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The 2007 Private Equity Real Estate Review

-Sample Pages

Contents:

1. Executive Summary 7 9. Overview of Fund Terms and Conditions 107

2. Real Estate Online 13 10. Fund Listings - Key Terms and Conditions 113

3. Overview of Fundraising Market 17 11. Overview of Universe of Real Estate Firms 123

4. Overview of Real Estate Fund of Funds Market 37 12. Real Estate Fund Performance 129

5. Review of Placement Agents 45 13. Real Estate Firm Preferences 139

6. Listing of Funds Closed 2006 - 2007 55 14. Real Estate Firm Profiles 157 - European Funds Closed 2006-2007 - North American Funds Closed 2006-2007 15. Overview of Investors in Real Estate Funds 283 - Rest of World Funds Closed 2006-2007 16. Profiles for Top 250 Investors in Real Estate 295 7. Listings of Funds on the Road 81 - European Funds Closed 2006-2007 17. Index 439 - North American Funds Closed 2006-2007 - Index of General Partners - Rest of World Funds Closed 2006-2007 - Index of Limited Partners

8. Listings of Expected New Fund Launches 101

Executive Summary Fig. A: Investors’ Current Real Estate Investment Status

3% 2% The growth experienced by the private equity real At or close to commitment but investing opportunistically estate industry over recent years is unparalleled in 23% the history of the asset class. From a niche sector in the overall private equity universe, real estate funds At or close to target commitment but investing to have now grown in stature, and are currently second maintain only to buyout funds in terms of capital raised. 2006 Unfilled target commitment proved to be a record breaking year for real estate 72% fundraising, with a total of 116 funds achieving final Unlikely to consider closes, raising an aggregate $72bn in commitments. investments in next 2 years This record looks set to be beaten again however, as by August 2007 a total of $50bn had already been raised over the first eight months of the year. Review indicates that an overwhelming 78% of median IRRs of private equity real estate funds have Investor appetite for the asset class has been the investors plan to increase their allocations to private been excellent, varying between 8% and 12% for driving force behind this growth, as existing investors equity real estate in the medium to long term. funds of vintages 1996-1999 and between 16% and increase their allocations, and new investors Managers raising new vehicles will also be 26% for funds of vintages 2000 to 2004. These continue to make their maiden investments. The encouraged by figures indicating that 72% of existing returns are amongst the best in the industry, with average allocation to real estate amongst current investors are currently short of their target median performance constantly exceeding the investors is 4.6%, with the average target allocation allocations, with only 3% unlikely to invest over the Preqin All Private Equity Benchmark, also beating to real estate a significant 1.1% higher at 5.7%. It is next two years (fig. A). the buyout performance for funds of all but two clear that there is potential for even greater growth vintage years since 1998. over the coming years; in fact a survey undertaken in The forces driving this growth in investor appetite are the course of gathering data for the Real Estate clear: strong, steady performance. As Fig. B shows,

Fig. B: Median Net IRR, Real Estate vs. All Private Equity, Fig. C: Growth in Real Estate Funds in Market, Buyout & Venture, Vintages 1995 - 2004 January 2006 - August 2007 30 250 25 194 20 200

15 150 Number of Funds 10 on the Road

5 100 92 Aggregate Target 76 of Funds on the 0 Road ($bn) 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 -5 50 29 32.5 16 -10

Net IRR Since InceptionNet (%) 0 January 2006 January 2007 August 2007 Real Estate All Private Equity Buyout Venture

The dispersion of individual fund performance is the future for the industry is certainly looking good. average fund sizes continuing to grow, we expect characterised by a relatively small standard Fund managers have responded to the high 2008 to match if not exceed the total raised in 2007. deviation around the median, meaning that although demand, and as fig. C shows, there are currently We predict a further $80 - $100 billion to be raised real estate funds are unlikely to produce the more vehicles on the road than at any other point in over the course of 2008 from a similar number of incredible returns that the top performing venture the history of the asset class. Quarterly fundraising vehicles, with mega-sized funds accounting for a and buyout have, real estate funds are relatively has been steadily increasing, and with such an significant proportion of this total. unlikely to provide negative returns to their investors. excellent stock of new vehicles on the road, and with Only 5% of real estate funds raised over the past investor appetite at a high level, we predict that 2007 However, although overall strong fundraising levels twenty years have produced negative IRRs, will be another record breaking year. are set to continue, conditions for managers raising comparing favourably with venture (39%) and buyout new vehicles are set to become more demanding in (17%). In terms of aggregate capital commitments, we 2008 and beyond. predict that $75 - $85 billion will be raised by 90 - With such a strong track record driving ever 100 funds at year end for 2007, and with an The private equity real estate industry has grown increasing investor enthusiasm for real estate funds, increased level of funds in the market, and with dramatically over the past three years, with strong

