyo
UBS Global Real Estate/ 1,000 N/A In Market Global www.ubs.com/realestate N/A Hartford UBS Realty Investors diversified
Westbrook Real Estate Fund VII/ 1,500 885 In Market Global N/A 1994 New York; Westbrook Real Estate Partners diversified London; Paris; Tokyo; Singapore
WCP Real Estate Fund 2/ 750 N/A Coming Global www.westportcp.com 2006 Westport, CT; Westport Capital Partners to Market diversified El Segundo, CA; Mumbai
North American Funds
Abacus Multi-Family Partners II/ 350 200 In Market U.S. www.abacuscapital.com 2005 New York Abacus Capital diversified
AG Realty Fund VII/ 500 514 In Market U.S. www.angelogordon.com 1993 New York; Angelo, Gordon & Co. diversified London; Hong Kong
Apollo Domestic Emerging TBA N/A Coming U.S. www.apollorealestate.com 1993 New York Markets Fund/ Apollo Real Estate to Market diversified Advisors
Avenue Real Estate Fund/ 300 N/A In Market U.S. www.avenuecapital.com 1995 New York Avenue Capital Management diversified
22 Fund Size (M) Note: Does not include funds currently being placed by Probitas Partners In $ U.S. Unless Marked Market Year Fund/Parent Current Last Status Strategy Website Founded Offices
Bay Area Smart Growth Fund II/ 125 N/A In Market California www.kennedywilson.com N/A San Francisco Kennedy Wilson diversified
Blackacre Institutional Partners II/ TBA 890 Coming U.S. www.cerberuscapital.com 1994 New York; Los Cerberus Real Estate Capital to Market distressed Angeles Management
Boulder Net Lease II/ Boulder Net 150 100 In Market U.S. net www.boulderfunds.com 1997 Northbrook, IL Lease Funds lease
Broadway Partners Real Estate 1,000 588 In Market U.S. office www.bwaypartners.com 2000 New York; Fund III/ Broadway Real Estate Chicago; El Partners Segundo, CA
Canyon-Johnson Urban Fund III/ 750 600 In Market U.S. www.canyonjohnson.com N/A Beverly Hills Canyon Capital, Johnson diversified Development
Capmark Commercial Realty 1,000 655 In Market U.S. www.capmark.com 1994 Horsham, PA Partners III/ Capmark Financial diversified Group
CASA Partners IV/ Henderson 300 225 In Market U.S. www.henderson.com 1999 Chicago; Global Investors (North America) multifamily Hartford
CB Richard Ellis Strategic Partners 1,000 1,200 Coming U.S. www.cbreinvestors.com 1972 Los Angeles; New US Value V/ CB Richard Ellis to Market diversified York; Boston; Investors Baltimore; London; Paris; Luxembourg; Frankfurt; Milan; Hong Kong; Tokyo
CB Richard Ellis Strategic Partners 1,000 1,200 Coming U.S. www.cbreinvestors.com 1972 Los Angeles; New US Opportunity V/ CB Richard to Market diversified York; Boston; Ellis Investors Baltimore; London; Paris; Luxembourg; Frankfurt; Milan; Hong Kong; Tokyo
Ceres Urban Realty Fund/ 250 100 In Market U.S. www.blakelystern.com N/A New York BlakelyStern Investment Advisors diversified
CIM Urban Real Estate Fund III/ 750 676 In Market California www.cimgroup.com 1994 Los Angeles; San CIM Group diversified Francisco
CityView LA Urban Land Fund I/ 150 N/A In Market California www.americancityvista.com N/A San Antonio; American CityVista/ diversified Santa Monica Saybrook Capital
Clarion Development Ventures III/ 350 205 In Market U.S. www.ingclarion.com 1982 New York ING Clarion Partners development
Colony Realty Partners II/ 1,000 512 In Market U.S. www.colonyrealtypartners.com 1991 Los Angeles; Colony Realty Partners diversified New York; Boston; Hawaii
Concierge Apartment Fund/ 250 N/A In Market U.S. www.drever.net N/A Tiburon, CA Concierge Asset Management multifamily
23 Fund Size (M) Note: Does not include funds currently being placed by Probitas Partners In $ U.S. Unless Marked Market Year Fund/Parent Current Last Status Strategy Website Founded Offices
Cornerstone Apartment 400 450 In Market U.S. www.cornerstoneadvisors.com 1994 Hartford Ventures III/ Cornerstone Real multifamily Estate Advisors
Cornerstone Hotel Income and 600 300 In Market U.S. www.cornerstoneadvisors.com 1994 Hartford Equity Fund II/ Cornerstone Real hospitality Estate Advisors
Crocker Partners IV/ 300 N/A In Market U.S. www.crockerpartners.com 2005 Boca Raton Crocker Partners diversified
Cronus Capital Fund I/ 200 N/A In Market U.S. www.cronuscapital.com N/A New York Cronus Capital diversified
Devon Self Storage Fund/ 250 N/A Coming U.S. www.devonselfstorage.com 1989 Emeryville, CA; Devon Self Storage to Market diversified Amsterdam
DRA Growth and Income Fund VI/ 1,250 1,000 In Market U.S. www.draadvisors.com 1986 New York; San DRA Advisors diversified Francisco; Miami
Dunmore Capital Fund/ 200 N/A In Market California www.dunmorecapital.com N/A Sacramento; Dunmore Capital development Roseville, CA
ECM Income & Growth Fund III/ 250 100 In Market U.S. www.ecm-funds.com 1989 Chicago; Bern, Equity Capital Management diversified Switzerland
Embarcadero Capital Investors II/ 400 120 In Market U.S. office www.ecp-llc.com N/A Belmont, CA; Embarcadero Capital Partners Culver City, CA; San Diego
Exeter Industrial Value Fund/ 300 N/A In Market U.S. www.exeterpg.com 2006 Plymouth Exeter Property Group industrial Meeting, PA
Fidelity Real Estate Growth 750 625 In Market U.S. www.pyramis.com 2005 Boston Fund III/ Fidelity Investments diversified
Fremont Strategic Property 750 500 In Market U.S. www.fremontrealtycapital.com 1997 San Francisco, Partners III/ Pyramis Global diversified New York Advisors
Greenfield Acquisition Partners V/ 1,000 675 In Market U.S. www.greenfieldpartners.com 1997 South Norwalk, Greenfield Partners diversified CT; Chicago
Guardian Realty Fund III/ 500 113 In Market U.S. www.guardianrealty.com N/A Bethesda, MD Guardian Realty Investors diversified
Hanover Real Estate Partners III/ 250 N/A In Market U.S. www.hanoverfinancial.com 1999 Los Angeles; Hanover Financial diversified Irvine; San Francisco; Denver
Henderson Manager of Partners 200 N/A In Market U.S. www.henderson.com 1999 Chicago; Fund/ Henderson Global Investors diversified Hartford (North America)
High Street Real Estate Fund III/ 1,000 400 In Market U.S. www.hsequity.com 2002 Boston High Street Equity Advisors diversified
Hunter Chase Real Estate 250 N/A In Market U.S. www.hunterchase.com 2001 Irving, TX; Opportunity Fund/ diversified Carlsbad, CA Hunter Chase & Co.
