new investment manager summary · 2020. 8. 12. · 8 item no. 8: annual presentation by heitman...
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Item No. 8: Annual Presentation by Heitman Real Estate Securities, LLC – Active Global Real Estate Securities Manager (August 12, 2020, Regular Retirement Board Meeting)
INVESTMENT MANAGER SUMMARY
MANAGEMENT
Firm Name Heitman Real Estate Securities, LLC
Manager Tenure with Fund 7 Years
Investment Strategy/Vehicle Global Real Estate Securities
Contract Expiration 9/30/2022
ASSETS
Total Firm AUM $ 42.6 Billion
Total Firm Assets in Strategy $ 366 Million
Total Assets Managed for the Plan RP - $ 23.5 Million HP - $ 5.8 Million
As of 06/30/2020
PERFORMANCE
As of 06/30/2020 1-Year 3-Year 5-Year ITD¹
Heitman Global RE Securities (gross) -11.57% 1.24% 3.30% 4.20%
Heitman Global RE Securities (est. net) -12.12% 0.61% 2.66% 3.56%
FTSE EPRA/NAREIT Developed Index -15.46% -0.67% 2.22% 2.98%
Difference (net) 3.34% 1.28% 0.44% 0.58% ¹ Inception to date 10/31/2013
FEES
Current Fee 0.625% Flat Rate
WATCH STATUS
Placed on performance watch on June 26, 2019.
PREVIOUSLY DISCLOSED LITIGATION
N/A
Water and Power Employees’ Retirement PlanAugust 12, 2020
Please see appendix for important disclaimers and other important information.In addition, please note that this presentation does not constitute (i) an offer to sell, or the solicitation of an offer to buy, any interests in any investment vehicle, or (ii) a solicitation for any investment advisory or asset management services of Heitman or any of its affiliates. Any such offer or solicitation, if made, will only be made by means of a placement memorandum (in the case of an investment vehicle) or a proposed investment advisory agreement (in the case of advisory or asset management services). Further, this presentation is subject to correction, completion and amendment without notice.
Table of Contents
2Table of Contents
Heitman Overview 3
Investment Process & Discipline 8
Market Overview 12
Performance Review 17
Portfolio Review & Characteristics 26
Conclusion 30
APPENDICES
− Fee Schedule 32− Glossary of Investment Terms 34− Biographies 36− Performance Notes & Disclaimer 38
John MancusoSENIOR VICE PRESIDENT, CLIENT SERVICE & MARKETING – NORTH AMERICAT: +1.312.912.6672 • [email protected]
Mike MoranSENIOR VICE PRESIDENT, PUBLIC REAL ESTATE EQUITYT: +1.312.425.0383 • [email protected]
Heitman Overview
3
Heitman is a Real Estate Specialist
As of June 30, 2020
4
CHICAGO
LOS ANGELES
NEW YORK
LONDON
FRANKFURT
LUXEMBOURG
HONG KONG
MELBOURNE
SEOUL
TOKYO348
$33.7B $4.1B $4.8BPRIVATE EQUITY PRIVATE DEBT PUBLIC EQUITY
50+ yearsinvesting on behalf of clients with an exclusive focus on real estate
$42.6 billionmanaged across three complementary business units
37 partnersfrom across the Heitman platform own 100% of the company
Employees
10Offices
Client Relationships Built on Trust and Experience
Due to rounding, values reported may not equal the total AUM.Heitman selected clients for inclusion in this list to indicate the scope of clients served using the following criteria: category, geographic location, size, investment style and name recognition. Only clients who have consented to their name appearing on this list have been included, however, their inclusion is not construed to be approval or disapproval of Heitman or its advisory services.1. Other clients include: Individual, Endowment/Foundation, Union/Taft-Hartley, Insurance, Fund of Funds, Mutual Fund and Sovereign
Wealth Funds2. Corporate includes sub-advised and model-only portfolios
5
REPRESENTATIVE CLIENT LIST
ATP Real Estate
BT Investment Solutions (Australia)
California State Teachers’ Retirement System
Exelon Corporation
L3 Technologies
National Pension Service (South Korea)
Navy Exchange Service Command Retirement Trust
New York State Common Retirement Fund
Nomura Asset Management Co., Ltd.
Ohio Public Employees Retirement System
Pennsylvania State Employees’ Retirement System
Sompo Asset Management Co., Ltd.
State Board of Administration of Florida
State of Wisconsin Investment Board
Stichting Instituut Gak
Syntrus Achmea
Sunsuper (Australia)
Teacher Retirement System of Texas
Teachers' Retirement System of the State of Illinois
The Korean Teachers’ Credit Union
Tokio Marine Asset Management Co., Ltd.
64%
Public
$27,193
25%
Corporate²
$10,833
11%
Other¹
$4,564
TOTAL AUM BY CLIENT TYPE
78%
North America
$33,322
6%
Europe
$2,448
16%
Asia-Pac
$6,820
TOTAL AUM BY CLIENT DOMICILE
As of June 30, 2020
$4.8 billion
Heitman Real Estate Securities Key Differentiators
6
From Thomson Reuters Lipper Awards, ©2017 Thomson Reuters. All rights reserved. Used by permission and protected by the Copyright Laws of the United States. The printing, copying, redistribution, or retransmission of this Content without express written permission is prohibited.
