SKAGEN m 2 Statusrapport juni 2014

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1 SKAGEN m 2 Statusrapport juni 2014

2 Hovedtrekk i juni 2014 Globale eiendomsaksjer steg 3,9 prosent i juni. SKAGEN m 2 steg 3,0 prosent i den samme perioden. Fondet har hatt en godt første halvår, både absolutt og relativt. Fondet er opp 12,1 prosent så langt i år, mens referanseindeksen er opp 11,6 prosent i den samme perioden. Vi er godt fornøyd med at arbeidet med å ta ned risiko og redusere svingningene i fondet så langt ser ut til å ha den virkningen vi hadde forutsett. Det beste markedet så langt i år har vært India, som opplever medvind etter valget. India er etterfulgt av Indonesia og Tyrkia. De svakeste markedene så langt i år er fortsatt Japan og Kina. Det beste markedet i juni var Thailand. Det ser ut til at investorene har blitt vant med den militære tilstedeværelsen etter at de overtok makten, og markedet har steget. Både Ananda og Ticon Industrial var blant de beste aksjene våre i juni. Ashford Hospitality Trust var den absolutt beste bidragsyteren etter at selskapet rapporterte sterke tall for Inntekt per Tilgjengelig Rom (RevPAR) etter et sterkt første kvartal. De svakeste aksjene våre var Bekasi Fajar, General Shopping og Franshion Properties, basert i Indonesia, Brasil og Kina. Indonesia falt i juni og vi benyttet det svake markedet til å kjøpe tilbake aksjer vi tidligere hadde solgt. Grunnen til det svake markedet i Indonesia var hovedsakelig det kommende valget. Det kinesiske markedet var fortsatt svakt og Franshion var den største negative kinesiske bidragsyteren i porteføljen. DiC Asset kom inn i porteføljen i juni. Selskapet, som eier og driver tyske kontoreiendommer, har en høy gjeldsgrad. Ledelsen har gjort mange feil som blant annet å doble antallet aksjer etter finanskrisen, samtidig som de har betalt ut utbytter til aksjonærene. Men, eiendomsmarkedet i Tyskland har bedret seg, noe som gjør det letter å selge ut aktiva som ikke blir sett på som kjernevirksomhet. De kan dermed ta ned gjeldsgraden. Aksjen handles til stor rabatt. De 10 største postene er nå 32,5 prosent av porteføljen. SKAGEN m 2 består av 53 poster og 6 prosent kontanter. 2 * Med mindre annet er oppgitt er alle avkastningstallene for fondet i denne rapporten knyttet til klasse A, og er etter fradrag for gebyrer.

3 Avkastning, juni 2014 Juni Hittil i kvartalet Hittil i år Siden start* SKAGEN m 2 3,0% 9,4% 12,1% 10,9% MSCI Real Estate 3,9% 9,7% 11,6% 16,0% Meravkastning -0,8% -0,3% 0,6% -5,1% Note: Alle tall ut over 12 måneder er annualisert (geometrisk avkastning) * Startdato: 31 oktober

4 Markedenes utvikling i juni i NOK 2014 (%) Thailand India Frankrike Brasil Australia Japan Canada Sør-Afrika Vekstmarksindeksen Verdensindeksen Kina (Hong Kong) MSCI Eiendomsindeks Tyskland USA SKAGEN M2 Sverige UK Norge Singapore Philippinene Hong Kong Tyrkia Kina (lokal) Indonesia -5 4

5 Markedenes utvikling så langt i NOK i 2014 (%) India Tyrkia Thailand Indonesia Frankrike Philippinene Australia USA Tyskland Brasil UK Singapore Norge SKAGEN M2 MSCI Eiendomsindeks Canada Verdensindeksen Vekstmarksindeksen Sør-Afrika Hong Kong Kina (Hong Kong) Japan Kina (lokal)