© 2007 Private Equity Intelligence Ltd 4 The 2007 Private Equity Real Estate Review and steady returns leading to high levels of investor Fig. D: Ratio of Funds in Market vs. Funds Closed in Previous 12 Months appetite and demand for new vehicles. Real estate managers have been able to raise new vehicles at a 2 1.81 frenetic pace - In January 2006 the aggregate target 1.8 of funds on the road was $16 billion, but over the 1.6 Ratio of Number of Funds in course of the year a total of $72 billion was raised. 1.4 Market vs. Funds Closed in 1.21 Previous 12 Months With so much demand for new vehicles fund 1.2 managers were able to gather commitments in 1 record time, and the stock of new vehicles on the 0.8 0.66 Ratio of Value of Funds in road, although healthy, was relatively low in 0.6 Market vs. Funds Closed in 0.45 Previous 12 Months 0.4 comparison with the huge levels of capital being 0.26 0.28 raised. 0.2 0 January 2006 January 2007 August 2007 First time fund managers, who have traditionally found fundraising to be a demanding process have enjoyed great success, with 28% of funds closed in targeted fundraising. manageable level, but does indicate that managers the period 2006 - August 2007 being raised by newly may find it more difficult to gain the attention of established firms. When this is compared with the However, as fig. D shows, there is evidence that the investors in a more competitive market. figure of 13% for the private equity industry as a fundraising environment is beginning to change. whole, it becomes clear just how buoyant the real Whereas in the past the level of funds on the road The appetite for new funds is still high, but with an estate fundraising market has been. Managers of all has represented only a few months of fund closes in increased number of firms vying for investor’s sizes and levels of experience have been able to terms of aggregate fund value, there is now a much attention and commitments, careful targeting of LPs raise capital in an environment where the reasonably greater level of competition in the market. The and an effective marketing campaign will become low stock of funds on the road has ensured that all aggregate target value of the 194 funds in market more important than ever in 2008 and beyond. managers have been able to make themselves currently stands at $92 billion, representing just over heard, enabling them to achieve, if not exceed, their one year’s worth of fund closes. This is still a

© 2007 Private Equity Intelligence Ltd 5 The 2007 Private Equity Real Estate Review among institutional investors. Citigroup Property Fig. 10: Fundraising by Firm Location Partners' CPI Capital Partners Asia closed with 120 commitments worth $1.3 billion. This fund will make 112 investments in China, India, Japan, Korea, 100 97.5 Singapore, Malaysia and Thailand. (Fig. 8) 80 No. Funds Closed by GPs in Region Fundraising by GP location 60 Aggregate 38 In terms of firm location the majority of funds have 40 Commitments ($bn) 24 been raised by firms operating in North America. As 20 17 fig. 9 shows, funds managed by North American 6.4 firms account for 64% of all funds raised during the 0 North America Europe Rest of World period 2006 - August 2007. European firms are the second largest in terms of funds raised accounting Fig. 11: Global Fundraising by Strategy for 22% of the global total, while firms based in Asia and the Rest of World account for 14%. 60% 51% 50% 44% In terms of value, North American fund managers 40% dominance of the global market is even greater, with funds raised by firms in this region accounting for an 30% aggregate $97.5 billion, 80% of all capital raised. 20% European managers account for $17 billion, 15% of

Percentage of Funds 11% 9% all capital raised, while managers based in Asia and 10% 6% the Rest of the World raised $6.4 billion, 5% of total 0% capital raised. (Fig. 10) Core - Plus Value Added Oportunistic Real Estate Fund Mezzanine of Funds Fund Type

© 2007 Private Equity Intelligence Ltd 6 The 2007 Private Equity Real Estate Review employed their services. 42% of funds currently on Fig. 31: Effect of Firm Experience on Placement Agent Use the road are using a placement agent, a further 5% 45% increase. 40% 42%

