US Special Situations & Distressed Assets Fund

2019.05.27 Confidential Executive Summary

Who is Axe Capital Group? Special Situations & Distressed Assets • Establishing a platform for special situations and Axe Capital Group is a platform for non-US distressed assets funds investors providing access to US real • Raising GP capital of $65M for two funds with $520M estate. Since 2015 ACG has invested over total capital: $75M equity on behalf of investors in US • Fund I: $32.5M GP and $227.5M LP real estate with a $500M+ gross • Fund II: $32.5M GP and $227.5M LP development cost. Axe has a history of • Fund II launched since Fund I is 70% invested partnerships with well-established global institutions: • $50M of GP capital will be provided 50/50% by Hunt and Koch Family Partners • Foxtrot is offered to participate into $14.25M GP capital ($750k provides Axe) Tax & Legal Advisors • Majority of LP Capital for Fund I will be provided by Koch Family • Investment period for each Fund: 15 months Financing Partners • Target Net IRR: LP 16%+, GP 19%+, Foxtrot 19%+ • Top-tier US investment team: Brokers & Market Advisors • 15 years average real estate and private equity experience for team members, working together for 10 years Technical Consultants House Bank • Track record of $1.4Bn equity under management with average IRR 17%

Confidential 2 About the Firm

Axe Capital Group is a real estate investment platform with a proven ability to deploy capital across a range of US submarkets on behalf of our non-US corporate, family office, institutional investors and hedge funds investors.

ACG co-invests on all investments because our philosophy is that client-manager interests should always be aligned. Investment strategies ranging from core and value-add acquisitions to opportunistic joint venture developments in residential and commercial sectors

Axe Capital Group provides a turnkey solution for US investments by non-US investors and organizes all tax and legal aspects of investments structuring debt/equity capitalization, banking relations, asset acquisition, investment management, fiscal compliance and FIRPTA reporting by US-based accountants, annual audits and regular NAV calculations, sale and exit on investment.

Confidential 3 Leadership

Bogdan Gubsky Charles Bergin Hans Karner Colin Breeze Chairman Investments Development Investor Relations

Bogdan Gubsky is a Ukrainian Charles is an Irish investment Hailing from Austria, Hans Colin has specialized in alternative investor with a global asset portfolio professional with 22 years of brings a 30-year track record in investments for two decades. He has across a range of sectors, including investment banking and real project management from invested in and designed different several recent investments in the estate private equity experience Central Europe and Saudi holding structures for venture capital, US. During the 1990’s, while a in Europe and the United States. Arabia/UAE. He is experienced high yield debt, private equity, professor of International After studying to be a lawyer in in industrial, hospitality, and disruptive technologies, and real Economics, he built and sold Ireland, Charles worked in mixed-use project estate. He also advises fund sponsors several businesses, including a Central Europe in both management. Hans led on investment and transaction-specific major agro-business and energy investment banking and PERE projects of over 5 million sqft. tax and structuring, risk analysis, business. After selling these roles including Head of and has worked as the head of securities law compliance, corporate business interests, he took a pause Corporate Finance at development at major governance and fiduciary from business and participated in a Raiffeisenbank in Prague, and as multinationals and financial responsibilities. Colin previously variety non-business engagements. Managing Partner at two real institutions including Deloitte served as Managing Director at Excel In 2012, he saw opportunities in estate investment funds. Charles (Saudi/UAE), Raiffeisen Realty Holdings, a private US-based real estate and decided to fully has extensive cross-border Evolution, and UNIQA. Hans real estate investor whose holdings focus on this and thereby he investment experience, having was responsible for $1bn included multifamily, office, industrial, returned to business. He worked on over $2.5 billion of projects working with retail and logistics assets both in the subsequently established a platform commercial, retail and residential developers on delivering US and internationally. In addition, for investment in US real estate. projects in Central & Eastern flagship projects including Colin has established, managed Capital was successfully raised and Europe and in the US. Charles is office developments in Balkan and/or advised multiple alternative invested in single-asset investment a member of the Royal Institute countries. Hans received BA in investment sponsors across the deals, and he is presently raising of Chartered Surveyors, holds Building Technology from leading offshore jurisdictions, such as capital for diverse US real estate certificates from the ACCA. University Pinkafeld Austria. Guernsey, BVI, Jersey, United investments. Bogdan received BA & Charles earned a BA in Kingdom, Cayman Islands, and the PhD in Mathematics in Kiev Economics and English United States. After graduating from National University and Doctor of Literature from University The University of Chicago Law Economic in Kiev National College Dublin. School, Colin practiced with Economic University Cadwalader in New York and Wilson Sonsini Goodrich & Rosati in the Silicon Valley.