6 Største bidragsytere i juni 2014 Største positive bidragsytere Største negative bidragsytere Selskap NOK (000) Ashford Hospitality Trust Ticon Industrial Connection Ananda Development Phoenix Mills Mercialys SA 996 Apartment Investment & Man Co 798 Brandywine Realty Trust 706 Unibail-Rodamco 663 Selskap NOK (000) Bekasi Fajar Industrial Estate -888 General Shopping Brasil -676 Franshion Properties China -650 Olav Thon Eiendomsselskap -424 Summarecon Agung -407 Shimao Property Holdings -357 SM Prime Holdings -252 Bumi Serpong Damai -205 Indiabulls Real Estate 654 Ascendas India Trust 652 Total verdiskapning i juni 2014 : NOK 16,3 millioner Note: Bidrag til absolutt avkastning 6

7 Største bidragsytere så langt i 2014 Største positive bidragsytere Største negative bidragsytere Selskap NOK (000) Ashford Hospitality Trust Apartment Investment & Man Co Summarecon Agung Phoenix Mills Deutsche Wohnen British Land Brandywine Realty Trust Mercialys Emlak Konut Gayrimenkul Ananda Development Selskap NOK (000) Franshion Properties China Ltd DLF Ltd Shimao Property Holdings Ltd Yuexiu Property Co Ltd -854 General Shopping Brasil SA -811 Columbia Property Trust Inc -762 Hovnanian Enterprices Inc -746 Global Logistic Properties Ltd -625 Ashford Hopsitality Prime Inc -616 Lippo Malls Indonesia Retail Trust -446 Total verdiskapning så langt i 2014 : NOK 61,4 millioner Note: Bidrag til absolutt avkastning 7

8 Største bidragsytere i juni 2014 Største positive bidragsytere Selskap NOK (000) Ashford Hospitality Trust Ticon Industrial Connection Ananda Development Phoenix Mills Mercialys SA 996 Apartment Investment & Man Co 798 Brandywine Realty Trust 706 Unibail-Rodamco 663 Indiabulls Real Estate 654 Ascendas India Trust 652 Sterk REVPAR (inntekt per rom) i USA. Militære tilbake ved makten i Thailand usikkerheten er redusert. Militære tilbake ved makten i Thailand usikkerheten er redusert. Ny midlertidig (militær) regjering vil sannsynligvis ha billiger boliger som en del av sine prosjekter og Ananda vil dra nytte av det. Indiske eiendomsmarkedet har vært sterkt etter valget i håp om at Modi vil foreslå og iverksette kraftige politiske reformer. Publiserte nok en gang sterke og stabile tall. Mercialys er en defensiv aksje med høy direkteavkastning i et relativt dyrt marked. Det gjør selskapet interessant for investorer på jakt etter høy direkteavkastning. I tillegg har Casino, som er stor eier og sponsor, hatt suksess og bidratt til den gode utviklingen i selskapet. Ingen spesifikke nyheter. Ingen spesifikke nyheter. Hentet billig finansiering. Annonserte potensielt nytt prosjekt i Hamburger Hafen området. Ingen spesifikke nyheter. Positiv stemning etter valget samt at selskapets annonserte en økt grense for opplåning fra 40 til 60 prosent, noe som er positivt fordi de da kan dra nytte av den positive utviklingen i det indiske markedet for kontoreiendom. Note: Bidrag til absolutt avkastning 8

9 Største bidragsytere i juni 2014 Største negative bidragsytere Selskap NOK (000) Bekasi Fajar Industrial Estate -888 General Shopping Brasil -676 Franshion Properties China -650 Olav Thon Eiendomsselskap -424 Summarecon Agung -407 Shimao Property Holdings -357 SM Prime Holdings -252 Bumi Serpong Damai -205 Bekasi Fajar Industrial Estate -888 General Shopping Brasil -676 Ingen spesifikke nyheter. Det indonesiske markedet har vært et av de sterkeste så langt i år, men har hatt litt motvind de seneste månedene. Grunnen til dette er valget i juli og at den mest reformvennlige kandidaten ser ut til å få mer motstand enn ventet. Ingen spesifikke nyheter. Det kinesiske markedet var fortsatt svakt. Skuffende tall fra Franshion, samt svakt marked, har trukket verdsettelsen ytterligere ned. Ingen spesifikke nyheter. Ingen spesifikke nyheter. Det indonesiske markedet har vært et av de sterkeste så langt i år, men har hatt litt motvind de seneste månedene. Grunnen til dette er valget i juli og at den mest reformvennlige kandidaten ser ut til å få mer motstand enn ventet. Det kinesiske markedet var fortsatt svakt. Skuffende tall fra Shimao, samt svakt marked, har trukket verdsettelsen ytterligere ned. Ingen spesifikke nyheter. Ingen spesifikke nyheter. Det indonesiske markedet har vært et av de sterkeste så langt i år, men har hatt litt motvind de seneste månedene. Grunnen til dette er valget i juli og at den mest reformvennlige kandidaten ser ut til å få mer motstand enn ventet. Ingen spesifikke nyheter. Det indonesiske markedet har vært et av de sterkeste så langt i år, men har hatt litt motvind de seneste månedene. Grunnen til dette er valget i juli og at den mest reformvennlige kandidaten ser ut til å få mer motstand enn ventet. Ingen spesifikke nyheter. Note: Bidrag til absolutt avkastning 9