Integral Urban Fund I/ 150 N/A In Market U.S. www.integral-online.com 1993 Atlanta The Integral Group diversified
24 Fund Size (M) Note: Does not include funds currently being placed by Probitas Partners In $ U.S. Unless Marked Market Year Fund/Parent Current Last Status Strategy Website Founded Offices
Invesco Real Estate Fund II/ 500 300 In Market U.S. www.invesco.com 1983 Dallas; San Invesco Real Estate diversified Francisco; Newport Beach; Atlanta; New York
JBC Opportunity Fund III/ 300 160 In Market U.S. www.tjbc.com 1981 Chicago John Buck Co. diversified
JER Real Estate Partners IV/ 1,250 823 In Market U.S. www.jer.com 1981 McLean, VA; JER Partners diversified Los Angeles; Chicago; North Haven, CT; Addison, TX
Kimpton Hospitality Partners II/ 300 157 In Market U.S. www.kimptonhotels.com 1981 San Francisco Kimpton Hotel hospitality
KMF Senior Generation Fund/ 300 N/A In Market U.S. senior www.kmfseniorhousing.com N/A Chicago KMF Senior Housing Investors housing
L&B Diversified Strategy Partners/ 400 N/A In Market U.S. www.lbgroup.com 1981 Dallas L&B Realty Advisors diversified
LaSalle Income and Growth 750 500 In Market U.S. www.lasalle.com 1999 Chicago; Atlanta; Fund V/ LaSalle Investment diversified Baltimore; Management Columbus; Dallas; Denver; New York; San Francisco; San Diego; Sacramento
LBA Realty Fund III/ LBA Realty N/A 400 In Market U.S. www.lbarealt.com 1991 Irvine office and industrial
Lexin AmTrust Real Estate 150 75 In Market U.S. www.lexincapital.com 2004 New York Partners II/ Lexin Capital residential
Macfarlane Urban Real Estate 1,500 1,000 Coming U.S. www.macfarlanepartners.com 1987 San Francisco Fund III/ Macfarlane Partners to Market diversified
Macfarlan Special Situations 300 N/A In Market U.S. www.macfarlan.com 1984 Dallas Fund I/ Macfarlan Capital diversified Partners
MGRA Genesis Fund/ 150 N/A In Market U.S. www.mayfieldgentry.com 2003 Detroit MayfieldGentry Realty Advisors diversified
Miller Global Fund VI/ Miller 400 N/A In Market U.S. www.millerglobal.com 1996 Denver; New Global Properties diversified York; London
Northwood Real Estate Partners/ 500 N/A In Market U.S. N/A 2006 Greenwich, CT Northwood Investors diversified
New Boston Real Estate 350 420 In Market U.S. www.newbostonfund.com 1993 Boston Investment Fund VII/ diversified New Boston Fund
Next Block Medical Fund I/ 250 N/A In Market U.S. medical N/A 2004 Dallas Valencia Capital Management office
25 Fund Size (M) Note: Does not include funds currently being placed by Probitas Partners In $ U.S. Unless Marked Market Year Fund/Parent Current Last Status Strategy Website Founded Offices
OCM Real Estate Opportunities 1,000 692 In Market U.S. www.oaktreecapital.com 1995 Los Angeles; Fund IV/ Oaktree Capital diversified New York; Management London; Hong Kong
O'Connor North American 1,000 528 In Market U.S. www.oconnorcp.com 1983 New York; Property Partners II/ diversified Los Angeles O'Connor Capital Partners
Palisades Regional Investment 200 42 In Market U.S. www.palfi.net 1995 Fort Lee, NJ Fund II/ Palisades Financial diversified
Perseus Realty Partners II/ Perseus 200 210 In Market U.S. www.perseusrealtycapital.com 2005 Washington DC diversified
RCG Longview Equity Fund/ 300 N/A In Market U.S. www.rcglongview.com 1994 New York Ramius Capital Group diversified
RLJ Lodging Fund III/ 1,000 743 In Market U.S. www.rljhotels.com 2000 Bethesda, MD RLJ Development hospitality
Rockbridge Real Estate Fund IV/ 200 150 In Market U.S. www.rockbridgecapital.com 1999 Columbus Rockbridge Capital hospitality
Savanna Real Estate Fund I/ 400 N/A In Market U.S. www.savannapartners.com 1992 New York Savanna Partners diversified
Sentinel Realty Partners VII/ 250 200 In Market U.S. www.sentinelcorp.com 1969 New York Sentinel Real Estate Corporation diversified
Stockbridge Real Estate Fund III/ 2,500 1,000 In Market U.S. www.sbfund.com 2003 San Francisco Stockbridge Capital Partners diversified
Stratford Land Fund III/ 300 N/A In Market U.S. land www.thestratfordcompany.com 1981 Dallas The Stratford Company
TA Associates Realty Fund VIII/ 900 700 In Market U.S. www.tarealty.com N/A Boston TA Associates Realty diversified
Thor Urban Retail Fund II/ 500 375 In Market U.S. retail www.thorequities.com 1991 New York Thor Equities
Tishman Speyer Real Estate 2,000 1,100 In Market U.S. office www.tishmanspeyer.com 1978 New York; Venture VII/ Tishman Speyer Atlanta; Boston; Chicago; Los Angeles; Orange County; Stamford
Tucker Development & 300 N/A In Market U.S. www.tuckerdevelopment.com 1996 Chicago Acquistion Fund/ Tucker diversified Development Corporation
Urdang Value Enhancement 450 335 Coming U.S. www.urdang.com 1987 Plymouth Fund VI/ Urdang Capital to Market diversified Meeting, PA; Management Newport Beach; Boston
Walton Street Real Estate 2,500 1,600 In Market U.S. www.waltonst.com 1997 Chicago Fund VI/ Walton Street Capital diversified
Urdang Value Enhancement 450 335 Coming U.S. www.urdang.com 1987 Plymouth Fund VI/ Urdang Capital to Market diversified Meeting, PA; Management Newport Beach; Boston
26 Fund Size (M) Note: Does not include funds currently being placed by Probitas Partners In $ U.S. Unless Marked Market Year Fund/Parent Current Last Status Strategy Website Founded Offices