Confidential 4 Leadership Track Record and Vision

• Most recently, ACG has raised $75M from non-US corporate and institutional investors • ACG successfully committed this capital over 18 months to three ground-up residential developments with gross development cost of $500M+ and is currently managing these investments • After deploying this capital, ACG decided to establish this platform for special situations and distressed assets funds, partnering with a top-tier US investment team and is raising additional $65M GP capital to establish two funds of $520M total capital

Confidential 5 Investment Strategy

Special Situations & Distressed Assets

Seeks opportunities created by inefficient capital structures, event-driven distress, and asset-level difficulties

• Creates debt transaction structures that offer downside protection, mitigate risk and align the interests of participating parties

• Evaluates investments based on the values of their underlying assets and the risks associated with correcting situations, in order to unlock values

• Designed to deliver opportunities for non-US investors

Targets $520M equity: • Fund I: $32.5M GP and $227.5M LP 30M Equity • GP Capital: $25M Hunt & Koch, $7.125M Foxtrot, $0.375 Axe • Fund II: $32.5M GP and $227.5M LP Average Investment Size • GP Capital: $25M Hunt & Koch, $7.125M Foxtrot, $0.375 Axe Target net IRR: Leverage: 3-5 Years • GP Investors: 19%+ Equity – up to 75% Holding Period • LP Investors: 16%+ Debt – up to 90% • Foxtrot: 19%+ Investment period for each Fund: 15 months

Confidential 6 The GP Investment Team

James Glasgow Almond Nickerson Raymond Yen Managing Principal Sr. Managing Director Managing Director James brings over 30 years of US Almond oversees investments at Raymond heads the investments at real estate and private equity BLT. Previously, he worked at FMCP BLT. He previously worked at FMCP experience to the team. He serves on distressed debt acquisitions, on acquisition and the asset as President of the $7B Building and rescue capital and development of management of commercial real Land Technology (BLT) investment assets, and also worked at Citigroup estate debt and equity, and brings fund, and previously served as Property Investors, investing in high experience from ING Capital, ING partner and co-portfolio manager yield CMBS and mezzanine debt. Realty Partners, Deloitte & Touché with Five Mile Capital. James also and Citicorp North America. worked at UBS, PaineWebber, Travelers, ING Capital and Chemical Bank. Peter Chong Scott Leitman Christopher Sadick Managing Director Managing Director Vice President At BLT, Peter oversees acquisitions, Scott oversees all aspects of Christopher oversees acquisitions, asset management, financing, and contract finance, including asset asset management, and the modeling dispositions. He previously worked disposition, financing, and litigation of prospective funds. He previously at FMCP, Morgan Stanley, Barclays strategy. He previously worked at worked at FMCP in Commercial Real and Citigroup Property Investors. He FMCP Special Situations, Salomon Estate, and Platinum Grove Asset also brings experience from his time Smith Barney, PaineWebber and Management, a multi-strategy hedge at Fitch Ratings, where he rated Kidder, and Peabody. fund where he focused on fund CMBS transactions. valuation and reporting. Christopher began his career in the Audit practice at KPMG.

Confidential 7 History of Success

• James Glasgow – successful track record managing two funds FMCPII and FMCIO with $1.4Bn AUM with average 10-year IRR: 17% (audited). • Key team members of FMCP have 10-years of experience together. Average team member experience – over 15 years. Track record of realized deals for over $6Bn . • Ready-to-go project pipeline. Access to CMBS market, access to global debt and equity financing. • Extensive background as qualified special agent for serving distressed CMBS debts (CMBS special servicer). • Active asset management. Proven ability to develop detailed asset business plan and manage its execution. • Trusted relationships with ex-investors, investment and commercial banks, non-bank lending institution, brokers, consultants, controllers, financial regulators and rating agencies.

