INVESCO Real Estate INVESCO Core Real Estate¢â‚¬â€œU.S.A. 2006-07-28¢  -9-INVESCO Core Real Estate-U.S.A

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  • INVESCO Real Estate

    INVESCO Core Real Estate–U.S.A.

    Dallas • San Francisco • Orange County • New York • Atlanta London • Paris • Munich • Prague • Madrid • Hong Kong

    Statements contained in this Presentation that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of the Manager partner of the Fund. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. Additionally, this Presentation contains “forward-looking statements.” Actual events, diversification expectations or results or the actual performance of the Fund may differ materially from those reflected or contemplated in such forward-looking statements.

    August 2, 2006

    Fresno County Employees’ Retirement Association

  • -2-

    INVESCO Overview Section 1

    Investment Process Section 2

    INVESCO Core Real Estate–U.S.A. (“ICRE”) Section 3

    Performance Section 4

    Property Sector Summary Section 5

    Portfolio Activity Section 6

    Appendix - Terms - Strategy Process - 2005 Transactions - Investment Process

    Table of Contents

    CONFIDENTIALITY NOTICE: All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments there are associated inherent risks. Please obtain and review all financial material carefully before investing. This publication may contain confidential and proprietary information of INVESCO Institutional and/or AMVESCAP. Circulation, disclosure, or dissemination of all or any part of this material to any unauthorized persons is prohibited. Unauthorized reproduction or distribution of all or any part of this material is prohibited.

  • SECTION 1: INVESCO Overview

  • -4-

    As of June 30, 2006 in US$bn

    San Francisco

    Orange County Dallas

    New York

    Atlanta

    London

    Madrid

    Prague

    Munich

    Hong Kong

    INVESCO Real Estate

    U.S. Direct Real Estate Investments — $10.8 BN Under Management — Since 1983

    Real Estate Securities Management — $8.0 BN Under Management — Since 1988

    European Direct Real Estate Investments — $8.4 BN Under Management — Since 1996

    Paris

    $27.2 Billion Under Management 191 Employees Worldwide

  • -5-

    INVESCO’s Direct Real Estate U.S. Lines of Business

    * As of 6/30/06

    Open-end Core Fund Open 8 Public Pension Plans $1.3 Billion to Date 3 Private Trusts 3 Taft-Hartley 2 Corporate Pension Plans 2 Foundation/Endowment

    Separate Accounts Open 12 Public Pension Plans $6.3 Billion Core 2 Corporate Pension Plans $1.5 Billion Value-Added 2 High Net Worth Groups 2 Foreign Investors 1 Endowment

    Closed-end Value-Added Fund Closed 6 Foundations and Endowments $569 Million 5 Public Pension Plans 4 Corporate Pension Plans 4 High Net Worth Groups 2 Foreign Investors 1 Taft-Hartley

  • SECTION 2: Investment Process

  • -7-

    INVESCO Core Real Estate-U.S.A.

    Core real estate strategy Diversified portfolio of institutional quality properties 30% maximum leverage

    PORTFOLIO STRATEGY

    Exceed NCREIF over 3 and 5 year rolling basis

    Objective:

    Property Type Allocation

    Market (MSA) Allocation

    Property Specific

    Selection

    Execution of Property Business Plan

    Long-term property type strategic ranges

    Overweight-industrial and multi-family Equal weight-retail Underweight-office

    INVESCO Qualified Market Rankings

    On the Ground Real Estate Expertise and Market Coverage

  • SECTION 3: INVESCO Core Real Estate–U.S.A. (“ICRE”)

  • -9-

    INVESCO Core Real Estate-U.S.A. PORTFOLIO SUMMARY

    •43 investments •Size range from $6.6 million to $115 million

    •Portfolio Occupancy = 93% •Cash =2.3% of NAV

    •Debt to total fund assets = 25%2

    •Weighted average interest rate is 5.7%

    Gross Asset Value $1,336,920,000

    Leverage & Liabilities 364,510,0001

    Net Asset Value $972,410,000

    1 $249,618,000 – market value of permanent debt $ 79,000,000 – short-term line of credit $ 35,892,000 – other liabilities

    2 19% without line of credit

    06/30/06

    Source: INVESCO Real Estate Accounting, internal, unaudited results as of 06/30/06

  • -10-

    Core Fund Portfolio Diversification

    Property Type Mix INVESCO Target Range Target*

    * Target diversification may change based on changing market conditions.