Walton Street Real Estate 2,500 1,600 In Market U.S. www.waltonst.com 1997 Chicago Fund VI/ Walton Street Capital diversified
European Funds
3E Car Park Investors/ € 500 N/A In Market C. Europe www.3eparking.eu 2007 Luxembourg 3E Car Park Managers parking
Aberdeen European Shopping € 525 N/A In Market Europe retail www.aberdeenpropertyinvestors.com 1986 London Property Fund/ Aberdeen Property Investors
Aberdeen Property Fund France € 1,000 N/A In Market S. Europe www.aberdeenpropertyinvestors.com 1986 Paris & Southern Europe/ Aberdeen diversified Property Investors
Aberdeen Property Fund € 1,500 N/A In Market Norway www.aberdeenpropertyinvestors.com 1986 Oslo Norway II/ Aberdeen Property diversified Investors
Aberdeen Property Fund Russia/ € 500 N/A In Market Russia www.aberdeenpropertyinvestors.com 1986 Copenhagen; St. Aberdeen Property Investors diversified Petersburg
AIG European Real Estate € 500 € 180 In Market Europe www.aiginvestments.com 1987 London; Moscow; Partners II/ AIG Global diversified Glasgow; Real Estate Munich; Berlin; Budapest; Milan; Rome; Warsaw; Barcelona; Madrid
Alternative Property Income € 400 N/A In Market Europe www.axaprivateequity.com 1996 Paris Venture/ AXA Alternative diversified Investment Managers
Apollo European Real Estate TBA 600 In Market Europe www.apollorealestate.com 1993 New York Fund III/ Apollo Real Estate diversified Advisors
AXA Immosolutions/ AXA Real € 2,000 N/A In Market Europe www.axaprivateequity.com 1996 Paris Estate Investment Managers diversified
Baltic Property Trust Arista/ € 165 N/A In Market Russia www.balticpropertytrust.com 2001 Copenhagen Baltic Property Trust diversified
BIP/ Halverton Real Estate € 200 N/A In Market Germany www.gpthalverton.com 2004 London; Investment Management & industrial Amsterdam; CBRE Investors Berlin
Boccaccio/ Aedes Real Estate € 500 N/A In Market Italy www.aedes-immobilaire.com N/A Milan; Rome diversified
Bouwfonds Germany Residential € 300 N/A In Market Germany www.bouwfonds.com 1946 Netherlands Fund/ Bouwfonds Asset residential Management
27 Fund Size (M) Note: Does not include funds currently being placed by Probitas Partners In $ U.S. Unless Marked Market Year Fund/Parent Current Last Status Strategy Website Founded Offices
Brookfield/ Dawnay German TBA N/A Coming Germany www.brookfield.com N/A Toronto; London; Property Fund/ Brookfield Asset to Market diversified New York Management & Dawnay Day
Capmark U.K. Realty Partners 250 N/A In Market U.K. www.capmark.com 1994 Horsham, PA; Fund/ Capmark Financial Group diversified London
Carlyle Europe Real Estate € 1,500 € 760 In Market Europe www.carlyle.com 1987 Washington Partners III/ The Carlyle Group diversified DC; London; Paris; Barcelona; Frankfurt; Luxembourg; Milan; Munich
Catalyst European Property Fund/ € 400 N/A In Market Europe www.catalystcapital.com 2001 London; Paris; Catalyst Capital diversified Frankfurt; Bucharest
Colyzeo II/ Colony Capital & € 1,000 € 229 In Market Europe www.colonyinc.com 1991 Los Angeles; Eurazeo diversified Paris; Madrid; London; Rome; Beirut
Cordea Savills Student Hall Fund/ £300 N/A In Market Europe www.cordeasavills.com N/A London; Paris Cordea Savills student housing
Core Italian Property Fund/ AXA € 200 N/A In Market Italy www.axaprivateequity.com 1996 Paris Real Estate Investment Managers diversified
Corestate German Residential/ € 2,500 N/A In Market Germany www.corestate-capital.ch 2006 Zurich, Frankfurt Corestate Capital residential
Crescent Europe Industrial II/ € 300 N/A In Market W. Europe www.heitman.com 1966 Chicago; London; Heitman & First Islamic Bank Berlin
DIB Real Estate Fund/ Dubai 500 N/A In Market Europe www.dib.ae 1975 Dubai Islamic Bank diversified
Dutch Active Fund/ GPT Halverton TBA N/A Coming Netherlands www.gpthalverton.com 2004 London; to Market Amsterdam; Berlin
E3/ Europolis € 300 N/A In Market Russia www.europolis.com 1990 Moscow; diversified Bucharest; Poland
EB8/ Halverton Real Estate € 1,000 N/A In Market Europe www.gpthalverton.com 2004 London; Investment Management industrial Amsterdam; Berlin
ECM International Real 250 N/A In Market Europe www.ecm-funds.com 1989 Chicago; Bern Estate Fund/ Equity Capital diversified Management
Endurance Health Care/ € 150 N/A In Market Germany www.endurancefund.com 2005 Luxembourg; Orco Property Group healthcare Czech Republic
28 Fund Size (M) Note: Does not include funds currently being placed by Probitas Partners In $ U.S. Unless Marked Market Year Fund/Parent Current Last Status Strategy Website Founded Offices
Endurance Hospitality/ € 250 N/A In Market C./E. Europe www.endurancefund.com 2005 Luxembourg; Orco Property Group hospitality Czech Republic
Endurance Logistics and Light € 150 N/A In Market C./E. Europe www.endurancefund.com 2005 Luxembourg; Industrial/ Orco Property Group industrial Czech Republic
Endurance Office II/ € 200 € 150 In Market C. Europe www.endurancefund.com 2005 Luxembourg; Orco Property Group office Czech Republic
Europa Emerging Europe/ € 600 N/A In Market Non-EU www.europafund.com 1999 London Europa Capital diversified
Europa Fund III/ Europa Capital € 600 € 450 In Market Europe www.europafund.com 1999 London diversified
European Continental Real £ 1,000 N/A In Market Europe www.clearbrook.com N/A London Estate Fund/ Clearbrook Capital diversified Partners