35% The consistent growth seen in the proportion of 35% closed end real estate funds that use an outside firm 30% to aid in fundraising points not only towards the 25% increasingly competitive fundraising marketplace but 20% also to the ongoing significance of placement agents 15% in their role of helping fund managers to source and Agent Placement 10%

secure capital commitments. Placement agents look using Funds of Proportion 5% set to become a progressively more important tool 0% for fund managers as the private equity real estate First-time Fund Managers All Managers industry continues to expand, particularly as it becomes more established in markets outside of Europe and North America. Influence of Firm History In contrast, the level of experience of a private equity real estate manager has a relatively smaller effect on Which Firms are using Placement Agents• Within other sectors of the private equity industry the likelihood that the manager will use a placement such as buyout and venture, the level of experience agent. As fig. 31 shows, 35% of first-time real estate A number of factors can be seen to affect the a private equity fund manager possesses has a fund managers used a placement agent in proportion of firms that use a placement agent. This significant impact on the likelihood that a manager comparison to 42% seen across real estate includes the geographic focus of the fund, the size of will use a placement agent, with a much lower managers of all levels of experience. the fund and the level of experience of the firm. proportion of first-time fund managers using a third party fundraising service compared to more In contrast with the private equity industry as a experienced managers. whole, where a large number of experienced managers are raising their third fund or more, the

EUROPEAN FUNDS CLOSED 2006-2007

Target Final Close Placement Geographic Fund Name / Firm Name Strategy Sector Focus Sample LPs Close Close Date Agent Focus Aberdeen Indirect Property Partners 750 EUR 624 EUR Feb-06 Not Used Core-Plus & Europe Folksam & Nordea Liv Fund of Funds Aberdeen Property Investors AG Net Lease Realty Fund 160 USD Jan-07 Value Added North America, Retail Global Angelo, Gordon & Co - Real Estate Apollo Real Estate Finance 625 USD 625 USD Jan-07 UBS Value Added North America, Pennsylvania Public School Employees' Retirement Corporation Investment Europe System Bank Private Apollo Real Estate Advisors Equity Funds Group Beacon Capital Strategic Partners V 4,000 USD 4,000 USD Aug-07 Value Added North America, Office California State Teachers' Retirement System, West Europe Pennsylvania Public School Employees' Retirement Beacon Capital Partners System, Pennsylvania State Employees' Retirement System, Portfolio Advisors & Teachers' Retirement System of the State of Illinois Benson Elliot European Real Estate 300 EUR 335 EUR Aug-06 Probitas Value Added Europe Hatteras Investment Partners, Hewlett Packard Company Partners II Partners Pension Fund, LGT Capital Partners, North Carolina Benson Elliot Capital Management Department of State Treasurer & State Teachers' Retirement System of Ohio Blackstone Real Estate Partners V 4,000 USD 5,250 USD Jun-06 Opportunistic North America, Allstate Alternative Investments, New Jersey State Global Investment Council, New York City Teachers’ Retirement Blackstone Real Estate Group System, New York State Teachers' Retirement System & Teacher Retirement System of Texas Brockton Capital I 150 GBP Apr-06 Opportunistic UK, West Any Harel Insurance Investments Europe Brockton Capital Capman Real Estate Fund II 150 EUR 150 EUR Apr-07 Not Used Opportunistic Finland, Europe Commercial, Hotels, CapMan Real Estate Industrial, Office & Residential CB Richard Ellis Strategic Europe 1,000 USD Jul-07 Value Added France, Industrial, California State Teachers' Retirement System, Maryland Fund III Germany, Italy, Office, State Retirement & Pension System, New York State West Europe Residential & Teachers' Retirement System, Ohio School Employees' CB Richard Ellis Investors Retail Retirement System & Teachers' Retirement System of the State of Illinois

NORTH AMERICAN FUNDS IN MARKET

Target Closings to Date / Placement Fund Name / Firm Name Strategy Geographic Focus Sector Focus Size (mn) Expected Closings Agent AG Core Plus Real Estate II 750 USD Core-Plus North America Angelo, Gordon & Co - Real Estate AG Realty Fund VII Opportunistic North America Commercial, Hospitality, Hotels, Industrial, Leisure/Entertainment, Angelo, Gordon & Co - Real Estate Medical/Healthcare, Office, Residential, Retail & Senior Home Allegis Value Trust 300 USD First Close: 200 USD (Sep-2006) Not Used Value Added North America UBS Realty Investors American Value Partners I 400 USD Fund of Funds, North America Opportunistic & American Value Partners Value Added APCA Property Fund II 150 USD Core-Plus North America Ashforth Paradigm Capital Advisors Apollo Domestic Emerging Markets 500 USD JT Partners North America Fund Apollo Real Estate Advisors Bay Area Smart Growth Fund II 125 USD North America Industrial, Office, Residential & Retail Kennedy Wilson BGF Real Estate Fund I 250 USD Farrell Marsh & Opportunistic & North America Multi-family & Residential Co. Value Added Bridge Investment Group BlackRock Retail Fund 750 USD Value Added North America Retail BlackRock Realty Blackstone Real Estate Partners VI 10,000 Opportunistic North America, Global Any USD Blackstone Real Estate Group Boulder Net Lease II 150 USD North America Office & Residential Boulder Net Lease Funds Broadway Real Estate Fund III 1,000 USD Triago Value Added North America Office Broadway Real Estate Partners Capmark Commercial Realty Partners 1,000 USD Value Added North America Office, Residential & Retail III Capmark Financial Group