Past Experience of Investment Team

Confidential 8 GP Team Track Record in FMCPII & FMCIO

Confidential 9 FMCPII & FMCIO Investors and Performance

FMCP II $M Domestic LP: Harvard Management Private Equity Corp 200 Teacher Retirement System of Texas 200 The Board of Trustees of The Leland Stanford Jr. University 100 Common Pension Fund E (New Jersey) 100 Berkley Insurance Company (W.R. Berkley) 38 Admiral Insurance Company (W.R. Berkley) 38 Citigroup Pension Plan 75 American General Life Insurance Co. (AIG) 75 Makena Capital Holdings B, L.P. 60 JP Morgan Chase Bank, N.A. as Trustee of the JPMorgan Chase Retirement Plan 50 Metropolitan Life Insurance Company 50 The Board of Regents of The University of Texas System (UTIMCO) 50 Arizona State Retirement System 50

Offshore LP: Varma Mutual Pension Insurance Company 50 Zamrud Corporation 20 Russell Global Property Fund I c/o Russell Real Estate Advisors Inc. 20 Citco Global Custody (NA) N.V. Ref FCMP II TSOF Segregated Portfolio (Treesdale) 20 Citco Global Custody (NA) N.V. Ref FCMP II TFIF Segregated Portfolio (Treesdale) 27

FMCIO $M Chengdong Investment Corp. (CIC) 425

Total invested equity capital 1,647

Confidential 10 Investment Criteria

Criteria Description

Risk/Return Source Market risk and asset-specific risk

Target Markets Primary or secondary agglomerations in the US

Types of Real Estate Office, retail, hotels and industrial

Structure Equity, preferred equity and debt

5-6% at asset acquisition, 8-10% after stabilization, and an average of over 10% after portfolio Current Cash-on- Cash Yield stabilization

20% of commitments in any single investment Limitations 30% in a single metropolitan area

Independent fund-administrator (SS&C), auditor (NYBKW) and appraiser (Cushman & Funds Infrastructure and Quality Wakefield) of Operations Use of private equity best practice in deals structuring, compliance, corporate management and investor relations

Confidential 11 The Opportunity

Special Situations & Distressed Assets • Non-US investors gain exposure to one of the most robust world real estate markets, through partnerships with experienced professionals possessing the necessary expertise to consistently outperform • The non-correlated US real estate market offers opportunities unavailable through equities and bonds • Investors may benefit from superior returns, downside protection, and risk mitigation, through due diligence practices and identification of investment opportunities in the US real estate market • Rising interest rates will likely to put pressure on mismanaged and distressed real estate assets, equities and bond markets—creating a unique opportunity

General Partners May Experience • Higher return potential than that offered to Limited Partners • An ability to take more active roles in the investment process • Exclusivity, in that only 3-4 General Partners

Confidential 12 Fund Structure

GP Investors (Foxtrot $14.25M, Axe $0.75M, LP Investors Hunt and Koch family $50M) $455M

Capital 12.5% Capital 87.5% and Profit Equity and Profit Equity

Carry on LP capital Funds Operational Management Company (GP) Management Fee Project Company Expenses Acquisition Fee Debt $1.2Bn

Investments Dividends 1. The platform consists of Management company (GP) and two Funds of $520M

2. The second fund will be launched since the first fund invested above 70% RE Property 3. Equity Capital: • GP investors: $65M (Foxtrot $14.25M, Axe $0.75M, Hunt and Koch family $50M) RE Portfolio AUM $1.7Bn • LP investors: $455M will be raised by Management Team on market

1. GP will syndicate deals, raising debt with 60-70% leverage

2. Fund investments will be made on a deal-by-deal basis

3. Target return for LP investors: 16% Net IRR

4. Target return for AXE GP investors: Net IRR 19%+

Confidential 13 Fund Financing Terms

Terms Description

• Fund I – $260M total equity Investment Funds • Fund II – $260M total equity

• Fund I: $32.5M GP and $227.5M LP Capital Structure • Fund II: $32.5M GP and $227.5M LP • GP Capital: $50M will be provided by Hunt and Koch family, $14.25M Foxtrot, $0.75M Axe