European Logistics Income € 400 N/A In Market Europe www.axa-reim.com 1996 Paris Venture/ AXA Real Estate warehouses Investment Managers
European Real Estate Opportunity € 600 N/A In Market Europe www.axa-reim.com 1996 Paris Fund II/ AXA Real Estate diversified Investment Managers
Evli Property Investments € 150 N/A In Market Russia www.evli.com 1985 Helsinki Russia I/ EVLI Bank diversified
Fondo Azzurro/ Henderson € 250 N/A In Market Italy retail www.henderson.com 1934 London Global Investors
French Institutional Fund/ AXA € 250 N/A In Market France www.axaprivateequity.com 1996 Paris Real Estate Investment Managers diversified
French Property Fund/ € 300 N/A In Market France www.sgam.com N/A Paris Societe Generale diversified
GED Real Estate Eastern € 150 N/A In Market E. Europe www.gediberian.com 1996 Spain; Portugal; Investments/ GED Iberian diversified Romania Private Equity
German Aktiv Property Fund/ € 370 N/A In Market Germany www.teesland.com N/A London; Berlin; Teesland iOG diversified Frankfurt
German Retail Investment € 300 N/A In Market Germany www.morleyfm.com 2004 London Property Fund/ Morley Fund diversified Management
Global Property Fund/ € 150 N/A In Market Balkan www.globalfinance.gr N/A Athens Global Finance SA diversified
Greater London Fund/ AXA Real € 580 N/A In Market London www.axaprivateequity.com 1996 Paris Estate Investment Managers diversified
H2O/ Halverton Real Estate € 1,000 N/A In Market Europe office www.gpthalverton.com 2004 London; Investment Management Amsterdam; Berlin
29 Fund Size (M) Note: Does not include funds currently being placed by Probitas Partners In $ U.S. Unless Marked Market Year Fund/Parent Current Last Status Strategy Website Founded Offices
Iberia/ Norfin € 200 N/A In Market Iberian www.norfin.eu/ N/A Lisbon diversified
ING Property Fund Eastern and € 400 N/A In Market C./E. Europe www.ingim.com N/A Den Haag Central Europe/ ING Investment diversified Advisors
Invista Real Estate TBA N/A In Market Europe www.invistarealestate.com N/A London Opportunity Fund/ Invista diversified
Italian Opportunities II/ € 300 € 200 In Market Italy www.cordeasavills.com N/A London; Milan Cordea Savills diversified
JP Morgan Greater Europe 500 N/A In Market Europe www.jpmorgan.com 1895 London Opportunistic Fund/ JP Morgan diversified Asset Management
MGP Europe Fund III/ Macquarie € 1,750 389 In Market Europe www.macquarie-gpa.com 1991 London Global Property Advisors diversified
MIL Equity Partners Eastern 250 N/A In Market C./E. Europe www.eifunds.com N/A Boston; Budapest Europe/ EquityInvest diversified
Moor Park Real Estate Fund/ € 1,200 N/A In Market Europe www.moorparkcapital.com 2005 London Moor Park Capital diversified
Morgan Stanley Eurozone TBA N/A In Market Europe office www.morganstanley.com/realestate 1969 London Office Fund/ Morgan Stanley
NIAM Nordic Investment TBA € 319 In Market Nordic www.niam.se 1998 Stockholm Fund IV/ NewSec Incentive region Asset Management diversified
NIBC European Real Estate TBA N/A In Market W. Europe www.nibcapital.com N/A Den Haag Fund I/ NIBC
Nordic Aktiv Property Fund/ € 850 N/A In Market Nordic www.teesland.com 2004 London; Teesland IOG region retail Copenhagen; Stockholm; Malmo
Nordic Retail Fund/ Cordea Savills € 500 N/A In Market Nordic www.cordeasavills.com N/A Stockholm region retail
Nordic Retail Fund/ Protego € 585 N/A In Market Nordic www.protegorealestate.com 2004 London; region Stockholm diversified
Orion Income Return Partners/ TBA € 476 In Market Europe www.orioncapman.com 1999 London Orion Capital Managers diversified
PBW II/ IXIS AEW Europe & € 300 N/A In Market Europe www.ixisaew.com N/A Paris Curzon diversified
Petrarca/ Aedes Real Estate € 250 N/A In Market Italy office www.aedesrealestate.nl N/A Amsterdam
Polonia Property Fund II/ € 200 N/A In Market Poland www.aib.ie/ 2003 Dublin; Warsaw Allied Irish Bank diversified
Poteza Real Estate Fund/ € 150 N/A In Market E./C. Europe www.poteza.si N/A Lubljana Poteza Equity Management diversified
30 Fund Size (M) Note: Does not include funds currently being placed by Probitas Partners In $ U.S. Unless Marked Market Year Fund/Parent Current Last Status Strategy Website Founded Offices
Pradera Central & Eastern Fund/ € 300 N/A In Market C./E. Europe www.pradera.com 1999 London; Madrid; Pradera - AM diversified Milan; Istanbul
Pradera European Retail Fund II/ € 500 € 764 In Market S. Europe www.pradera.com 1999 London; Madrid; Pradera - AM retail Milan; Istanbul
Quinlan Private European/ 1,000 N/A In Market Europe www.quinlanprivate.com 1989 Dublin; London; Quinlan Private diversified New York
Real Estate Fund Finland I/ 100 N/A In Market Finland www.pohjola.fi 1891 Helsinki Pohjola Property Management diversified
Rynda en Primeur/ Rynda € 200 N/A In Market France www.ryndaproperty.com 2005 Paris Property Investors diversified
St Wenceslas Property € 350 N/A In Market C. Europe www.hunterpropertymanagement. 1999 Edinburgh Fund/ Hunter Property Fund diversified co.uk/ Management
Svenska Bostadsfonden 7/ TBA N/A In Market Sweden www.svenskabostadsfonden.se 2003 Stockholm Svenska Bostadsfonden diversified
To be named/ BlackRock £ 100 N/A Coming U.K. www.blackrock.com 1988 New York to Market farmland