Unlike most other types of private equity fund, real Relatively few real estate funds offer rebates of in our sample charged a reduced rate of estate funds generally charge a consistent monitoring and transaction fees back to LPs - only management fee to larger LPs, with fees declining in management fee throughout the life of the fund, 30% of the funds in our sample of funds had bands above two or three size breaks. The largest without any reductions to fees after the investment provisions for this. This contrasts with other types of LPs are typically charged around 65% the normal period, as is generally the case with venture and private equity fund, e.g. buyout funds, where such level of management fee, although this can be as buyout funds. 84% of the funds in our sample had no rebates have become the norm. low as 50%. There is wide variation in what reduction in fees after the investment period. 9% of constitutes a 'large' LP, ranging from 'above $1 funds charge the same percentage rate fee after the Discounts for Larger LPs: another aspect of the million' to as much as 'above $100 million', investment period, but applied this to invested terms and conditions of real estate funds that differs depending upon the target investor base of the fund capital as opposed to commitments; and 6% of funds from the general private equity practice appears to in question. reduced the percentage rate charged. be the special treatment afforded to larger LPs. For most types of private equity fund (with the sole exception of fund of funds), large LPs are treated to all intents and purposes in the same way as smaller LPs. In real estate, however, exactly half of the funds

Fig. 38: Management Fees by Strategy Fig. 39: Real Estate Funds Management Fee vs. Fund Size

100% 2.00% 90% 1.80% 1.88% 80% 1.60% 1.71% 70% 1.40% 1.51% 1.50% 60% 1.20% Mean 2.0% or more 1.00% 50% 1% to 1.99% Median 0.80% 40% Below 1% 0.60% 30% 20%

Management Fee Management 0.40%

0.20% Funds of Percentage 10% 0.00% 0% Opportunistic Value-Added Below $250 mn $250 mn to $499 mn $500 mn and Above Fund Type Fund Size ($mn)

Fund size Management Fee during Mechanism for reduction post- Reduced rate post-Investment Carried Interest Fund Fund Type Vintage GP Region (USD mn) Investment Period investment period Period Basis Fund 21 Opportunistic 2006 250 - 499 Middle East 2.00% No change 2.00% Whole Fund Fund 22 Opportunistic 2006 250 - 499 US 2.00% Fund 23 Opportunistic 2006 250 - 499 US 1.50% Same rate, cost basis of unrealized portfolio 1.50% Whole Fund Fund 24 Opportunistic 2006 250 - 499 US 0.50% Fund 25 Opportunistic 2005 250 - 499 US Fund 26 Opportunistic 2005 250 - 499 US 1.50% No change Fund 27 Opportunistic 2005 500 - 999 Europe 2.00% Whole Fund Fund 28 Opportunistic 2006 500 - 999 US 0.50% Fund 29 Opportunistic 2007 500 - 999 US 1.50% Whole Fund Fund 30 Opportunistic 2006 500 - 999 Asia 2.00% Fund 31 Opportunistic 2005 500 - 999 US 1.50% Same rate, cost basis of unrealized portfolio 1.50% Deal by Deal Fund 32 Opportunistic 2006 500 - 999 US 1.50% Same rate, cost basis of unrealized portfolio 1.50% Fund 33 Opportunistic 2005 500 - 999 US 1.50% Same rate, cost basis of unrealized portfolio 1.50% Deal by Deal Fund 34 Opportunistic 2006 1000 + US 1.00% Fund 35 Opportunistic 2006 1000 + US Fund 36 Opportunistic 2005 1000 + US 1.50% Deal by Deal Fund 37 Value Added 2006 0 - 99 Middle East 2.00% Whole Fund Fund 38 Value Added 2006 100 - 249 Middle East 2.00% Fund 39 Value Added 2003 100 - 249 US 2.00% Whole Fund Fund 40 Value Added 2006 100 - 249 Europe No change Whole Fund

