GP Multifamily Co-Investment2019.06.01

Confidential

Executive Summary

Who is Axe Capital Group?

Axe Capital Group is a platform for non-US

investors providing access to US real estate.

Since 2015 ACG has invested over $75M

equity on behalf of investors in US real estate

with a $600M+ gross development cost. Axe

has a history of partnerships with well-

established global institutions:

Value-add Multifamily Platform• Establishing a platform for Value-add and Ground-

up multifamily projects

• Raising $20M equity for AXE GP Multifamily Fund

• Investor is offered to participate $5-10M in AXE GP

Multifamily Fund capital with no promote being

charged by Fund Manager

• Top-tier US investment team – DVO Real Estate:

• 15 years average real estate and private

equity experience for team members with

$4.6Bn closed deal capitalization

• Track record of $1.5Bn+ of invested equity,

more than 18,000 multifamily units with

average deal level IRR 38.3% and 2.24x

multiple for realized investments

• Invests only in GP capital to maximize total returns:

AXE GP Multifamily Fund and DVO Real Estate

(DVO GP Co-Investment Fund) provides 30-80% of

total GP capital and local GP Partner provides

remaining part of GP capital

• Investment period: 24 months

• AXE GP Multifamily Fund target return:

• Net IRR to investors 17.6%; 1.8x Multiple;

Average cash yield 6-8%

Confidential 2

Partners

Tax & Legal Advisors

Financing Partners

Brokers & Market Advisors

Technical Consultants House Bank

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 GubskyChairman

Bogdan Gubsky is a Ukrainian

investor with a global asset portfolio

across a range of sectors, including

several recent investments in the

US. During the 1990’s, while a

professor of International

Economics, he built and sold

several businesses, including a

major agro-business and energy

business. After selling these

business interests, he took a pause

from business and participated in a

variety non-business engagements.

In 2012, he saw opportunities in

real estate and decided to fully

focus on this and thereby he

returned to business. He

subsequently established a platform

for investment in US real estate.

Capital was successfully raised and

invested in single-asset investment

deals, and he is presently raising

capital for diverse US real estate

investments. Bogdan received BA &

PhD in Mathematics in Kiev

National University and Doctor of

Economic in Kiev National

Economic University

Charles BerginInvestments

Charles is an Irish investment

professional with 22 years of

investment banking and real

estate private equity experience

in Europe and the United States.

After studying to be a lawyer in

Ireland, Charles worked in

Central Europe in both

investment banking and PERE

roles including Head of

Corporate Finance at

Raiffeisenbank in Prague, and as

Managing Partner at two real

estate investment funds. Charles

has extensive cross-border

investment experience, having

worked on over $2.5 billion of

commercial, retail and residential

projects in Central & Eastern

Europe and in the US. Charles is

a member of the Royal Institute

of Chartered Surveyors, holds

certificates from the ACCA.

Charles earned a BA in

Economics and English

Literature from University

College Dublin.

Confidential 4

Hans KarnerDevelopment

Hailing from Austria, Hans

brings a 30-year track record in

project management from

Central Europe and Saudi

Arabia/UAE. He is experienced

in industrial, hospitality, and

mixed-use project

management. Hans led

projects of over 5 million sqft.

and has worked as the head of

development at major

multinationals and financial

institutions including Deloitte

(Saudi/UAE), Raiffeisen

Evolution, and UNIQA. Hans

was responsible for $1bn

projects working with

developers on delivering

flagship projects including

office developments in Balkan

countries. Hans received BA in

Building Technology from

University Pinkafeld Austria.

Colin BreezeInvestor Relations

Colin has specialized in alternative

investments for two decades. He has

invested in and designed different

holding structures for venture capital,

high yield debt, private equity,

disruptive technologies, and real

estate. He also advises fund sponsors

on investment and transaction-specific

tax and structuring, risk analysis,

securities law compliance, corporate

governance and fiduciary

responsibilities. Colin previously

served as Managing Director at Excel

Realty Holdings, a private US-based

real estate investor whose holdings

included multifamily, office, industrial,

retail and logistics assets both in the

US and internationally. In addition,

Colin has established, managed

and/or advised multiple alternative

investment sponsors across the

leading offshore jurisdictions, such as

Guernsey, BVI, Jersey, United

Kingdom, Cayman Islands, and the

United States. After graduating from

The University of Chicago Law

School, Colin practiced with

Cadwalader in New York and Wilson

Sonsini Goodrich & Rosati in the

Silicon Valley.