To be named/ Delancey € 400 N/A Coming Europe www.delancey.com 1990 London to Market diversified
To be named/ Meyer Bergman € 750 N/A Coming Europe www.meyerbergman.com 1970 London; Paris; to Market diversified Berlin
To be named/ SEB TBA N/A Coming German www.sebassetmanagement.de/ 2005 Frankfurt Asset Management to Market diversified
TransEuropean Property IV/ € 250 € 111 In Market Europe www.rockspringim.com 1984 London; Brussels; Rockspring Property Investment diversified Belgium Managers
Tritax Polska No. 1 Fund/ € 92 N/A In Market Poland www.tritax.co.uk/ N/A London Tritax Group diversified
U.K. Commercial Real Estate € 200 N/A In Market U.K. www.londonandcapital.com N/A London Fund/ London & Capital diversified Investment Advisors
UK Actively Managed Property € 250 N/A In Market U.K. www.protegorealestate.com 2004 London Shopping Fund/ Protego Real diversified Estate Investors
UK Property Ventures I Fund/ £ 200 N/A In Market U.K. www.cordeasavills.com N/A London; Paris Cordea Savills diversified
Valartis Real Estate Opportunities € 200 N/A In Market Europe www.valartis.ch/ 2006 Zurich Income Fund/ Valartis Group diversified
Valartis Residential Healthcare € 125 N/A In Market Europe www.valartis.ch/ 2006 Zurich Fund/ Valartis Group medical
West Balkan Real Estate Fund/ TBA N/A In Market E. Europe www.illyriacapital.com 2007 Kastel Novi; Illyria Capital diversified Croatia
31 Fund Size (M) Note: Does not include funds currently being placed by Probitas Partners In $ U.S. Unless Marked Market Year Fund/Parent Current Last Status Strategy Website Founded Offices
Asian Funds
Actis India Real Estate Fund/ 300 N/A In Market India www.act.is 1948 London; Cairo; Actis International diversified Beijing; Mumbai
AIG Asia Real Estate Partners II/ 500 100 In Market Asia www.aiggig.com 1987 Hong Kong; AIG Asia diversified Mumbai; Seoul; Singapore; Shanghai; Tokyo
AG Asia Realty Fund/ 500 N/A In Market Asia www.angelogordon.com 1988 New York; Hong Angelo Gordon diversified Kong
ARCH Asia Property Fund/ 250 N/A In Market Asia www.ayala.com N/A Philippines Arch Capital Management diversified
Ascendas ASEAN Business 400 N/A In Market SE Asia www.ascendas.com 2001 Beijing; Hong Space Fund/ Ascendas office Kong; Singapore; Mumbai
Ascendas China Commercial Sing. $ N/A In Market China www.ascendas.com 2001 Beijing; Hong Fund/ Ascendas 800 diversified Kong; Singapore; Mumbai
Ascendas China Industrial & Sing. $ N/A In Market China www.ascendas.com 2001 Beijing; Hong Business Parks Fund/ Ascendas 600 industrial Kong; Singapore; Mumbai
Asia Property Fund/ LaSalle 1,000 N/A In Market Asia www.lasalle.com & 1999 Tokyo; Singapore; Investment Management & diversified www.prupim.com Hong Kong; PRUPIM Seoul; Shanghai
Carlson Hotel Investment Fund/ 1,000 N/A In Market Asia www.carlson.com N/A Shanghai; Carlson Hotels Worldwide & Lotus hospitality Sydney; Hotel Investment Fund Singapore
Carlyle Asia Real Estate Fund II/ 1,000 410 In Market Asia www.carlyle.com 1987 Washington DC; The Carlyle Group diversified Beijing
Carlyle Santa Fey Real Estate 300 N/A In Market India www.carlyle.com 1987 Washington DC; Fund/ The Carlyle Group diversified Mumbai
CIG Realty Fund/ Unitech Group 1,100 N/A In Market India www.unitechgroup.com 1974 New Delhi; diversified Kolkata; Dubai
CIMB-Mapletree Real Estate RM1,000 N/A Coming Asia www.cimb.com N/A Kuala Lumpur; Fund 2/ CIMB Real Estate and to Market diversified Singapore Mapletree Capital Management
Citigroup Asia II/ Citigroup TBA N/A Coming Asia www.citigroupai.com 1960 New York to Market diversified
Colony Asia Investors II/ 500 151 In Market Asia www.colonyinc.com 1991 Los Angeles; Colony Capital diversified Seoul; Shanghai; Hong Kong; Taipei; Tokyo
32 Fund Size (M) Note: Does not include funds currently being placed by Probitas Partners In $ U.S. Unless Marked Market Year Fund/Parent Current Last Status Strategy Website Founded Offices
Cordea Nichani Indian 200 N/A In Market India www.cordeasavills.com N/A Mauritius; Opportunities I/ Cordea Savills & diversified Maharastra Nichani Group
DHFL Venture Capital Fund/ 200 N/A In Market India www.dhfl.com 1984 Mumbai Dewan Housing Finance Residential
EPG East Euro Asia Property € 300 N/A In Market Asia www.acteeum.com 2006 Netherlands; Fund/ ACTEEUM Group diversified Istanbul
Fire Capital Fund II/ 500 120 Coming India www.firecapital.com N/A New Delhi First Indian Real Estate Capital to Market diversified
Fortune Capital Holdings/ 200 N/A Coming India www.pantaloon.com N/A Mumbai PFH Investment Advisory to Market hospitality
Global Asia Real Estate Fund/ 200 N/A In Market Asia www.globalinv.net 1998 Kuwait Global Investment House diversified
GS Developing Markets Real 1,000 N/A In Market Asia/India www.archongroup.com 1996 Irving, TX Estate Fund/ Archon Group diversified
IL&FS Realty Fund II/ IL&FS 1,000 525 In Market India wwww.ilfsindia.com N/A Mumbai diversified
India Property Fund/ Vornado 500 N/A In Market India www.vno.com & N/A Mumbai Realty Trust and TCG Real Estate diversified www.tcgre.com
India Real Estate Opportunities 400 150 In Market India N/A 2004 New York; Fund II/ IREO diversified Mauritius
Indian Private Equity Fund/ 200 100 In Market India www.khaleejfinance.com/ N/A Bahrain Capivest and Investment & diversified Kuwait Finance House