Information Advantage
As of June 30, 2020
− 20 member global investment team made up of
country and sector specialists
• 16 years average experience
− $37.8B global private platform
Unique Approach to Risk Management− Risk management process neutralizes unintended
factor exposure
− Stock selection drives alpha
Client Alignment− Employee ownership
− Compensation structure
Assets Under Management
Global
Benchmarked
Securities
9%
Prime
58%
Regional
Benchmarked
Securities
33%
Heitman’s Global Public Equity Team
7
As of June 30, 20201. Jerry Ehlinger was with Heitman’s Public Securities group from 2000 to 2004; he rejoined in 2013 as Managing Director & Portfolio Manager of the North America team.2. John White began his relationship in 2007 as a Portfolio Manager at Challenger Financial Services Group, Heitman’s former strategic partner covering Asia-Pacific
Jerry Ehlinger, CFA¹Senior Managing Director
Firm Tenure
Years Experience10
25
REGIONALINVESTMENT TEAM
Jerry Ehlinger, CFA¹SENIOR MANAGING DIRECTOR
Jeff Yurk, CFAPORTFOLIO MANAGER
Charles Harbin, CFAPORTFOLIO MANAGER
Mat SpencerPORTFOLIO MANAGER
Gabriel HilmoeSENIOR ANALYST
John Minor, CFA SENIOR ANALYST
Mark ZaharaHEAD TRADER
Vicky Madison TRADER
16
18
10
18
5
9
4
16
2
9
20
21
John White²SENIOR MANAGING DIRECTOR
Karena FungPORTFOLIO MANAGER
Jason Lai, CFAPORTFOLIO MANAGER
Jeff Mak, CFAASSISTANT PORTFOLIO MANAGER
Yasuko FukudaSENIOR ASSOCIATE
Philip HunterTRADER
Jacques PerdrixSENIOR VICE PRESIDENT,
PORTFOLIO MANAGER
Andreas WelterSENIOR VICE PRESIDENT,
PORTFOLIO MANAGER
Jacques PerdrixPORTFOLIO MANAGER
Andreas WelterPORTFOLIO MANAGER
Fabien VaccaroSENIOR ANALYST
8
17
11
18
7
22
9
18
3
18
4
16
10
25
13
29
EUROPE ASIA-PACIFICNORTH AMERICA STRATEGY
Mike Moran, CFASENIOR VICE PRESIDENT,
GLOBAL INVESTMENT STRATEGIST
14
16GLOBAL INVESTMENT COMMITTEE
2
7
ANALYTICS
Shruti WaghraySVP, GLOBAL INVESTMENT ANALYST
Will LouxAVP, PORTFOLIO ANALYST
Hima PandyaAVP, GLOBAL INVESTMENT ANALYTICS
Tony VoSR. ASSOCIATE, QUANT ANALYST
Andrew PallesenASSOCIATE
Diane LehmannPORTFOLIO COORDINATOR
2
9
OPERATIONSBill Pogorelec
DIRECTOR OF OPERATIONS
Lisa ForneroMANAGER
David RadziwonMANAGER
Colleen CallahanSENIOR TRADING ADMINISTRATOR
Paul Wilson TRADING
ADMINISTRATOR
Michael ServialRECONCILIATION
SR. ASSOCIATE
Daniel LibermanASSOCIATE
25
27
3
11
4
25
<1
3
4
14
8
17
11
18
7
19
12
15
8
8
5
8
1
2
2
15
1
13
26
26
4
8
Investment Process & Discipline
8
Philosophy & Approach
As of June 30, 2020
9
$37.8 billion private global portfolio
Experienced and local securities teams
Private real estate expertise
Public market acumen
Sophisticated portfolio
construction & risk management
Top quartileperformance
Over the long term, underlying real estate
and management’s ability to affect value
drive share prices
Short-term pricing inefficiencies create alpha opportunities
Pillars of Portfolio Construction
10
Company Analysis
Macro Analysis
Active Risk Management
Fundamental Research
Summary of WPERP’s Investment GuidelinesPORTFOLIO GUIDELINES:
1. Global securities with minimum market capitalizations of $200mm at purchase, restricted to those listed on major local-country stock exchanges.
Investible markets are those within the FTSE EPRA/NAREIT Developed Index
2. Non-currency derivatives within the portfolio are not permissible without the expressed written consent of the Plan
3. Currency hedging maximum of 25% of the portfolio
4. Minimum of 50 issues quoted in at least 10 countries/regions. The maximum size of any single issue shall be the greater of 5% of the portfolio or 125% of
the benchmark weight, if the issue represents more than 5% of the benchmark. No issue purchased in the portfolio if more than 10% of outstanding share
of that company are held by Heitman in the total of all accounts
5. Cash equivalent should not normally exceed 5% of the portfolio
6. Turnover shall not normally exceed 150% in any twelve month period
7. Cannot purchase letter or restricted stock, naked options or future contracts, and uncovered short positions or commodities. Use of any derivative
instruments for speculation is prohibited
8. Rule 144A international equity instruments with registration rights are permissible up to 10% of the lesser of cost or market value of any single international
equity portfolio
9. Ineligible for cross transactions
PORTFOLIO CHARACTERISTICS:
1. Invested in broad array of countries within the FTSE EPRA/NAREIT Developed Index
2. Weighted average dividend yield on a quarterly basis to be within a +/- 0.5x range of the market as represented by the FTSE EPRA/NAREIT Developed
Index
3. Market sensitivity (beta) to be no less than 0.80 and no greater than 1.20 of the market as represented by the FTSE EPRA/NAREIT Developed Index on a 24-
month rolling basis, using monthly holdings data
PERFORMANCE OBJECTIVES:
− On an annual basis, Heitman is expected to outperform the FTSE EPRA/NAREIT Developed Index, net of fees, to be measured over a market cycle of three-to-
five years
COMPLIANCE:
− As of June 30, 2020, Heitman is in compliance with the guidelines for the accounts
11Investment Process & Discipline
Market Overview
12
Investment Themes & Outlook
13
DIVIDEND YIELD SPREAD TO GLOBAL BONDSFTSE EPRA/NAREIT DEVELOPED INDEX
PREMIUM/(DISCOUNT) TO NAVFTSE EPRA/NAREIT DEVELOPED INDEX GLOBAL INVESTMENT OUTLOOK
Macro Economy
− The COVID-19 pandemic is causing severe economic disruption that is being met with unprecedented monetary and fiscal stimulus
− Economic growth is slowly beginning to improve with the reopening of the economy
Capital Markets
− Capital markets are stressed but have not reached the same level of stress experienced during the GFC
− Central banks have been aggressive in ensuring the proper functioning of the capital markets
Real Estate Markets
− Sector performance is expected to be quite varied, with significant problems in retail and hotels expected to continue
− Sectors with strong demand drivers entering the pandemic, such as data centers and logistics, are expected to continue to see strong demand
-1
0
1
2
3
4
Jun
-10
De
c-1
0
Jun
-11
De
c-1
1
Jun
-12
De
c-1
2
Jun
-13
De
c-1
3
Jun
-14
De
c-1
4
Jun
-15
De
c-1
5
Jun
-16
De
c-1
6
Jun
-17
De
c-1
7
Jun
-18
De
c-1
8
Jun
-19
De
c-1
9
Jun
-20
Spread L-T Avg.
As of June 30, 2020
Sources: Heitman Research, FTSE EPRA/NARET
22.1%
-21.9%
Average = 3.2%7.0%
-30%
-20%
-10%
0%
10%
20%
30%
Jun
-10
No
v-1
0
Ap
r-11
Se
p-1
1
Fe
b-1
2
Jul-
12
De
c-1
2
Ma
y-13
Oc
t-13
Ma
r-14
Au
g-1
4
Jan
-15
Jun
-15
No
v-1
5
Ap
r-16
Se
p-1
6
Fe
b-1
7
Jul-
17
De
c-1
7
Ma
y-18
Oc
t-18
Ma
r-19
Au
g-1
9
Jan
-20
Jun
-20
Pre
miu
m /
Dis
co
un
t to
NA
V
Investment Themes & Outlook
14
NORTH AMERICA INVESTMENT OUTLOOK
Macro Economy
− The COVID-19 pandemic is causing severe economic disruption that is being met with unprecedented monetary and fiscal stimulus
− Since a biological threat drives this economic recession, though, once the threat has passed we expect economic growth to resume
Capital Markets
− Capital markets are stressed but have not reached the same level of stress experienced during the GFC
− The Federal Reserve has been aggressive in ensuring the proper functioning of the capital markets
− Higher quality REITs have been able to issue new corporate bonds at reasonable rates and spreads
Real Estate Markets
− Sector performance is expected to be quite varied, with significant problems in retail and relatively minor disruption in office
− The hotel sector has experienced the worst disruption with many hotels shut and REITs currently in a cash burn state
− Demand weakness will likely continue until social distancing measures
PREMIUM/DISCOUNT TO NAV BY REGION –FTSE EPRA/NAREIT DEVELOPED INDEX
FTSE EPRA/NAREIT NORTH AMERICADIVIDEND YIELD SPREAD TO BONDS
0
1
2
3
4
5
Jun
-10
De
c-1
0
Jun
-11
De
c-1
1
Jun
-12
De
c-1
2
Jun
-13
De
c-1
3
Jun
-14
De
c-1
4
Jun
-15
De
c-1
5
Jun
-16
De
c-1
6
Jun
-17
De
c-1
7
Jun
-18
De
c-1
8
Jun
-19
De
c-1
9
Jun
-20
Spread L-T Avg.