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 $600M+.

• After deploying this capital, ACG decided

to establish the platform for multifamily

value-add assets, partnering with a top-tier

US investment team and is raising $20M

capital for AXE GP Multifamily Fund.

Confidential 5

Investment Strategy

Balance High-yielding Development Deals with Cash-flowing Value-add Investments

• 50/50 allocation to existing property / development

• Focus on regions with strong and diverse job markets, favorable demographic trends featuring a

growing population of renters, and an undersupply of rental product with high barriers to entry

• Invests only in GP capital to maximize total returns, AXE GP Multifamily Fund and DVO GP Co-

Investment Fund provides 30-80% of total GP capital and local GP Partner provides remaining part of

GP equity.

• Co-invests with best in class local and regionally focused Partners with proven track records.

• Value-add deals: invest primarily in Class B/C assets (renter-by-necessity) in Class B/B+ locations,

where a value-add strategy yields 15-20%+ rent increases

• Development: invest in projects whose location, design, or amenities provide a competitive advantage

over competing assets within undersupplied or high growth submarkets

Confidential 6

Current return: 7-9% cash on cash

Fund term: 5+2 years prolongation

Holding period

Average equity: $2-7M

Investment period: 18 months

AXE GP Multifamily Fund Details

Capital stack (GP Equity)

Axe GP Multifamily Fund &

DVO GP Co-Investment Fund: 30-80%

Local GP Partner: 70-20%

Target Returns to Investors:

Net IRR: 17.6%; 1.8x Multiple

Average cash-on-cash: 6-8%

$1-3M

GP EquityAverage Investment Size

3-5 YearsHolding Period

Leverage:

Up to 75% at 1M Libor + 2%

without amortization

Investment period:

24 months

Investment Criteria

Criteria Description

Risk/Return Source Market risk and asset-specific risk

Target MarketsBoston, New York, Washington, Chicago, Austin, Denver, Salt Lake City, Northern & Sothern

California, Southern Florida, Phoenix, Dallas, Charlotte, Raleigh, Nashville

Types of Real Estate

1) Value-add assets:

• Multifamily with value creation potential

• Seek an untrended stabilized return on cost 125-150 bps greater than market cap rates

• Opportunity for repositioning and rebranding

• NOI increase potential by 20%+

2) Ground-up assets:

• Multifamily development in high growing target submarkets

• Seek a stabilized return on cost 150-200 bps greater than market cap rates for

comparable assets, with an all-in basis 15%+ below the projected stabilized value

Average equity deal size $1-3M total GP equity

Value-Add Target Returns Net IRR to Axe GP Multifamily Fund 15-18%, Multiple 1.7x, 6-8% cash-on-cash yield

Development Target Returns Net IRR to Axe GP Multifamily Fund 20%+, Multiple 2.0x

Leverage Up to 75% (65% average)

Confidential 7

DVO Real Estate Investment Team

David ValgerPresident and Founder

• 17+ years of investment experience. Closed more than

100 deals for total amount of $6Bn.

• Before founding DVO Real Estate was a partner in RCG

Longview Debt Funds responsible for mezzanine and

preferred equity structuring for more than 25 thousand

multifamily units.

• Pioneered and led exclusive FNMA mezzanine investment

programs (DUS Plus™ & CIMOD). Holds key access to

lenders, intermediaries, originators and local partners.

• Education: M.B.A. Real Estate & Entrepreneurial

Management at the Wharton School, University of

Pennsylvania, B.A. from Binghamton University

• David is Member of the President’s Advisory Council of

UJA/Federation of New York

Ryan ShoreVice President, Acquisitions

• 10+ years of investment experience, closed in excess of

$1Bn+ deals, transactional experience in 15+ states

• Before DVO Real Estate was responsible for $500M real

estate portfolio while at Bank of America, restructured

over $1billion in real estate debt and underperforming

assets, created new debt portfolio of $140M.

• Education: M.S. Real Estate Development from

Columbia University; B.A. in finance from Boston

University

Confidential 8

Nicholas NesiChief Financial Officer

• 25+ years of experience in private equity finance, audit and

taxation.

• Before DVO Nesi was a tax partner with BDO,USA, serving

a broad range of industries including real estate and

private equity.