Indiareit Fund II/ 500 200 Coming India www.nicholaspiramal.com 1988 Mumbai Piramal Enterprises to Market diversified
Infinity Fund/ JM Financial 500 N/A In Market India www.jmfinancial.in/ 1986 Mumbai Investment Managers diversified
ING Real Estate China 700 600 Coming China www.ingrealestate.com 1996 Hong Kong; Opportunity Fund II/ ING Real to Market diversified Beijing; Seoul; Estate Investment Management Singapore; Shanghai; Tokyo; Taipei
ING Real Estate China Residential 700 350 Coming China www.ingrealestate.com 1996 Hong Kong; Fund II/ ING Real Estate to Market residential Beijing; Seoul; Investment Management Singapore; Shanghai; Tokyo; Taipei
ING Real Estate Japan Property 910 N/A Coming Japan www.ingrealestate.com 1996 Hong Kong; Fund/ ING Real Estate Investment to Market diversified Beijing; Seoul; Management Singapore; Shanghai; Tokyo; Taipei
33 Fund Size (M) Note: Does not include funds currently being placed by Probitas Partners In $ U.S. Unless Marked Market Year Fund/Parent Current Last Status Strategy Website Founded Offices
Kotak India Real Estate Fund II/ 350 160 In Market India www.kotak.com 2005 Mumbai Kotak Mahindra Investments diversified
Lone Star Pan Asia Fund / Lone TBA N/A Coming Asia www.lonestarfunds.com 1995 Dallas; London; Star Funds to Market diversified Tokyo; Seoul; Taipei
Lotus Hotel Investment Fund/ 1,000 N/A In Market Asia N/A 2007 London Lotus Hotel Investment Fund hospitality
Merrill Lynch Asia Opportunity TBA N/A Coming Asia www.merrilllynch.com 1914 New York Fund/ Merrill Lynch to Market diversified
MGP Asia Fund III/ Macquarie 1,750 921 In Market Asia www.macquarie-gpa.com N/A London Global Property Advisors diversified
New City Asia Partners/ 1,000 N/A In Market Asia www.newcitycorp.com 2000 Tokyo; Osaka; New City Capital diversified Seoul; Shanghai; San Francisco
OCM Asia Principal TBA 577 Coming Asia www.oaktreecapital.com 1995 Los Angeles; Opportunities II/ to Market diversified New York; Hong Oaktree Capital Management Kong
Phoenix Asia Real Estate 250 N/A In Market Asia N/A N/A Hong Kong Investments III/ Phoenix Advisors diversified
Prax Capital Fund III/ 160 N/A In Market China www.praxcapital.com N/A Shanghai; Prax Capital Real Estate diversified Barcelona; Miami
Protego WIRE Indian Office 400 N/A In Market India www.protegorealestate.com 2004 London; Development Fund/ Protego Real diversified Stockholm; Estate Investors Rotterdam
Red Fort Real Estate India Fund II/ 875 350 In Market India www.redfortcapital.com N/A Chicago; New Red Fort Capital diversified Delhi; Mumbai
Rutley Indian Property/ 1,000 N/A Coming India www.rutleycapitalpartners.com 2005 London; Mumbai Rutley Capital Partners to Market diversified
SEB Asian Property Fund SICAV- € 350 N/A In Market Asia www.sebassetmanagement.de/ 2005 Frankfurt FIS/ SEB Asset Management diversified
SGAM AI & Plus India Real € 200 N/A In Market India www.sgam-ai.com N/A Paris Estate Fund diversified
Tata Realty and Infrastructure 750 N/A In Market India www.tata.com N/A Bangalore; Fund/ Tata Group diversified Mumbai
Tishman Speyer GSC China Fund/ 500 N/A In Market China www.tishmanspeyer.com 1978 New York; Tishman Speyer diversified Beijing; Shanghai
Tishman Speyer India Fund/ 600 N/A In Market India www.tishmanspeyer.com 1978 New York; Tishman Speyer, ICICI diversified Bangalore
To be named/ Greenwich Group 1,000 N/A In Market India www.greenwichgrp.com 1995 New York International diversified
34 Fund Size (M) Note: Does not include funds currently being placed by Probitas Partners In $ U.S. Unless Marked Market Year Fund/Parent Current Last Status Strategy Website Founded Offices
Trikona India Real Estate Fund/ 400 N/A In Market India www.trikonacapital.com 2006 New York Trikona Capital diversified
Urban Infrastructure Opportunity 1,000 50,000 Coming India www.ril.com 1993 Mumbai Fund II/ Reliance Industries INR to Market diversified
Latin American Funds
Black Creek Mexico Residential 500 N/A In Market Mexico www.blackcreekcapital.com 1991 Denver Fund/ Black Creek Group residential
LaSalle Mexico Fund/ LaSalle 500 N/A In Market Mexico www.lasalle.com 1978 Chicago Investment Management diversified
Paladin Realty Latin America 500 N/A Coming Latin www.paladinreit.com 1995 Los Angeles Investors/ Paladin Realty to Market America diversified
PLA Industrial Fund II/ 140 N/A In Market Mexico www.prudential.com/prei 1970 Parsippany, NJ Prudential Real Estate Investors industrial
PLA Residential Fund III/ 400 250 In Market Mexico www.prudential.com/prei 1970 Parsippany, NJ Prudential Real Estate Investors residential
PLA Retail Fund I/ Prudential Real 425 N/A In Market Mexico retail www.prudential.com/prei 1970 Parsippany, NJ Estate Investors
To be named/ The Carlyle Group 500 N/A Coming Latin www.thecarlylegroup.com 1987 Washington DC to Market America diversified
Walton Street Mexico 350 N/A Coming Mexico www.waltonst.com 1995 Chicago Fund I/ Walton Street Capital to Market diversified
Middle Eastern/North African Funds
Al-Futtaim MENA Real Estate 500 N/A In Market MENA www.afrealestate.com N/A Dubai Development Fund/ Al-Futtaim region Real Estate
DIB Real Estate Fund/ Dubai 500 N/A In Market Middle East www.dib.ae 1975 Dubai Islamic Bank region