As of June 30, 2020
Sources: Heitman Research, FTSE EPRA/NARET
3.64%
2.68%
-3.64%
1.48%2.25%
-3.17%
-5%
0%
5%
US Canada FTSE EPRA/NAREIT
Developed Index
5-yr average
prem/(disc) to NAV
Investment Themes & Outlook
15
PREMIUM/DISCOUNT TO NAV BY REGION –FTSE EPRA/NAREIT DEVELOPED INDEX
FTSE EPRA/NAREIT EUROPEDIVIDEND YIELD SPREAD TO BONDS
EUROPE INVESTMENT OUTLOOK
Macro Economy
− European GDP growth is expected to have fallen at a record rate in Q2 but is expected to recover slowly with the reopening of economies
− Unprecedented monetary and fiscal stimulus are clear backstops to a severe and long-lasting recession and high unemployment
Capital Markets
− Primary and secondary equity market activity has picked up during the Q2, though mostly skewed toward high-quality companies with defensive business models to take advantage of opportunities in the market
− Primary IG credit activity has also resumed, and spreads have improved substantially during Q2, though they remain elevated compared to pre-COVID-19
− Accommodative central bank policies are expected to continue at least into 2021 as weak growth and low inflation data are expected
Real Estate Markets
− The most significant negative impact is in retail and hospitality, and that trend is expected to continue
− Logistics, rented residential, medical healthcare, and food retail have proven to be almost unaffected by the crisis and are expected to continue to be very resilient
− Supply is expected to shrink in the short-term (especially in office and retail) as companies have announced to reduce capex and new development
As of June 30, 2020
Sources: Heitman Research, FTSE EPRA/NARET
0
1
2
3
4
5
Jun
-10
De
c-1
0
Jun
-11
De
c-1
1
Jun
-12
De
c-1
2
Jun
-13
De
c-1
3
Jun
-14
De
c-1
4
Jun
-15
De
c-1
5
Jun
-16
De
c-1
6
Jun
-17
De
c-1
7
Jun
-18
De
c-1
8
Jun
-19
De
c-1
9
Jun
-20
Spread L-T Avg.
DIVIDEND YIELD SPREAD TO BONDS
-7.81%
-2.88% -3.64%
-1.89%
-8.80%
-3.17%
-10%
-5%
0%
5%
10%
Continental Europe UK FTSE EPRA/NAREIT
Developed Index
5-yr average prem/(disc) to NAV
Investment Themes & Outlook
16
ASIA-PACIFIC INVESTMENT OUTLOOK
Macro Economy− Starting in late 2Q, some parts of the region resumed business activities as
the spread of virus slowed. However, this quickly reversed, and new measures such as social distancing were imposed again in Hong Kong, Japan, and Australia
− The outlook for the economy remains uncertain as severe economic disruption continues
Capital Markets− Given the heightened near-term uncertainty capital raising activities have
slowed
− However, we have seen several retail REITs in Australia raise capital to strengthen their balance sheets, while some logistics REITs in Japan raised capital for growth opportunities
− All countries in the region have very low interest rates and listed property companies can easily refinance their debt or issue corporate bonds
Real Estate Markets− The retail and hotel sectors continue to struggle as they are the most
pressured segments, with hotel occupancy dropping to the single-digits and retail spending is skewed to non-discretionary spending
− New office construction is slowing as the weakening economy, and the emerging work from home trend lead to a softer office space demand
− Data centre and logistics continue to stay relatively better positioned with their stable business nature and secular demand drivers
PREMIUM/(DISCOUNT) TO NAV BY REGION –FTSE EPRA/NAREIT DEVELOPED INDEX
FTSE EPRA/NAREIT ASIA-PACIFICDIVIDEND YIELD SPREAD TO BONDS
As of June 30, 2020
Sources: Heitman Research, FTSE EPRA/NARET
1
2
3
4
5
Jun
-10
De
c-1
0
Jun
-11
De
c-1
1
Jun
-12
De
c-1
2
Jun
-13
De
c-1
3
Jun
-14
De
c-1
4
Jun
-15
De
c-1
5
Jun
-16
De
c-1
6
Jun
-17
De
c-1
7
Jun
-18
De
c-1
8
Jun
-19
De
c-1
9
Jun
-20
Spread L-T Avg
1.72%
-23.63%-20.96%
-3.64%2.46%
-26.87%
-2.50% -3.17%
-30%
-20%
-10%
0%
10%
Australia/New
Zealand
Asia Ex-Japan Japan FTSE
EPRA/NAREIT
Developed Index
5-yr average prem/(disc) to NAV
Performance Review
17
Portfolio Portfolio FTSE EPRA/NAREIT S pr ead S pr ead
(Gross of Fee)1 (Net of Fee)1 Developed Index (G r oss of Fee) (Net of Fee)
Quarter To Date 11.19% 11.02% 10.33% +0.86% +0.69%
Year To Date -17.78% -18.04% -20.93% +3.15 % +2.89%
Rolling One Year -11.47% -12.02% -15.46% +3.99% +3.44%
Rolling Three Years 1.34% 0.71% -0.67% +2.01% +1.38%
Rolling Five Years 3.41% 2.76% 2.22% +1.19% +0.5 4%
Since Inception (10/31/13) 4.31% 3.66% 2.98% +1.33% +0.68%
LA Water and Power Employees’ Retirement Plan Performance
1. Returns are calculated and presented in US Dollars. Periods Ending 6/30/20. 2. FTSE EPRA/NAREIT Developed IndexPlease read Performance Notes pages for important disclosure information
Performance Review 18
11.19%
-17.78%
-11.47%
1.34%3.41% 4.31%
11.02%
-18.04%
-12.02%
0.71%2.76% 3.66%
10.33%
-20.93%
-15.46%
-0.67%
2.22% 2.98%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
Quarter To Date Year To Date Rolling One Year Rolling Three Years Rolling Five Years Since Inception