• Management fee – 1.5% of GP and LP equity invested GP Fees • Acquisition fee – 0.25% of GP and LP equity • Carry - 20% profit with catch-up, above 8% preferred IRR for LP investors only LP Capital: 1. Return of capital to LP investors GP Capital: Profit Distribution Structure 2. 8% IRR to investors 1. Return of capital to GP investors 3. 20% catch-up to GP 2. 100% of profit after management and acquisition 4. 20 % to GP and 80% to investors fee to GP investors

Timing Fund II will be launched after the Fund I is 70% invested

Operational Capital TBD

GP Investors $65M: Funding Requirements • Investor provides $15M • $50M will be provided by Hunt and Koch family

Confidential 14 GP Investor – Hunt Family

Hunt Family Overview . Family Founder - Haroldson Lafayette "H. L." Hunt Jr. (1889 –1974), known throughout his life as H. L. Hunt, was a Texas oil tycoon and conservative Republican political activist. He acquired East Texas Oil Field, one of the world's largest oil deposits. From it and his other acquisitions, he accrued a fortune that was among the world's largest at the time of his death. In 1957 Fortune estimated that Hunt had a fortune of between U.S. $400 million and $700 million and was one of the eight richest people in the United States. . In 2016 Forbes ranked Hunt family at No. 16 in "America's 25 Richest Families 2016" and valued the family at around $13.7 billion. . Hunt's heirs number 33 in all, including 15 children, chief among them are: • Ray Lee Hunt, who oversees Hunt Oil (5.4Bn net worth as of 2018) – proposed investor • W. Herbert Hunt, who previously owned Petro-Hunt LLC, an oil and gas firm that sold to Halcon Resources • Caroline Hunt, who founded and later sold Rosewood Hotels & Resorts • Lamar Hunt, a Kansas City sports magnate who died in 2006 • Hunt Consolidated, Inc. is the flagship entity of the entire Hunt family of companies, a privately owned group of entities based in Dallas, Texas. The areas of activity of the different Hunt companies include oil and gas exploration and production, refining, LNG (liquefied natural gas), power, real estate, investments, ranching and infrastructure. Hunt employs over 1,700 direct employees nationwide and over 6,000 employees including affiliates.

Confidential 15 GP and LP investor - Koch Family

Koch Family and Business Overview . Family founder - Fred Chase Koch (1900-1967) was an American chemical engineer and entrepreneur who founded the oil refinery firm that later became Koch Industries, a privately held company which, under the principal ownership and leadership of Koch's sons, Charles and David, is listed by Forbes, as the second-largest privately held company in the United States. . The Koch Family is the second wealthiest family in US according to America’s Richest Families Forbes Ranking 2016, combined net worth of Charles and David is $107 billion according to The 2018 Forbes 400, adding up their individual net worths of $53.5 billion each. Much of their wealth comes from Koch Industries, which has colossal influence across a range of American markets. . The company’s biggest businesses include: • Koch Ag & Energy Solutions, which makes and supplies fertilizers, energy, natural gas and methanol; • Flint Hills Resources, which operates oil refineries in Minnesota and Texas as well as ethanol plants in Georgia, Iowa and Nebraska; • Molex, which develops electronic interconnect systems for a variety of markets; • Georgia-Pacific, which consists of plywood, lumber, and household brands like Brawny and Dixie • INVISTA, which produces chemical intermediates, polymers and fibers • Guardian Industries, which makes high-end glass and building materials . Koch Industries employs more than 120,000 people across 60 countries, with about 65,000 people in the U.S. Koch is headquartered in Wichita, Kan., the company’s and the brothers’ hometown.

Confidential 16 Contact Us Address: Revoluční 724/7, 4th floor, office 16 110 00, Praha 1, Czech Republic

Phone: +7 (495) 150-93-00

Email: [email protected]