Global Real Estate Ijarah Fund/ 300 N/A In Market MENA www.globalinv.net N/A Kuwait Global Investment House region
Gulf Springs/ Unicorn 150 N/A In Market MENA www.unicorninvestmentbank.com 2004 Bharain Investment Bank region
SGAM Almak Development/ 100 N/A In Market Morocco www.sgam-ai.com N/A Paris SGAM Real Estate Investment Management
35 Fund Size (M) Note: Does not include funds currently being placed by Probitas Partners In $ U.S. Unless Marked Market Year Fund/Parent Current Last Status Strategy Website Founded Offices
Other Emerging Markets
Paladin Realty Eurasia Investors/ 300 N/A Coming Turkey www.paladinreit.com 1995 Los Angeles Paladin Realty to Market diversified
Rutley Capital East African TBA N/A Coming E. Africa www.rutleycapitalpartners.com 2005 Nairobi Property Fund/ Knight Frank & to Market diversified ICEA Asset Management
Mezzanine and Debt Funds
Fillmore West Fund/ 700 420 In Market U.S. www.fillmorecap.com N/A San Francisco; Fillmore Capital Partners debt and Worthington, OH mezzanine
Five Arrows Realty Securities 600 445 In Market U.S. www.us.rothschild.com/realestate 1981 New York; Fund V/ Rothschild Realty diversified Washington; Toronto; Montreal
Guggenheim Structured Real 875 768 In Market U.S. debt www.guggenheimrealestate.com 2001 New York Estate Fund III/ Guggenheim Real Estate
To be named/ Allbridge 175 N/A In Market U.S. www.allbridgeinv.com N/A Charlotte Investments & Allied Capital debt and mezzanine
Secondaries
Belveron Real Estate Partners TBA N/A In Market Real estate www.belveronpartners.com 2006 San Francisco Fund/ Belveron Real Estate secondaries Partners
Madison Harbor Real Estate 150 N/A In Market Real estate www.madison-harbor.com N/A New York Secondary Fund of Funds/ secondaries Madison Harbor Capital
Infrastructure Funds
3i India Infrastructure Fund/ 3i 1,000 N/A In Market India www.3i.com 2007 Bangalore diversified
ABN AMRO Renewable Energy € 200 N/A In Market Global www.capital.abnamro.com 1994 Amsterdam; Fund/ ABN Amro diversified London
Abraaj Infrastructure 2,000 N/A In Market MENA and www.abraaj.com 2005 Dubai and Growth Capital S. Asia Fund/ Abraaj
36 Fund Size (M) Note: Does not include funds currently being placed by Probitas Partners In $ U.S. Unless Marked Market Year Fund/Parent Current Last Status Strategy Website Founded Offices
Abu Dhabi Investment 1,000 N/A In Market MENA and www.adic.ae 2006 Abu Dhabi Infrastructure/ Abu Dhabi Asia Investment Company
Alterna Core Capital Asset Fund/ 1,000 N/A In Market U.S. www.alternacapital.com 2007 Westport, CT Alterna Capital diversified
Ampere Equity Fund/ Evelop € 500 N/A In Market W. Europe www.evelop.com N/A Utrecht diversified
Atherstone India Invest 1,000 N/A In Market India www.aii-group.com N/A Geneva Infrastructure Fund/ diversified Atherstone India invest
Axis Infrastructure Fund/ 500 N/A In Market India www.axisbank.com 1994 Mumbai Axis Bank diversified
Baer Capital Infrastructure & 500 N/A In Market India www.baercapital.com 2006 Dubai Real Estate/ Baer Capital Partners diversified
Brookfield Infrastructure Fund/ 2,000 N/A Coming Global www.brookfield.com 2007 Toronto; New Brookfield Asset Management to Market diversified York; London
Canaan Natural Gas X/ 250 N/A Coming U.S. www.canaanresources.com N/A Oklahoma City Canaan Resources to Market diversified
Central American Mezzanine 150 N/A In Market C. America www.empglobal.com 2006 Washington Infrastructure Fund/ EMP Global diversified
China AME Energy Fund/ 500 N/A In Market China www.archfunds.com 2002 London ARCH Financial Products diversified
Citigroup Infrastructure Investors/ 3,000 N/A In Market U.S. / www.citigroupai.com 2007 New York Citigroup Europe diversified
Climate Change Investment I/ € 150 N/A In Market Emerging www.3c-company.com 2003 Frankfurt Climate Change renewable
Colonial First State European € 1,500 N/A In Market Europe www.cfsgam.com 1988 London; Sydney Diversified Infrastructure Fund/ diversified Colonial First State Asset Management
Constans Lebanon Recovery € 500 N/A In Market Middle East www.argentfunds.com N/A Dubai Investment Fund/ Argent diversified Financial Group
CVC/ Vineburg Infrastructure 2,000 N/A In Market Europe www.cvc.com 1981 London; Paris; Fund/ CVC Capital Partners diversified Luxembourg; Brussels; Milan
DIB Infrastructure Fund/ Dubai 500 N/A In Market Middle East www.alislami.co.ae 2005 Dubai Investment Bank diversified
EMP Indonesia Infrastructure 1,000 N/A In Market Indonesia www.empglobal.com 2006 Washington; Fund/ Emerging Markets Partners diversified Singapore; Hong Kong
37 Fund Size (M) Note: Does not include funds currently being placed by Probitas Partners In $ U.S. Unless Marked Market Year Fund/Parent Current Last Status Strategy Website Founded Offices
EQT Infrastructure Fund/ EQT € 1,000 N/A Coming Scandinavia www.eqt.se 2007 Stockholm to Market diversified
European Renewable Energy € 250 N/A In Market U.K. / France www.platinafinance.com 2002 London Fund/ Platina Finance wind
GIMV-Dexia Infrastructure Fund/ € 150 N/A In Market Europe www.gimv.com 1980 Antwerp GIMV diversified
Global Environment Emerging 350 N/A Coming Global www.globalenvironmentfund.com 1990 Washington Markets Fund III/ to Market diversified Global Environment Fund