10 Viktigste endringer så langt i 2014 Q1 Ca Immobillien ny Surya Semesta ut General Growth ny Lippo Karawaci ut Unibail-Rodamco ny Segro ut CBL Properties ny Bumi Serpong -- Br Properties -- Yuexiu ut Torunlar ut Lippo Malls ut DLF India ut IJM Land ut Q2 Colombia Prop. Trust ny Capitalmalls Asia ut Atrium Ljungberg ny Indiabulls -- Nomura office ny Ashford Hosp. Prime ut Etalon Group ny Lexington -- DIC Asset ny + Beholdning økt -- Beholdning redusert 10

11 Største kjøp og salg i juni 2014 Største kjøp Største salg DIC Asset (DIC GY) (nytt selskap) Selskapet gir eksponering mot tyske kontoreiendommer. De har gjort mye feil og NAV er ned 50 prosent (før utbytter, så ikke rent tap) siden slutten av De kjøpte eiendom for USD 1 mrd i Dette var hovedsakelig finansiert gjennom gjeld. Deretter kjøpte de tilbake aksjer før de til slutt var nødt til å utstede nye aksjer og hente kapital. Antallet utstedte aksjer doblet seg. De solgte også 50 prosent nye aksjer i fjor høst. Selskapet har i telefonkonferanser bekreftet at det ikke kommer flere emisjoner på noen år. Selskapet er priset til en rabatt mot NAV på 35 prosent, men med høy gjeldsgrad (det betyr at rabatten mot EV er på 12 prosent.) Indiabulls, India Dette er en aksje med store svingninger. Vi fortsatte å redusere posisjonen for å senke den totale risikoen i fondet. Selskapet kjøpte aktiva i Mayfair i London. Siden London er langt unna deres kjernekompetanse innen eiendom samt økt gjeldsgrad ser vi dette som økt risiko forbundet med investeringen i selskapet. Ticon Property fund, Thailand Vi reduserte posten for ta ned eksponeringen mot selskaper som er eksternt ledet og som har interessekonflikter. Nomura Real Estate Office Fund (8959 JP) (økt) Nomura Real Estate Office Fund (NOF), kapitalisert av Nomura Real Estate som også driver selskapet og legger aktiva inn i REIT. NOF investerer i mellomstore bygninger hovedsakelig i Tokyo (ca. 70 prosent), men også i andre store byer i Japan. Ledighetsraten er på vei ned og leieinntektene på vei opp i Tokyo. 11

12 Oppdatering om endringer i portefølesammensetning I statusrapporten for januar ble det informert om at vi startet en prosess med mål om å ta ned risiko og svingninger i porteføljen til SKAGEN m 2. Som en konsekvens av dette ble det også fortalt at vi ville redusere eksponeringen mot såkalte opportunistiske eiendomsutviklere og i vekstmarkedene. I tillegg ville fokus være mer på «verdiskapende selskaper med fysiske aktiva, som genererer inntektsstrømmer.» Intensjonen er at dette vil skape en mer robust portefølje som kan stå gjennom et vanskeligere økonomisk klima. De neste sidene viser hvordan porteføljen er endret siden januar. 12

13 30. juni Desember 2013 Den geografiske profilen til fondet er endret Asia ex Japan EMEA Japan Kjerne EU Nord Amerika Norden Perifer EU Sør Amerika Kontanter Asia ex Japan EMEA Japan Kjerne EU Nord Amerika Norden Perifer EU Sør Amerika Kontanter 13