• He is a past chairman of the NYSSCPA’s Multi-State Tax

Committee, as well as a member of the AICPA’s State and

Local Tax Committee.

• Education: J.D. New England School of Law; L.L.M.in Tax

and B.A. New York University

Michael SorochinskyPrincipal

• 17+ years of experience in multifamily operations,

investments and development, 150+ real estate

transactions, 9000+ apartments acquired and/or developed

on total amount above $5Bn

• Founder and Chief Executive Officer of Cypress Equity

Investments (CEI), a strategic partner of DVO Real Estate

• Prior to 2001, Michael practiced law at two international law

firms - Perkins Coie and Milbank Tweed – representing

creditors in distressed real estate debt and equity

reorganizations.

• Education: Michael received his JD from the UCLA School

of Law.

History of Success

• DVO Real Estate – an opportunity manager in multifamily real estate investments within US.

Located in New York City.

• Led by industry veterans with 100+ years of collective experience investing $600+ million of

preferred equity and mezzanine debt in commercial real estate, including 30,000+ apartments,

transactions totaling over $4.6 billion in deal capitalizations.

• Key team members working together more than 7 years.

• To date, the principals have invested in the acquisition or development of more than 18,000

multifamily units ($1.5Bn equity invested). Realized investments have generated an average

38.3% deal level IRR and 2.24x cash flow multiple.

• Total 29.0% deal level IRR including unrealized investments, significantly outperforming

projected pro-forma returns.

• Deep relationship with Fannie Mae and Freddie Mac which gives access to best financing

options for multifamily assets.

• Extensive national relationships with lenders, intermediaries and local partners within the

multifamily sector resulting from leading FNMA’s DUS Plus™ and CIMOD programs.

• Ready to go pipeline, unique access to consistent, off-market investment opportunities as well

as ‘first’ and ‘last’ looks.

Confidential 9

Why Multifamily?

Historically higher returns with a lower risk profile than other asset classes

• Current income component with potential upside from appreciation

• Hedge inflation via ability to raise rents annually

• Portfolio diversification due to lower correlation to public markets and reduced portfolio

volatility

Strong Market Fundamentals

• New household formations forecast to exceed long term average and home ownership

that has declined to historically low levels

• Priced out of Class A units, Class B/C tenants are renters by necessity

• Enduring demand as largest demographic groups are choosing renting over buying

• Continued economic growth and emergence of wage growth

Confidential 10

Investment Structure

Confidential 11

DVO Real Estate

(Manager)

Management

agreement

AXE GP

Multifamily Fund*

DVO GP Co-Investment

Fund II

Project Company

Multifamily Property

Multifamily Portfolio

Debt

LTV 60-75%

Dividends Investments

DVO-Axe GP Equity SPV

30-80% Equity 70-20% Equity

Investors

Axe Capital

Management

agreement

GP Equity

Local GP

Partner

LP Equity

10-25% Deal Equity 90-75% Deal Equity

*Axe GP Multifamily Fund investors receive

unpromoted deal level economics

AXE GP Multifamily Fund Investment Terms

Terms Description

Strategy Multifamily Value-add and Ground-up

AXE GP Multifamily Fund Size Up to $20M equity

Fees• Management fee 1% on committed capital, 1% on invested capital

• No promote

Deal Mix

DVO-Axe GP Equity will seek to invest 50% of capital, but no less than 35% of capital, in

value-add multifamily deals and 50% of capital, but not less than 35% of capital, in ground up

multifamily development deals

GP Equity Capital StructureDVO-Axe GP Equity will contribute up to 80% of required GP equity in any transaction, up to a

maximum of $7.5M

Distribution Timing Available cash flow will be distributed quarterly net of reserves and Fund expenses

Profit Distribution1. Return of capital to investors

2. Profit to investors pro-rata

Investment Period 24 months

Holding Period 3-5 years

Quality of OperationsUse of private equity best practice in deals structuring, compliance, corporate management

and investor relations

Confidential 12

DVO Real Estate Track Record Summary

Confidential 13

Realized Investments Have Generated a Deal Level 38.3% IRR or 2.24x Cash Flow Multiple

Contact UsAddress:

Revoluční 724/7, 4th floor, office 16

110 00, Praha 1, Czech Republic

Phone:

+7 (495) 150-93-00

Email:

polyakov@axecapitalgroup.com