Global Infrastructure Partners I/ N/A N/A In Market U.S. / N/A 2006 New York; Hong Global Infrastructure Partners Europe Kong diversified
GS European Infrastructure Fund/ € 3,000 N/A Coming Europe www.gs.com/pe 2006 New York; Goldman Sachs to Market diversified London
Guggenheim Infrastructure Fund/ 1,000 N/A In Market Global www.guggenheimpartners.com 2006 New York Guggenheim Partners diversified
Gulf One Infrastructure Fund I/ 2,000 N/A In Market GCC www.gulf1bank.com 2006 Bahrain Gulf One Bank diversified
HBG Infrastructure/ 200 N/A In Market India / www.hbgholdings.com N/A Dubai HBG Holdings Pakistan diversified
ICICI India Infrastructure Fund/ 2,000 N/A In Market India www.icicibank.com N/A Mumbai ICICI Bank diversified
IDFC Private Equity Fund II/ 2,000 440 In Market India www.idfc.com 2004 Mumbai IDFC Private Equity diversified
IFCI Auto Component Fund/ € 100 N/A In Market India / Asia www.ifciventure.com 1988 Mumbai IFCI Venture diversified
India Global Competitive Fund/ INR N/A In Market India www.srei.com 1989 Calcutta; SREI Infrastructure Finance 10,000 diversified Bangalore; Mumbai; New Delhi
Indian Infrastructure 300 N/A In Market India www.2icapital.com N/A Bangalore Development Fund/ 2i Capital diversified
Infracapital Partners/ £1,000 N/A In Market W. Europe www.prumandg.com N/A London Prudential Plc diversified
ING Atlas Infrastructure Fund/ € 1,000 N/A In Market Europe www.ing.com N/A London ING Real Estate Investment diversified Management
International Infrastructure £500 N/A In Market Pakistan N/A 2007 Dubai Financing Pakistan Fund/ 2if diversified
LODH Macquarie Infrastructure CHF N/A In Market Europe www.lodhpe.com 2002 Zurich Fund/ Lombard Odier & 1500 diversified Macquarie
38 Fund Size (M) Note: Does not include funds currently being placed by Probitas Partners In $ U.S. Unless Marked Market Year Fund/Parent Current Last Status Strategy Website Founded Offices
Macquarie India Infrastructure 1,000 N/A Coming India www.macquarie.com.au 2000 New York; Opportunities Fund/ Macquarie to Market diversified London; Sydney
Macquarie Telecommunications 3,000 N/A Coming Global www.macquarie.com.au 2000 New York; Infrastructure I/ Macquarie to Market diversified London; Sydney
MENA Infrastructure Fund/ 500 N/A In Market MENA www.dubaiic.com 2005 Dubai Dubai International Capital & region HSBC Bank
Meridiam Infrastructure/ € 600 N/A In Market OECD www.meridiam.com 2006 Paris Credit Agricole Private Equity diversified
Merrill Lynch Infrastructure Fund/ 2,000 N/A Coming Global www.merrilllynch.com 2007 New York Merrill Lynch to Market diversified
J.P. Morgan & Chase India 2,000 N/A In Market India www.jpmorganpartners.com 2007 New York Infrastructure Funds/ J.P. Morgan diversified
Morgan Stanley Infrastructure/ 3,000 N/A In Market U.S. / N/A N/A New York Morgan Stanley Canada diversified
Network European Infrastructure € 100 N/A In Market W. Europe www.finint.it 1980 Conegliano, Italy; Partners/ Finanziaria diversified Milan; Dublin Internazionale
New Africa Infrastructure Fund/ 1,000 N/A In Market Africa www.newafricanminingfund.co.za N/A Dunkeld, South Decorum Capital diversified Africa
NGP Midstream and Resources/ 1,500 N/A In Market N. America www.naturalgaspartners.com 1988 Irving, TX Natural Gas Partners diversified
NIBC European Infrastructure 500 N/A In Market Europe www.nibc.com 2007 Den Haag, Fund/ NIBC diversified Netherlands
Pacific Transport Fund/ 300 N/A In Market Asia www.clsa.com/privateequity 2006 Hong Kong CLSA Capital Partners diversified
Paladin Realty Community 1,000 N/A In Market S. America N/A 1995 Los Angeles Infrastructure Finance Fund/ diversified Paladin Realty Partners
Pan African Infrastructure 1,000 N/A In Market Africa N/A 2005 Pretoria Development Fund/ South Africa diversified Public Investment Commission
Pan Asian Project Development 100 N/A In Market S. Asia www.ilfsinvestmentmanagers.com 1996 Mumbai; Fund/ Infrastructure Leasing & diversified Bangalore Financial Services
RREEF North American 500 N/A In Market N. America www.rreef.com N/A New York; Infrastructure Fund/ diversified Sydney; London Deutsche-RREEF
Santander Infrastructure II/ € 1,500 N/A In Market Global www.santanderprivateequity.com N/A Madrid Capital Grupo Santander diversified
39 Fund Size (M) Note: Does not include funds currently being placed by Probitas Partners In $ U.S. Unless Marked Market Year Fund/Parent Current Last Status Strategy Website Founded Offices
Saratoga Capital Indonesia Fund/ 500 N/A In Market Indonesia N/A 1998 Jakarta Saratoga Investama Sedaya diversified
Starwood Energy Infrastructure 400 N/A Coming N. America www.starwoodcapital.com 2005 Greenwich, CT Fund/ Starwood Energy Group to Market diversified
Thomas Weisel India 200 N/A In Market India www.tweisel.com 2007 Mumbai Infrastructure Fund/ diversified Thomas Weisel Partners
UBS International Infrastructure 750 N/A In Market Global www.ubs.com 2002 Zurich Fund/ UBS Global Asset diversified Management
40 San Francisco 425 California Street Suite 2300 San Francisco, CA 94104 Tel 415.402.0700 Fax 415.402.0052
N e w Yo r k 1251 Avenue of the Americas Suite 2390 New York, NY 10020 Tel 212.403.3662 Fax 212.403.3537
L o n d o n Adam House 7-10 Adam Street London WC2N 6AA Tel 44.20.7280.5801 Fax 44.20.7280.1866