© 2007 Private Equity Intelligence Ltd 11 The 2007 Private Equity Real Estate Review actually being most likely to be in the top quartile. Fig. 55: Quartile Ranking by Fund Number The most experienced managers have a reduced 100% possibility of appearing in the bottom quartile, but are 90% 19% 28% 28% no more likely than less experienced firms to appear 80% Bottom Quartile in the top quartile. The relatively low levels of 70% 19% 31% correlation between manager experience and 60% 25% Third Quartile performance might provide an explanation as to the 50% Second Quartile success of first time fund managers in the 40% 23% 22% 23% fundraising market, where 28% of funds closed since 30% Top Quartile 2006 have been first time funds, making up 17% of 20% 30% 25% 27% the overall market in terms of aggregate 10% 0% commitments. Fund 1 Fund 2 Fund 3 and More

Relationship between Successor and Fig. 56: Relationship between Successor and Predecessor Fund Quartile Predecessor Fund 100% 6% 10% 90% Although the level of manager experience has 13% 28% 80% relatively little bearing on the relative performance of 33% Q4 Successor Fund 70% 60% funds, there is a strong correlation between the 32% 60% Q3 Successor Fund performance of different funds managed by the 34% 50% 17% Q2 Successor Fund same firms. 40% 30% 20% Q1 Successor Fund 48% 24% Fig. 56 shows the relationship between predecessor 20% 40% 10% and successor real estate funds managed by the 10% 14% 10% same managers. Fund managers of a top quartile 0% Q1 Predecessor Q2 Predecessor Q3 Predecessor Q4 Predecessor fund have a probability of 48% that their successor Fund Fund Fund Fund

e t r Fund Strategies n a c e h t m l Sector Preferences s a p a d d c c i d e l l o e i r n t l y r e l l s a i m e o u e i y i e H e e d y a s s r c t l v i o Geographic Preferences F n n i / s m t i d r l u m W u a a e s l l f u i a n H n t d A e a c U o f r e i a A e P o r - t t D r F e r a n i s t l h o - m l c d - p o e s i e d i o z p u s t i e h t e d o e d i e i i t o e z d l c a r r p u y m s t u s i r r s r n c l n i g x s t n u f a o e p n o o o d e i o e o u e a a e o f e e e u n Value of RE Last C C F M O S V A C H H I L L L M M M O R R S W N E R Firm Name Page Funds Fund Raised (mn) Raised Boulder Net Lease Funds 100 USD 2007 • • • • • Boutique Apartments 12 USD 2007 • • • BPG Properties 2,178 USD 2006 • • • • • • Bridge Investment Group 2007 • • • • • Broadreach Capital Partners 1,014 USD 2006 • • • • • • • • • Broadway Real Estate Partners 800 USD 2007 • • • Brockton Capital 150 GBP 2006 • • • Brookdale Group 665 USD 2004 • • • • • Brookfield Asset Management 840 USD 2006 • • • • • • • • Bryanston Realty Partners 2005 • • • Buchanan Street Advisors 1,290 USD 2006 • • • • • • • • • Cabot Properties 880 USD 2006 • • • Calare Properties 2007 • • • • • • Canyon-Johnson Urban Funds 872 USD 2005 • • • • • • • Capital Trust 1,470 USD 2003 • • Capitaland 1,625 USD 2007 • • • • • • • CapMan Real Estate 1,469 USD 2006 • • • • • • • • Capmark Financial Group 1,655 USD 2007 • • • • • • • • • • Capri Capital 589 USD 2007 • • • • • • • • • • • • Caribbean Property Group 500 USD 2005 • • • • • • Carlyle Group 7,242 USD 2006 • • • • • • • • • • • Carmel Partners 1,315 USD 2007 • • • • CarVal Investors 1,300 USD 2006 • • • • • Castle Rock Capital Management 66 USD 2007 • • CB Richard Ellis Investors 4,863 USD 2007 • • • • • • • • •

Paladin Realty Partners Established: 1995 Tel: +1 866 725 7348 10880 Wilshire Boulevard, Suite 1400, Los Angeles, CA 90024, US AUM (mn): 506 USD Paladin Realty Partners, formerly William E. Simon & Sons Realty, is an institutional investment manager Mr. James R. Worms CEO founded by seasoned real estate professionals in partnership with the former US Treasury Secretary, William E. Simon, and his family. In 2005 Paladin Realty had a change in its ownership and is now wholly Mr. John A. Gerson CFO owned by senior management. Mr. Fred Gortner VP Real Estate [email protected] Office Residential Retail Industrial Commercial Hotel Leisure Land Dev. All Opport. Value Add Core-Plus FofFs • • Distributed Rem. Value Benchmark Date Fund Vintage Status Size (mn) Called (%) Multiple (X) Net IRR (%) Quartile (%) (%) IRR (%) Reported William E Simon & Sons Realty Partners 2001 Closed 306 USD 97.6 45.9 74.9 1.21 3.8 22.5 4 31-Dec-06 Paladin Realty Latin America Investors 2004 Closed 200 USD 38.6