(10/31/13)
Gross of Fees¹ Net of Fees¹ Index²ENDING MARKET VALUE AS OF JUNE 30, 2020: $23,496,442
Portfolio Portfolio FTSE EPRA/NAREIT S pr ead S pr ead
(Gross of Fee)1 (Net of Fee)1 Developed Index (G r oss of Fee) (Net of Fee)
Quarter To Date 11.19% 11.01% 10.33% +0.86% +0.68%
Year To Date -17.76% -18.02% -20.93% +3.17% +2.91%
Rolling One Year -11.46% -12.01% -15.46% +4.00% +3.44%
Rolling Three Years 1.35% 0.72% -0.67% +2.02% +1.38%
Rolling Five Years 3.42% 2.77% 2.22% +1.20% +0.5 6%
Since Inception (10/31/13) 4.32% 3.66% 2.98% +1.33% +0.68%
11.19%
-17.76%
-11.46%
1.35%3.42% 4.32%
11.01%
-18.02%
-12.01%
0.72%2.77% 3.66%
10.33%
-20.93%
-15.46%
-0.67%
2.22% 2.98%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
Quarter To Date Year To Date Rolling One Year Rolling Three Years Rolling Five Years Since Inception
(10/31/13)
Gross of Fees¹ Net of Fees¹ Index²
LA Water and Power Employees’ Retiree Health Benefit Plan Performance
19
1. Returns are calculated and presented in US Dollars. Periods Ending 6/30/20.2. FTSE EPRA/NAREIT Developed IndexPlease read Performance Notes pages for important disclosure information
ENDING MARKET VALUE AS OF JUNE 30, 2020: $5,817,041
Performance Review
Annualized Peer Relative Performance
Performance Review
Source: eVestment; HeitmanQuartile performance ranking calculated using the Global Diversified Developed CompositeReturns calculated and presented in USD and Gross of Fees for the Composite. As of 6/30/2020
LA WATER AND POWER EMPLOYEES’ RETIREMENT PLAN LA WATER AND POWER EMPLOYEES’ RETIREE HEALTH BENEFIT PLAN
1 Year 3 Years 5 Years 1 Year 3 Years 5 Years
l LA Water ERP 3.99% 2.01% 1.19% l LA Water ERHBP 4.00% 2.02% 1.20%
1st Quartile 1st Quartile
2nd Quartile 2nd Quartile
3rd Quartile 3rd Quartile
4th Quartile 4th Quartile
High 18.07 9.61 6.37 High 18.07 9.61 6.37
25th Percentile 8.77 4.78 3.07 25th Percentile 8.77 4.78 3.07
Median 5.79 3.76 2.18 Median 5.79 3.76 2.18
75th Percentile 3.92 1.82 1.03 75th Percentile 3.92 1.82 1.03
Low -11.98 -4.80 -3.79 Low -11.98 -4.80 -3.79
20
Calendar Year Peer Relative Performance
Performance Review 21
Source: eVestment; HeitmanQuartile performance ranking calculated using the Global Diversified Developed CompositeReturns calculated and presented in USD and Gross of Fees for the Composite. As of 6/30/20
2019 2018 2017 2016 2015 2019 2018 2017 2016 2015
l LA Water ERP 1.72% 0.81% -0.44% -0.66% 1.05% l LA Water 1.70% 0.81% -0.42% -0.66% 1.08%
1st Quart ile 1st Quart ile
2nd Quart ile 2nd Quart ile
3rd Quart ile 3rd Quart ile
4th Quart ile 4th Quart ile
High 12.41 3.17 10.24 4.41 8.47 High 12.41 3.17 10.24 4.41 8.47
25th Percentile 5.09 1.09 3.74 0.33 2.82 25th 5.09 1.09 3.74 0.33 2.82
Median 3.54 0.13 1.23 -1.11 1.56 Median 3.54 0.13 1.23 -1.11 1.56
75th Percentile 1.32 -1.61 0.20 -3.20 0.08 75th 1.32 -1.61 0.20 -3.20 0.08
Low -1.22 -20.27 -6.13 -6.20 -7.04 Low -1.22 -20.27 -6.13 -6.20 -7.04
Observations 55 48 53 53 52 Observations 55 48 53 53 52
LA WATER AND POWER EMPLOYEES’ RETIREMENT PLAN LA WATER AND POWER EMPLOYEES’ RETIREE HEALTH BENEFIT PLAN
Heitman Global Real Estate Securities StrategyRisk-Adjusted Performance - USD
22
HEITMAN GLOBAL REAL ESTATE SECURITIES STRATEGY
Heitman Global Real Estate Securities Strategy Composite Heitman FTSE Portfolio¹ Index² Portfolio¹ Index² Portfolio¹ Index²
Annualized Return -11.51% -15.46% 1.38% -0.67% 3.33% 2.22% 6.31% 5.00%
Excess return over 90-day T-bills -12.71% -16.66% -0.25% -2.29% 2.21% 1.10% 5.69% 4.39%
Standard Deviation 23.98% 25.33% 16.88% 17.60% 15.14% 15.70% 14.94% 15.25%
Sharpe Ratio -0.53 -0.66 -0.01 -0.13 0.15 0.07 0.38 0.29
Sortino Ratio -0.57 -0.69 -0.02 -0.15 0.19 0.09 0.53 0.39
Excess return over benchmark
Tracking Error
Information Ratio
Alpha
Jensens Alpha
Beta
R2
Upside Market Capture
Downside Market Capture
1.08 1.05 1.01 1.03
0.92 0.94 0.95 0.96
0.95 0.96 0.96 0.98
1.00 1.00 1.00 1.00
3.42 1.94 1.12 1.32
3.04 1.95 1.16 1.40
1.69% 1.29% 1.19% 1.07%
2.33 1.58 0.94 1.22
1 Year 3 Years 5 Years Since Inception
3.94% 2.04% 1.12% 1.30%
The Risk Adjusted Performance is shown above as supplemental information to the Heitman Global Real Estate Securities Strategy Composite.
1 Returns are calculated and presented in USD and Gross of Fees. Periods Ending June 30, 2020
2 FTSE EPRA/NAREIT Developed Index
3 Linked monthly excess returns over risk-free T-bills.
4 For the periods when the excess returns over risk-free T-bills are negative, the Sharpe ratio has been adjusted to the Modified Sharpe Ratio.
Please read Performance Notes pages for important disclosure information.
Heitman Global Real Estate Securities Strategy
23
As of June 30, 2020.
The Portfolio Characteristics shown above are supplemental information to the Heitman Global Real Estate Securities Strategy Composite.
The composite benchmark changed from the FTSE EPRA/NAREIT Developed Rental Index to the FTSE EPRA/NAREIT Developed Index effective June 1, 2012.