    AS OF JUNE 30, 2006

    36%

    15% 19%

    30% 32%

    11%

    22%

    35%

    0%

    10%

    20%

    30%

    40%

    50%

    West South Midwest East

    INVESCO Core Real Estate-U.S.A. @ 6/30/06 NCREIF @ 6/30/06

    NCREIF Region Mix

    23%24%26% 27%

    38%

    23%21% 18%

    0%

    10%

    20%

    30%

    40%

    50%

    Industrial Multi-Family Retail Office

    INVESCO Core Real Estate-U.S.A. @ 6/30/06 NCREIF @ 6/30/06

    Source: NCREIF Index as of 6/30/06

    This analysis represents the Core Fund portfolio as of 6/30/06 using gross property value. Regional allocation versus NCREIF allocation is shown for informational purposed only and does not reflect an specific regional allocation decision. Information is taken from sources believed to be reliable, but accuracy cannot be guaranteed.

  • -11-

    ICRE – 2006 Q3 Update

    Current Net Asset Value June 30, 2006 $ 972,410,000 18 July 1, 2006 Capital Call 131,235,000 5

    $1,103,645,000 23 Investor Commitments

    Signed $ 253,400,000 6 (new) In Documentation 165,000,000 8

    $ 418,400,000 14

    Fully Invested NAV 1 $1,522,045,000 37 Gross Potential Fund Size 1, 2 $2,144,824,000

    Net Asset Value Investors

    1 At Current Valuations 2 Fully Invested With Available Debt Capacity

    STATUS OF ICRE AS OF JUNE 30, 2006

  • -12-

    $2.5 billion

    $1.75 billion

    $1.34 billion

    0 250 500 750

    1,000 1,250 1,500 1,750 2,000 2,250 2,500

    Core Fund Portfolio Year End 2006* Year End 2007*

    IN VE

    SC O

    F un

    d Si

    ze (G

    ro ss

    V al

    ue )

    $ M

    illi on

    s

    Fund Business Plan

    Fund Investment

    Strategy

    * Source: INVESCO Real Estate projections. Information is taken from sources believed to be reliable, but accuracy can not be guaranteed. All values are approximate and asset growth is estimated.

    50 Invest- ments

    Projected Fund

    Growth

    Portfolio Design – Maintain overweight to apartment and industrial – Maintain neutral weight to retail – Maintain underweight to office – Neutral weighting relative to NCREIF regions

    Asset Size – Target investments in $25-100 million range

    Performance – Total return to exceed NCREIF Property Index (NPI) over 3 and 5 year rolling basis – INVESCO expects to generate excess return through strategic property sector

    weightings, market selection and specific property selection

    (as of 06/30/06)

    65 Invest- ments

    43 Invest- ments

  • SECTION 4: Performance

  • -14-

    INVESCO Core Real Estate-U.S.A. PERFORMANCE AS OF JUNE 30, 2006

    ICRE 1Year Rolling – Gross 6.87% 16.38% 24.09%

    ICRE 1 Year Rolling – Net 6.16% 16.38% 23.28%

    NCREIF NPI 6.43% 11.69% 18.68%

    ICRE Annualized Since Inception (4Q04-2Q06) – Gross 7.40% 14.59% 22.79%

    ICRE Annualized Since Inception (4Q04-2Q06) – Net 6.69% 14.59% 22.00%

    NCREIF NPI 6.71% 11.66% 18.92%

    Income Appreciation Total

    Return

    Investment Level Returns (Leveraged)

    This chart reflects the actual fund performance of the INVESCO Core Real Estate-U.S.A., LLC as of 6/30/06. The fund inception date is 9/30/04. The returns are leveraged total returns, calculated at an investment level following the Modified Dietz methodology. The net of fee returns are based on the actual fees charged to current fund investors. Future investor’s fees could differ based on the size of their investment. The highest potential fee would be 1.1% of NAV assuming a minimum investment of $5 million. Please see fund documents for more detailed information on fund fees. The NCREIF Property Index (NPI) is shown for illustrative purposes only and is not directly comparable to fund returns as it is reported on an unleveraged, property level basis.

    An investor should only invest in the Fund as part of an overall investment strategy and should not construe that the performance of earlier investments by INVESCO as providing any assurances regarding the future performance of the fund. There can be no assurance that the Fund will meet its investment objective.

    Investment funds are speculative and involve a high degree of risk. Real property investments are subject to varying degrees of risk including market, leasing and environmental risks; an investor could lose all or a substantial amount of its investment; there is no se