Palmer Capital Partners Established: 1992 www.palmercapital.co.uk Tel: +44(0) 207 409 5500 Time & Life Building, 1 Bruton Street, London W1J 6TL, UK AUM (mn): 914 USD Fax: +44(0) 207 409 5501 Palmer Capital Partner (PCP) is an UK property venture capital company, providing finance, management Mr. Christopher Digby-Bell CEO [email protected] and advisory services to property businesses. PCP regards the support it provides to the companies as its Mr. Crispin Auden Director [email protected] central function. This support covers a whole spectrum of advice and assistance, including presenting to vendors, structuring financial solutions, sourcing finance and assisting in all negotiations. As PCP has matured it has evolved into a more broadly based investment house and is now active in structuring and Mr. Alex Price Director [email protected] managing property joint ventures. Office Residential Retail Industrial Commercial Hotel Leisure Land Dev. All Opport. Value Add Core-Plus FofFs • • • • • • Distributed Rem. Value Benchmark Date Fund Vintage Status Size (mn) Called (%) Multiple (X) Net IRR (%) Quartile (%) (%) IRR (%) Reported Palmer Capital Development Fund 2004 Closed 110 GBP 100.0 14.2 118.2 1.32 18.5 18.3 2 30-Jun-07 Palmer Active Value Fund 2005 Closed 49 EUR 100.0 7.9 97.3 1.05 30-Jun-07 Palmer Active Value Fund II 2006 Closed 217 EUR 100.0 0.4 96.9 0.97 30-Jun-07 Palmer Capital Development Fund II 2006 Closed 173 GBP 55.0 2.4 97.2 1.00 30-Jun-07

Parmenter Realty Partners Established: 1989 www.theparmentercompany.com Tel: +1 305 379 7500 1111 Brickell Avenue, Suite 2910, Miami, FL 33131, US AUM (mn): 289 USD [email protected] Fax: +1 305 379 0009 Parmenter Realty Partners is a fully integrated real estate investment management company. It is focused Mr. Steve Bronner Managing Principal [email protected] on making value-orientated investments in existing Class “A” office properties and Class “B” properties that Mr. Andrew Weiss Managing Principal [email protected] can be enhanced to investment grade status. It operates in established commercial centres in the southern region of the US. Mr. Darryl W. Parmenter President & CEO [email protected]

Office Residential Retail Industrial Commercial Hotel Leisure Land Dev. All Opport. Value Add Core-Plus FofFs • • Distributed Rem. Value Benchmark Date Fund Vintage Status Size (mn) Called (%) Multiple (X) Net IRR (%) Quartile (%) (%) IRR (%) Reported Parmenter Realty Fund I 1999 Closed 39 USD 100.0 127.0 151.0 2.78 19.0 13.5 1 31-Aug-07 Parmenter Realty Fund II 2002 Closed 88 USD 80.0 101.0 85.0 1.86 32.0 25.3 1 31-Aug-07 Parmenter Realty Fund III 2006 Closed 250 USD 42.0 0.3 60.0 0.60 31-Aug-07

Patron Capital Limited Established: 1999 www.patroncapital.com Tel: +44 (0) 20 7629 9417 Fax: +44 (0) 20 7629 16 Berkeley Street, London W1J 8DZ, UK AUM (mn): 1,350 EUR [email protected] 9418 Patron Capital Limited (Patron) is an investor in property, property companies and financial institutions. Mr. Keith Breslauer MD [email protected] The firm acts as the originator and investment advisor for Patron Capital Partners as well as other clients Mr. Jason Meads MD [email protected] who are seeking to invest in property in Europe. Mr. Johannes Kalker VP [email protected] Office Residential Retail Industrial Commercial Hotel Leisure Land Dev. All Opport. Value Add Core-Plus FofFs • Distributed Rem. Value Benchmark Date Fund Vintage Status Size (mn) Called (%) Multiple (X) Net IRR (%) Quartile (%) (%) IRR (%) Reported Patron Capital Fund I 2001 Closed 150 EUR 100.0 151.0 22.7 30-Jun-07 Patron Capital Fund II 2003 Closed 303 EUR 100.0 58.0 19.4 30-Jun-07 Patron Capital Partners III 2006 Closed 895 EUR 10.0 30-Jun-07