1. FTSE EPRA/NAREIT Developed Index and the respective regional sleeves.
Residential22.2%
Office16.7%
Industrial14.8%
Diversified12.9% Health Care
9.6%
Retail 7.2%
Specialty 6.3%
Hotel/R&E 3.5%
Data Centers 3.5%
Storage 3.4%
SECTOR WEIGHTINGS
PORTFOLIO CHARACTERISTICS
Heitman Index¹
Number of Securities 97 339
Top 10 Holdings 26.96% 22.03%
Active Share
Beta 1.02 1.00
Dividend Yield 3.43% 3.87%
NAV Prem/(Disc) -4.14% -3.64%
Earnings Growth -1.54% -0.96%
LTV 32.86% 32.94%
54.27%
Japan, 11.28%
Hong Kong, 6.27%
Australia, 3.35%
Singapore, 3.37%US, 54.98%
Canada, 2.55%
Europe, 13.60%
UK, 4.60%
Asia-Pacific
24%
North America
58%
Europe
18%
0%
10%
20%
30%
40%
50%
60%
70%
Asia-Pacific North America Europe
COUNTRY WEIGHTINGS
OVERWEIGHTS/UNDERWEIGHTSSecurity Sector Heitman Active Weight
Duke Realty Corp Industrial 2.66% +1.69%
Invitation Homes Residential 2.72% +1.61%
Healthpeak Properties Inc Health Care 2.66% +1.55%
Welltower Health Care 3.14% +1.53%
Highwoods Properties Inc Office 1.80% +1.52%
Digital Realty Trust Inc Data Centers 0.00% -2.83%
Public Storage Storage 0.00% -2.16%
AvalonBay Communities Inc Residential 0.00% -1.62%
Simon Property Group Inc Retail 0.00% -1.55%
Essex Property Trust Inc Residential 0.00% -1.11%
To
p 5
Bo
tto
m 5
Heitman Global Real Estate Securities StrategyPerformance Attribution – USD – 12 mos
24
Breakdown
Average
Weight
Total
Return
Total
Return
(Local)
Contribution
To Return
Average
Weight
Total
Return
Total
Return
(Local)
Contribution
To Return
Average
Weight
Total
Return
Total
Return
(Local)
Contribution
To Return
Allocation
Effect
(Local)
Selection
Effect
(Local)
Interaction
Effect
(Local)
Total Effect
(Local)
Total
Currency
Effect Total Effect
North America 57.72 -9.20 -8.94 -5.23 57.64 -15.80 -15.59 -8.71 0.09 6.60 6.64 3.48 0.01 4.17 -0.38 3.80 -0.04 3.75
United States 54.65 -9.19 -9.19 -4.54 54.72 -15.52 -15.52 -7.85 -0.06 6.33 6.33 3.31 0.00 3.78 -0.36 3.43 -0.02 3.41
Canada 3.07 -12.88 -9.20 -0.69 2.92 -21.12 -17.79 -0.86 0.15 8.24 8.59 0.17 0.05 0.33 -0.02 0.36 -0.02 0.33
Europe 17.26 -4.41 -2.89 -0.29 17.20 -7.77 -6.40 -1.01 0.05 3.36 3.51 0.72 0.04 0.66 -0.07 0.63 0.00 0.63
Europe 12.67 -2.71 -1.71 0.09 12.68 -6.20 -5.23 -0.44 -0.01 3.49 3.53 0.53 0.00 0.44 -0.01 0.43 0.00 0.44
United Kingdom 4.59 -8.99 -6.25 -0.38 4.52 -12.14 -9.50 -0.57 0.06 3.15 3.25 0.19 0.01 0.21 -0.06 0.15 -0.01 0.15
Middle East 0.00 - - 0.00 0.18 -30.46 -32.52 -0.07 -0.18 - 32.52 0.07 0.05 0.00 0.00 0.05 -0.01 0.05
Middle East 0.00 - - 0.00 0.18 -30.46 -32.52 -0.07 -0.18 - 32.52 0.07 0.00 0.00 0.00 0.00 -0.01 -0.01
Asia 24.70 -19.34 -18.84 -5.93 24.98 -19.39 -18.77 -5.67 -0.29 0.05 -0.07 -0.26 -0.02 0.04 -0.08 -0.05 0.02 -0.04
Singapore 2.85 3.73 6.96 -0.12 2.94 -8.12 -5.35 -0.41 -0.09 11.86 12.31 0.29 -0.01 0.32 -0.02 0.30 0.00 0.30
Australia / New Zealand 3.80 -26.79 -25.38 -1.46 3.84 -32.82 -31.27 -1.67 -0.04 6.03 5.89 0.21 -0.01 0.23 0.02 0.24 0.01 0.24
Hong Kong 6.36 -25.18 -25.78 -2.05 6.42 -24.70 -25.26 -1.85 -0.06 -0.48 -0.51 -0.20 -0.05 -0.05 0.00 -0.10 0.01 -0.10
Japan 11.69 -17.52 -17.41 -2.29 11.78 -13.93 -13.81 -1.75 -0.09 -3.59 -3.60 -0.54 -0.01 -0.39 -0.08 -0.47 0.01 -0.47
Cash 0.32 -27.23 -4.48 -0.05 0.00 - - 0.00 0.32 - -4.48 -0.05 -0.41 0.00 0.00 -0.41 -0.01 -0.42
Cash 0.32 -27.23 -4.48 -0.05 0.00 - - 0.00 0.32 - -4.48 -0.05 0.00 0.00 0.00 0.00 -0.01 -0.01
Total 100.00 -11.50 -10.97 -11.50 100.00 -15.46 -14.98 -15.47 0.00 3.96 4.02 3.97 -0.33 4.87 -0.53 4.02 -0.05 3.97
Heitman Global Real Estate Securities Strategy Composite FTSE EPRA/NAREIT Developed Index Variation Attribution Analysis
Heitman Global Real Estate Securities Strategy Composite
Returns are presented in USD. 12 Months Ending June 30, 2020
1. Representative Heitman Global Real Estate Securities Strategy Composite.
Please read Performance Notes pages for important disclosure information.
Please read Attribution Analysis Performance Notes page for important disclosure information.
Top Ten Contributors/Detractors
25Performance Review
Portfolio data for Los Angeles Water and Power Employees’ Retirement PlanOne year ended 6/30/2020
Top Ten Contributors
ProLogis 1.27
CyrusOne 1.20
Ventas 1.12
American Campus Communities 0.77
Vonovia 0.43
Deutsche Wohnen AG 0.41
GLP J-REIT 0.40
Duke Realty 0.39
Summit Hotel Properties 0.32
Tritax Big Box REIT 0.28
Bottom Ten Detractors
VICI Properties -0.94
Boston Properties -0.91
Simon Property Group -0.86
Apartment Investment & Management -0.80
Welltower -0.74
Link REIT -0.69
Unibail-Rodamco-Westfield -0.67
UDR -0.66
Scentre Group -0.65
Federal Realty Investment Trust -0.65
Portfolio Review & Characteristics
26
Top Ten Holdings
27Portfolio Review & Characteristics
Portfolio data for Los Angeles Water and Power Employees’ Retirement Plan6/30/2020
Security Region Sector
Portfolio
Weight
Benchmark
Weight
Excess
Weight
ProLogis North America Industrial 4.84% 5.13% -0.29
Welltower North America Healthcare 3.15% 1.61% +1.53
Invitation Homes North America Residential 2.73% 1.12% +1.61
Duke Realty North America Industrial 2.66% 0.97% +1.69
Healthpeak Properties North America Health Care 2.66% 1.11% +1.55
Realty Income North America Specialty 2.64% 1.52% +1.11
UDR North America Residential 2.29% 0.82% +1.48
Cyrusone North America Data Centers 2.07% 0.62% +1.45
Boston Properties North America Office 1.93% 1.05% +0.89
Vonovia Europe Residential 1.92% 2.48% -0.56
Complete List of Holdings
28Portfolio Review & Characteristics 28
Portfolio data for Los Angeles Water and Power Employees’ Retirement Plan6/30/2020
Portfolio Benchmark Weight Market Portfolio Benchmark Weight Market
Security Region Sector Weight Weight Excess Value Base Security Region Sector Weight Weight Excess Value Base
Aedifica SA Europe Healthcare 0.62 0.22 0.40 144,908.59 Klepierre SA Europe Retail 0.70 0.16 0.54 72,844.03
Agree Realty Corp North America Specialty 1.36 0.26 1.10 318,693.50 Life Storage Inc North America Storage 0.31 0.28 0.03 381,699.00
Alexandria Real Estate Equities Inc North America Healthcare 0.95 1.51 -0.56 223,256.00 Link REIT Asia Retail 1.62 0.33 1.29 296,607.91
American Assets Trust Inc North America Retail 1.06 0.10 0.95 247,970.88 Mapletree Industrial Trust Asia Industrial 1.26 1.26 0.01 142,832.41
American Campus Communities Inc North America Residential 0.94 0.36 0.58 220,597.60 MCUBS MidCity Investment Corp Asia Office 0.61 0.24 0.37 0.00
Apartment Investment and Management Co North America Residential 1.50 0.41 1.09 352,686.80 Mid-America Apartment Communities Inc North America Residential 1.91 0.97 0.94 449,506.40
Aroundtown SA Europe Office 0.98 0.51 0.47 230,876.47 Minto Apartment Real Estate Investment Trust North America Residential 0.87 0.00 0.87 205,136.56
Ascendas Real Estate Investment Trust Asia Industiral 0.86 0.50 0.36 201,211.66 Mirvac Group Asia Diversified 0.86 0.44 0.42 201,331.50
Boston Properties Inc North America Office 0.06 0.00 0.06 454,340.26 Mitsubishi Estate Co Ltd Asia Diversified 1.75 1.26 0.49 411,494.26
Brixmor Property Group Inc North America Retail 1.93 1.05 0.89 134,892.04 Mitsubishi Estate Logistics REIT Investment Corp Asia Industiral 0.38 0.08 0.29 88,205.03
CA Immobilien Anlagen AG Europe Office 0.07 0.00 0.07 108,529.26 Mitsui Fudosan Co Ltd Asia Diversified 1.07 1.22 -0.15 252,322.68
City Developments Ltd Asia Diversified 0.57 0.28 0.29 174,502.02 Mori Hills REIT Investment Corp Asia Office 0.61 0.15 0.46 142,657.46
CK Asset Holdings Ltd Asia Diversified 0.46 0.17 0.29 328,871.25 New Senior Investment Group Inc North America Healthcare 0.23 0.00 0.23 53,235.72
Covivio Europe Office 0.74 0.21 0.53 106,636.36 Nyfosa AB Europe Office 0.45 0.09 0.36 105,944.09
CyrusOne Inc North America Data Centers 1.40 1.20 0.20 487,425.00 Orix JREIT Inc Asia Office 0.73 0.26 0.47 170,385.13
Daiwa House REIT Investment Corp Asia Residential 0.45 0.25 0.20 145,970.25 Pandox AB Europe Htl/Rsrt & Ent 0.83 0.08 0.75 195,216.39
Derwent London PLC Europe Office 2.07 0.62 1.45 134,697.17 Physicians Realty Trust North America Healthcare 1.46 0.26 1.20 343,900.08
Deutsche Wohnen SE Europe Residential 0.62 0.35 0.27 367,887.85 Piedmont Office Realty Trust Inc North America Office 1.09 0.16 0.94 256,773.99
Dexus Asia Diversified 0.57 0.26 0.32 230,051.78 Primary Health Properties PLC Europe Healthcare 0.39 0.17 0.21 90,946.54
DiamondRock Hospitality Co North America Htl/Rsrt & Ent 1.57 1.21 0.36 250,481.35 Prologis Inc North America Industiral 4.84 5.13 -0.29 1,136,292.75
Dream Office Real Estate Investment Trust North America Office 0.98 0.52 0.46 208,002.29 PSP Swiss Property AG Europe Office 0.94 0.36 0.58 220,370.32
Duke Realty Corp North America Industiral 1.07 0.08 0.98 625,624.42 QTS Realty Trust Inc North America Data Centers 0.85 0.29 0.56 199,319.90
Equinix Inc North America Data Centers 0.89 0.05 0.84 118,688.70 Realty Income Corp North America Specialty 2.64 1.52 1.11 619,871.00
Equity LifeStyle Properties Inc North America Residential 2.66 0.97 1.69 431,236.96 Safestore Holdings PLC Europe Storage 0.42 0.14 0.28 98,011.25
Equity Residential North America Residential 0.51 0.00 0.51 327,627.40 Scentre Group Asia Retail 0.31 0.58 -0.27 72,886.98
Essential Properties Realty Trust Inc North America Specialty 1.84 0.81 1.03 272,091.40 Segro PLC Europe Industiral 0.99 0.98 0.01 232,009.96
Extra Space Storage Inc North America Storage 1.39 1.61 -0.22 313,226.67 SITE Centers Corp North America Retail 0.51 0.09 0.42 120,268.80
Fabege AB Europe Office 1.16 0.10 1.06 188,609.68 Stockland Asia Diversified 0.75 0.41 0.35 176,786.08
Fastighets AB Balder Europe Residential 1.33 0.87 0.47 185,884.70 Sumitomo Realty & Development Co Ltd Asia Diversified 1.10 0.81 0.29 258,495.21
First Industrial Realty Trust Inc North America Industiral 0.80 0.23 0.57 371,714.80 Summit Hotel Properties Inc North America Htl/Rsrt & Ent 0.78 0.05 0.73 182,780.39
Frasers Centrepoint Trust Asia Retail 0.79 0.28 0.52 100,422.62 Summit Industrial Income REIT North America Industiral 0.76 0.08 0.69 179,568.28
Gecina SA Europe Office 1.58 0.36 1.22 172,841.56 Sun Hung Kai Properties Ltd Asia Diversified 1.76 1.35 0.40 412,757.13
GLP J-Reit Asia Industiral 0.43 0.09 0.34 274,166.94 Sunstone Hotel Investors Inc North America Htl/Rsrt & Ent 0.78 0.13 0.65 183,529.85
Great Portland Estates PLC Europe Office 0.74 0.48 0.26 105,905.60 Supermarket Income Reit PLC Europe Retail 0.19 0.00 0.19 45,514.57
Healthpeak Properties Inc North America Healthcare 1.17 0.39 0.77 624,730.08 Swire Properties Ltd Asia Diversified 0.71 0.20 0.51 166,904.64
Helical PLC Europe Office 0.45 0.15 0.30 153,182.22 TAG Immobilien AG Europe Residential 0.65 0.22 0.43 152,937.92
Highwoods Properties Inc North America Office 2.66 1.11 1.55 424,143.46 Tritax Big Box REIT PLC Europe Industiral 0.23 0.23 0.00 53,513.92