Penwood Real Estate Investment Management Established: 2003 One Financial Plaza, 12th Floor, Hartford, CT 06103, US Penwood is a Registered Investment Adviser formed in 2003 and based in Hartford, CT. Penwood is an Mr. Richard Chase Partner entrepreneurial real estate investment advisory group focused on the institutional investor market. Mr. John Hurley Penwood provides a national real estate perspective, disciplined management process and experienced Partner investment management. Penwood is currently focused on value-added, development, redevelopment and rehabilitation of industrial investments in major seaport markets. Office Residential Retail Industrial Commercial Hotel Leisure Land Dev. All Opport. Value Add Core-Plus FofFs

Distributed Rem. Value Benchmark Date Fund Vintage Status Size (mn) Called (%) Multiple (X) Net IRR (%) Quartile (%) (%) IRR (%) Reported Penwood Select Industrial Partners II 2007 Raising

University of Arizona Foundation which issued an Fig. 60: Long-term Real Estate Target Allocation Intentions of LPs RFP for private equity real estate funds in the first half of 2007. It has decided to make an initial allocation to the asset class of $10 million. 21%

1% Another investor that made its first moves towards Increasing gaining exposure to private equity real estate in 2007 was the Swiss corporate pension fund, Schindler Decreasing Pensionskasse. It introduced a target allocation of 78% 3% of its CHF1.3 billion assets under management No Change to private equity real estate. It made its first commitments to an opportunistic fund and a real estate fund of funds. It will also consider value- added funds.

AP-Fonden 3, the Swedish public pension fund, pension fund will invest approximately €250 million Make up of Real Estate LP Universe by Type made the decision at the end of 2006 to commence in around 10 Asia-focused funds over a four year investment in private equity real estate. Its initial period. The European mandate was of a similar size. Like private equity funds of all types, private equity exposure was gained through awarding two real estate funds attract interest from a wide variety mandates to real estate fund of funds manager, New investors like AP-Fonden 3 and Schindler of institutional investors. Fig. 61 shows the Aberdeen Property Investors. The first was made in Pensionskasse are helping to fuel the massive breakdown of the types of LPs in real estate funds by December 2006 and was focused on providing the growth that private equity real estate is currently the number of separate firms. Public pension funds Swedish pension fund with access to European real experiencing and such support, as has been seen and superannuation schemes account for over a estate funds. In April 2007, it awarded a second from both existing and new investors, provides third of all LPs in real estate funds and are therefore mandate to Aberdeen Property Investors to assist it strong evidence towards the continuing expansion of by far the largest single group of institutional in building an Asian property funds portfolio. The the industry. investors in the asset class. Not only is this investor

Arizona State Retirement System Public Pension Fund ATP Real Estate Asset Manager 3300 North Central Avenue Tel: +1 602 240 2000 Gothersgade 49 Tel: +45 (0)3 336 6161 Phoenix Fax: +1 602 240 2090 Copenhagen Fax: +45 (0)3 336 6162 AZ 85012-0250 Web: www.asrs.state.az.us DK-1123 Web: www.atp-ejendomme.dk US Denmark Email: [email protected] In March 2006 the Arizona State Retirement System hired the Townsend Group as its real estate ATP views private real estate funds as a core part of its investment strategy. As of Q2 2007 the firm consultant. They helped the ASRS develop a new real estate program, known as the ASRS Real had EUR 1.8 billion invested in real estate with 70% invested in core, 20% invested in value added and Estate Implementation Plan. This plan mapped out the real estate program for 2006 to Q1 2007. This 10% invested in opportunistic funds. It is planning to increase its allocation to real estate to EUR 2.2 program involved commitments to public and private real estate funds both domestic and U.S. billion as it looks to expand its portfolio. ATP prefers to invest in US and European funds but it has a Between September 2005 and September 2006 the pension fund awarded 10 real estate mandates small allocation to Asia. It has not yet made any commitments to any Asian focused funds but plans to with commitments totalling approximately USD 411 million. As of Q3 2007, it was continuing to invest in over the next twelve months. During this period the firm plans to invest in 5 – 10 funds committing up private real estate funds and had recently committed to global opportunistic funds managed by RREEF to EUR 500 million. It sees the real estate market as being very tough, viewing the market as being Alternative Investments and Westbrook Partners. over priced in some areas and that fund managers are setting very aggressive prices. Total Assets (mn): 25,000 USD Total Assets (mn): 1,800 EUR Committed to Real Estate (mn): Committed to Real Estate (mn): Target for Real Estate (mn): Target for Real Estate (mn): 2,200 EUR Preferences: Preferences: Opportunistic Value added Core-Plus Fund of Fs Secondaries Mezzanine Opportunistic Value added Core-Plus Fund of Fs Secondaries Mezzanine • • • • N. America Europe Asia Global First Time Funds N. America Europe Asia Global First Time Funds • • • • • Sample Fund Investments Vintage Fund Size (mn) Fund Focus Commitment (mn) Sample Fund Investments Vintage Fund Size (mn) Fund Focus Commitment (mn) UBS European Value Added Westbrook Real Estate Fund VII 2007 *1250 USD US 44 2006 373 EUR Europe Fund Five Arrows Realty Securities 2006 162 USD US 75 UBS European Value Added Fund IV 2006 373 EUR Europe 60 Fund DB Global Opportunity Fund II 2006 1600 USD US 50 Tishman Speyer European Real 2006 1350 EUR Europe 75 Dune Real Estate Fund 2005 727 USD US 50 Estate Venture VI Tishman Speyer/Citigroup Real Tishman Speyer European Real 2004 1100 USD US 25 2006 1350 EUR Europe Estate Venture VI Estate Venture VI Contact Name Position Email LaSalle Euro Growth II 2006 335 EUR Europe 50 Anthony Guarino Deputy Director, COO LaSalle Euro Growth II 2006 335 EUR Europe Gary Dokes Chief Investment Officer Heitman European Property 2005 350 EUR Europe 40 Partners III Paul Matson Executive Director Heitman European Property 2005 350 EUR Europe Partners III