Hudson Pacific Properties Inc North America Office 0.65 0.03 0.62 199,216.88 UDR Inc North America Residential 2.29 0.82 1.48 539,206.50
Hysan Development Co Ltd Asia Diversified 1.81 0.29 1.52 155,773.20 Unibail-Rodamco-Westfield Europe Retail 0.33 0.57 -0.24 77,970.69
Ingenia Communities Group Asia Residential 0.85 0.28 0.57 98,302.30 UNITE Group PLC/The Europe Residential 0.68 0.28 0.40 158,841.90
Inmobiliaria Colonial Socimi SA Europe Office 0.66 0.15 0.52 104,732.57 United Urban Investment Corp Asia Diversified 0.60 0.24 0.36 140,610.84
Invesco Office J-Reit Inc Asia Office 0.42 0.00 0.42 0.00 VICI Properties Inc North America Specialty 1.12 0.71 0.41 262,268.10
Invitation Homes Inc North America Residential 0.45 0.21 0.23 640,402.86 Vonovia SE Europe Residential 1.92 2.48 -0.56 451,853.57
Japan Real Estate Investment Corp Asia Office 2.73 1.12 1.61 230,662.28 Warehouses De Pauw CVA Europe Industrial 0.55 0.27 0.28 129,803.35
Japan Retail Fund Investment Corp Asia Retail 0.98 0.50 0.48 147,110.35 Weingarten Realty Investors North America Retail 1.16 0.17 0.99 273,065.25
Kenedix Office Investment Corp Asia Residential 0.63 0.24 0.38 122,556.43 Welltower Inc North America Healthcare 3.15 1.61 1.53 739,404.00
Kenedix Residential Next Investment Corp Asia Residential 0.52 0.16 0.36 163,873.57 Wharf Holdings Ltd/The Asia Diversified 0.41 0.00 0.41 97,183.74
Kenedix Retail REIT Corp Asia Retail 0.70 0.12 0.58 74,375.49 Xior Student Housing NV Europe Residential 0.63 0.06 0.57 149,154.94
Keppel DC REIT Asia Office 0.32 0.07 0.24 165,438.20
Change in Market Value Since Inception
29Portfolio Review & Characteristics
Portfolio data for Los Angeles Water and Power Employees’ Retirement Plan and Retiree Health Benefit Plan combinedAs of 6/30/20
$13.68
$16.48
$20.24$21.50
$25.68$26.71
$25.01$24.72
$25.90
$27.22$28.03$28.35
$26.96$27.49
$28.31$28.77$29.88
$28.58
$30.30$30.35
$28.66
$32.99$33.18
$34.77$35.70
$26.38
$29.31
$10.00
$15.00
$20.00
$25.00
$30.00
$35.00
$40.00
12/31/2013 9/30/2014 6/30/2015 3/31/2016 12/31/2016 9/30/2017 6/30/2018 3/31/2019 12/31/2019
Market Value ($ in milllions)
Conclusion
30
Heitman Key Differentiators
31
Information Advantage
Unique Approach to Risk Management
Client Alignment
Appendix: Fee Schedule
32
WPERP Fee Schedule
33Appendix: Fee Schedule
62.5 bps per annum on the average of the month end market values,
as computed by the custodian
As of 6/30/20
Appendix: Glossary of Investment Terms
34
Common REIT Terms
− Cash Available for Distribution (CAD): CAD is calculated by subtracting from Funds from Operations (FFO) both (1)
normalized recurring expenditures that are capitalized by the REIT and then amortized, but which are necessary to
maintain a REIT's properties and its revenue stream (e.g., new carpeting and drapes in apartment units, leasing expenses
and tenant improvement allowances) and (2) "straight-lining" of rents.
− Capitalization Rate: The capitalization rate (or "cap" rate) for a property is determined by dividing the property's net
operating income by its purchase price. Generally, high cap rates indicate higher returns and greater perceived risk.
− Funds From Operations (FFO): The most commonly accepted and reported measure of REIT operating performance.
Equal to a REIT's net income, excluding gains or losses from sales of property, and adding back real estate depreciation.
− Mortgage REIT: A REIT that makes or owns loans and other obligations that are secured by real estate collateral.
− Multiple to Growth: This is a common valuation measure that is calculated by dividing a REIT’s following year Price/FFO
multiple by its FFO growth rate plus dividend yield and then dividing by 100.
− Net Asset Value (NAV): The net "market value" of all a company's assets, including but not limited to its properties, after
subtracting all its liabilities and obligations.
− Straight-lining: Real estate companies such as REITs "straight line" rents because generally accepted accounting
principles require it. Straight lining averages the tenant's rent payments over the life of the lease.
− Payout Ratio: This is a measure of the security of a company’s dividend and is calculated by dividing a REITs CAD by its
dividend.
35Appendix: Glossary of Investment Terms
Appendix: Biographies
36
Presenters
Mike Moran is a Senior Vice President, Global Investment Strategy in Heitman's Public Real Estate Securities group. He serves on the group's Global Investment Committee. Mike's primary responsibilities include integrating company, sector, country, regional, and global data to support Heitman's team of analysts and portfolio managers in their stock selection. He is also responsible for identifying and implementing best practices across the global team, including the development and enhancement of Heitman's investment process. In addition, Mike works with the firm's Client Service & Marketing group to understand the needs, situations and objectives of Heitman's clients. Prior to his current role, he was an Assistant Portfolio Manager in Heitman's North American Public Real Estate Securities group where he was responsible for fundamental company and market analysis supporting his stock recommendations. Prior to joining Heitman, Mike was with RHS Companies as a development associate, responsible for developing financial models and performing investment analysis, feasibility analysis and due diligence for potential development projects. He was also a project manager for a large mixed use land development project and a condo-hotel project. Mike received a BBA and an MBA from the University of Wisconsin-Madison and is a CFA Charterholder.
John Mancuso is a Senior Vice President in Heitman’s Client Service & Marketing group. He is responsible for developing and maintaining relationships with institutional investors in the western region of the US in private real estate equity, public securities, and private real estate debt. Prior to joining Heitman, John was the head of private markets research at Russell Investments. He was responsible for overseeing Russell’s private markets investment research practice on a global basis by setting research priorities, identifying strategies for inclusion in client portfolios, and managing the due diligence process. Previously, John was with Meketa Investment Group, where he was responsible for supporting several client relationships and coordinating the research and due diligence process for real estate investments. John began his career at Lucent Technologies, working in several accounting and finance roles across the business. John received a BS in Finance from Boston College and an MS in Management from the F.W. Olin School of Business at Babson College. He is a member of the Pension Real Estate Association, CFA Institute and the CFA Society of Colorado.