European Bank for Reconstruction F.B. Heron Foundation Family Office / Foundation Bank and Development 100 Broadway 17th Floor Tel: +1 212 404 1800 One Exchange Square Tel: +44 (0)20 7338 6000 New York Fax: +1 212 404 1805 London Fax: +44 (0)20 7338 6100 NY 10005 Web: www.heronfdn.org EC2A 2JN Web: www.ebrd.com US Email: [email protected] UK Email: [email protected] F.B. Heron Foundation will invest in real estate funds that are compatible with the foundation’s goal of assisting growth in low-income communities. The foundation has a preference for investing in funds European Bank for Reconstruction and Development (EBRD) was established as a tool for helping to that will provide affordable housing for low-income families in the U.S or participate in urban build market economies in Eastern Europe and Central Asia. It has a defined investment philosophy, regeneration projects. As such it is very selective in the funds that it will invest in and will not consider which involves investing in those countries affected by the poor infrastructure of communism that any international funds. The foundation is very keen to invest in further real estate funds as it sees subsequently need help in accelerating economic growth. It is very active in investing in private real them as an integral part of its investment portfolio and also in implementing the foundation’s goals. estate related funds but will only do so if the fund will invest in such areas. Examples of the types of investments that the EBRD makes include the Marbleton Property Fund. This fund is a value added Total Assets (mn): 307 USD fund that will invest in property developments and real estate assets in Moscow, St. Petersburg and Committed to Real Estate (mn): Kiev, other neighbouring regions will also be considered. It is a diversified fund that will invest in the main four property types. Another example is the Global Emerging Property Fund, a fund that is Target for Real Estate (mn): investing in developmental projects in Romania, Bulgaria and Serbia. As of Q3 2007, EBRD was Preferences: continuing to make investments in the asset class, but only in funds that adhere to its strict investment guidelines. Opportunistic Value added Core-Plus Fund of Fs Secondaries Mezzanine Total Assets (mn): 22,364 EUR Committed to Real Estate (mn): N. America Europe Asia Global First Time Funds Target for Real Estate (mn): • Preferences: Sample Fund Investments Vintage Fund Size (mn) Fund Focus Commitment (mn) Opportunistic Value added Core-Plus Fund of Fs Secondaries Mezzanine UrbanAmerica II 2005 400 USD US • • Canyon-Johnson Urban Fund II 2005 600 USD US Genesis Workforce Housing N. America Europe Asia Global First Time Funds 2004 103 USD US Fund • • Canyon-Johnson Urban Fund 2002 272 USD US Sample Fund Investments Vintage Fund Size (mn) Fund Focus Commitment (mn) Bay Area Smart Growth Fund I 2002 66 USD US Marbleton Property Fund 2006 320 USD Europe UrbanAmerica I 2001 120 USD US Global Emerging Property Fund 2005 150 USD Europe Contact Name Position Email Contact Name Position Email Karen Asakawa Investment Assistant [email protected] Henry Potter Senior Banker [email protected] Kathleen Starr Investment Officer [email protected] Sylvia Gansser-Potts Senior Banker [email protected] Luther Ragin Vice President, Investments [email protected] Patricia J. Kozu VP-Finance and Admin. [email protected]

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