37Appendix: Biographies
Appendix: Performance Notes & Disclaimer
38
Heitman Global Real Estate Securities Strategy
39
Three YearThree Year Annualized ex-post
Total Return Total Return FTSE EPRA/NAREIT Total Composite Total Firm Percentage Annualized ex-post Standard DeviationNet of Fees Gross of Fees Developed Index Number of Standard at End of Period at End of Period of Firm Standard Deviation FTSE EPRA/NAREIT
Year (percent) (percent) (percent) Portfolios Deviation ($millions) ($millions) Assets Composite Developed Index
2011 -2.88 -2.65 -5.82 less than 5 N/A 126 2,398 5.25 N/A N/A
2012 28.03 28.35 28.65 less than 5 N/A 222 2,440 9.10 N/A N/A
2013 4.63 4.93 4.39 6 N/A 408 2,176 18.75 16.53 16.43
2014 18.07 18.49 15.89 7 0.29 740 3,217 23.00 12.40 12.48
2015 1.25 1.58 0.05 7 0.25 776 3,371 23.03 12.31 12.27
2016 3.55 3.89 4.99 7 0.21 725 3,782 19.17 11.97 12.22
2017 10.06 10.45 11.42 7 0.28 742 4,626 16.04 10.71 10.91
2018 -4.15 -3.77 -4.74 10 0.2 828 5,424 15.27 10.78 11.01
2019 24.20 24.71 23.06 8 0.13 790 6,219 12.70 9.72 9.75
1. Heitman Real Estate Securities LLC (“HRES”) is an investment adviser specializing in the investment of equity, convertible and debt instruments of North American and European publicly traded real estate related companies (REITs – real estate investment trusts and REOCs – real estate operating companies). Heitman International Real Estate Securities HK Limited (“HIRES HK”) is an investment adviser specializing in the investment of equity, convertible and debt instruments of Asia / Pacific publicly traded real estate related companies. Heitman International Real Estate Securities Pty Limited (“HIRES PTY”) is an investment adviser specializing in the investment of equity, convertible and debt instruments of Asia / Pacific publicly traded real estate related companies. HRES and HIRES PTY HIRES HK (collectively, “Company”) are limited liability companies whose sole member is Heitman LLC. The members of Heitman are KE I LLC and KE 2 LLC, both members are comprised of a group of key Heitman employees.
2. This composite includes all discretionary, global strategy clients benchmarked to the FTSE EPRA/NAREIT Developed Index.
3. The Company claims compliance with Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with GIPS standards. The Company has been independently verified for the periods of January 1, 1993 through December 31, 2019. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The Global Real Estate Securities Composite (the “Composite”) has been examined for the periods of January 1, 1991 through December 31, 2019. The verification and performance examination reports are available upon request.
4. Trade date settlement valuation is used and dividends are recorded on “ex-date” for this composite. This composite is denominated in US dollars.
5. The FTSE EPRA/NAREIT Developed Index is a market cap weighted index of publicly traded REITs and REOCS from around the world. The Indices are presented for illustrative purposes only and are not intended to imply Heitman’s past or future performance. The performance of the Indices assumes dividend reinvestment, but do not reflect transaction costs, advisory fees, custodian fees, trading costs and other costs of investment. Individuals cannot directly invest in the indices described above.
6. The dispersion of annual returns is measured using a simple annual standard deviation of accounts in the composite for the entire year. For the purpose of this presentation, a significant population count is defined as more than 5 accounts in the composite. Periods with five or fewer accounts are marked “N/A”.
7. Accounts are included in this composite the first full month under management. Terminated accounts are included in this composite through completion of their last full month under management. This composite was created in September 2017.
8. Current representative fee schedule is as follows: first $25 million – 0.65%; over $25 million to $100 million – 0.55%; over $100 million to $250 million – 0.50%; over $250 million – 0.45%. Advisory fees are described in Part II of Form ADV (copy available upon request).
9. Performance results presented gross and net of management fees. Gross of fees performance is presented before management fees, but after all relevant trading expenses and all applicable non reclaimable withholding taxes. Net of Fees performance is presented after management fees and any performance fees, all relevant trading expenses and other expenses that may be incurred in the management of an account and all applicable non reclaimable withholding taxes. Composite descriptions, policies for calculating performance, preparing compliant presentations, and valuing portfolios are available upon request. Past performance is no guarantee of future results. Advisory fees are described in Part II of Form ADV (available upon request).
Attribution Analysis
1. The results are gross of fees and calculated based on transactions. The results may vary slightly from the actual returns due to rounding, intra-day trading and fees.
2. Please note that the portfolio’s performance as represented in this file is preliminary and may vary from the official result.
3. Attribution analysis are performed on a representative account in a strategy and not on the entire constituents of a strategy’s composite. Therefore, there may be a disparity between the returns calculated through the attribution analysis for a representative account and a composite.
40
IMPORTANT NOTICE AND DISCLAIMER
− This confidential presentation and the information set out herein (the “Presentation”) is summary in nature only and is qualified in its entirety by the information set out in the confidential private placement memorandum or other formal disclosure document (the “Disclosure Document”) relating to the potential opportunity described herein (the “Opportunity”).
− This Presentation has been provided to the recipient by Heitman, one of its affiliates or one of its affiliates as a sponsor (the “Sponsor”) and is only intended to assist sophisticated professional investors in deciding whether they wish to consider reviewing the Disclosure Document. This Presentation is meant for use in one-on-one presentations with sophisticated professional investors. However, the contents of this Presentation are not to be construed as investment, legal or tax advice and do not consider the particular circumstances specific to any individual recipient to whom this Presentation has been delivered. The recipient should obtain advice from the appropriate qualified experts. Further, the Sponsor is not acting in the capacity of a fiduciary of any recipient of this Presentation.
− This Presentation is furnished on a strictly confidential basis to sophisticated professional investors. None of the information contained herein may be reproduced or passed to any person or used for any purpose other than for the purpose of considering the Opportunity. No approach of any kind may be made by any officer, employee or adviser of the recipient of this Presentation to any officer, employee, customer or supplier of the Sponsor without the prior written approval of the Sponsor. Notwithstanding the foregoing, recipients (and each employee, agent or representative of any recipient) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of an investment described herein and all materials of any kind (including opinions or other tax analyses) that are provided that relate to such tax treatment or tax structure, except to the extent maintaining such confidentiality is necessary to comply with any applicable securities laws. The foregoing language is not intended to waive any confidentiality obligations otherwise applicable, except with respect to the information and materials specifically referenced in the preceding sentence. By accepting delivery of this Presentation, each prospective investor agrees to the foregoing.
− Any opinions, forecasts, projections or other statements, other than statements of historical fact, that are made in this Presentation are forward-looking statements. Although the Sponsor believes that the expectations reflected in such forward-looking statements are reasonable, they do involve a number of assumptions, risks and uncertainties. Accordingly, neither the Sponsor nor any of its affiliates makes any express or implied representation or warranty, and no responsibility is accepted with respect to the adequacy, accuracy, completeness or reasonableness of the facts, opinions, estimates, forecasts, or other information set out in this Presentation or any further information, written or oral notice, or other document at any time supplied in connection with this Presentation, and nothing contained herein or in the Disclosure Document shall be relied upon as a promise or representation regarding any future events or performance. Past returns from investment in real estate (or real estate related investments) are no guarantee that the same (or enhanced) returns from real estate (or real estate related investments) will be achieved in the future.
− The recipient’s attention is specifically drawn to the risk factors identified by the Sponsor relating to the Opportunity as set out in the Disclosure Document or any other documents provided to the recipient. The Sponsor also advises that any potential investment opportunities described herein are speculative, involve a degree of risk, and there is no guarantee of performance or a return of any capital with respect to any investment.
− By accepting delivery of this Presentation, the recipient accepts the terms of this notice and agrees, upon request, to return all materials received by the recipient from the Sponsor, including this Presentation without retaining any copies thereof.
Notice and Disclaimer
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