14 det samme har de største postene i fondet 31. Desember Juni 2014 Land Postens størrelse Land Postens størrelse BRANDYWINE USA 3,5% DEUTSCHE WOHNEN Germany 3,4% MERCIALYS France 3,2% CAPITAMALLS ASIA Singapore 3,2% BRITISH LAND UK 3,0% LEXINGTON USA 3,0% GLOBAL LOGISTIC Singapore 3,0% AIMCO USA 3,0% LIPPO MALLS Indonesia 3,0% PS BUSINESS PARK USA 2,8% Vektet topp 10 31,1% General Growth Properties USA 4,0% Brandywine Realty Trust USA 3,7% Ashford Hospitality Trust USA 3,5% Deutsche Wohnen AG Germany 3,5% Columbia Property Trust Inc USA 3,1% HCP Inc USA 3,1% Apartment Investment USA 3,0% Mercialys SA France 2,9% PS Business Parks USA 2,8% British Land Co Plc UK 2,8% Vektet topp % 14

15 Største poster i SKAGEN m 2 pr. 30. juni 2014 Postens størrelse Kurs P/NAV siste Div. Yield 2014e EBITDA 2014e/EV General Growth Properties 4,0% % 2.6% 5.2% Brandywine Realty Trust 3,7% % 3.9% 7.3% Ashford Hospitality Trust 3,5% 11,54 80% 4.2% 7.8% Deutsche Wohnen AG 3,5% % 2.2% 4.9% Columbia Property Trust Inc 3,1% % 4.7% 6.3% HCP Inc 3,1% % 5.3% 6.3% Apartment Investment 3,0% % 3.2% 5.8% Mercialys SA 2,9% % 5.7% 5.6% PS Business Parks 2,8% 82,95 100% 2.4% 5.8% British Land Co Plc 2,8% 7,00 100% 3.9% 4.8% Vektet topp % 97% 3.7% 6.0% Vektet topp % 3.7% 7.3% Benchmark 3.3% 15

16 Geografisk fordeling SKAGEN m 2 vs. referanseindeksen (%) 51 Fond Indeks Asia ex Japan EMEA Frontier Markets Japan Kjerne EU Nord Amerika Norden Perifer EU Oceania Sør Amerika Kontanter 16

17 Selskapsresultater og annen informasjon - på engelsk

18 Key earnings releases and corporate news June Gecina, France (1.1%) BR Properties, Brazil (1.1%) Metrovacesa sold their 26.7% stake in Gecina. Summary: The Spanish property developer and main shareholder has agreed to sell its shares at a 16% discount to end of day price. Norges Bank is one of the buyers and bought 9% of the company which is mainly prime office in Paris. Implications for the investment case: One of the triggers is to remove uncertainty regarding shareholder structure. However, the company is not priced at a discount and the relevance of this trigger can be discussed. We are surprised by the large discount the shares have been sold at. We think it is positive that the uncertainty is removed, but the share price had moved up ahead of this event. Big interim cash dividend after sale to GLP. Summary: The company announced the completion of the sale of industrial warehouse assets to the GLP group (Global Logistic Properties Limited), to the tune of BRL 2,345 million. The deal has been split into two tranches due to anti-trust issues. Certain assets overlapping with GLP s current portfolio, representing BRL 834 million, will be transferred later, subject to additional studies from CADE (Brazil anti-trust agency) regarding concentration. However, given the fragmentation of the warehouse market in Brazil, CADE will most likely also approve this second tranche. The company announced that they had approved the payment of dividends of BRL 5.50 per share (30% of share price). Implications for the investment case: The holding was significantly reduced. Ashford Hospitality Trust, US (3.5%) Strong US RevPar number 2QTD. Summary: The RevPar growth in 2Q has been stronger than expected and is now +8.4%. In comparison, during 1Q, this was +6.6%. The numbers have exceeded expectations and pushed hotel stocks higher after a slow start to the year. The main reason for the strong number is the lack of supply. Most of supply is located in New York (+7%), which still gets healthy increases in RevPar. Implications for the investment case: 1Q results were impressive. The stock has continued its good performance based on improving industry numbers in 2Q, and has been our best contributor. It operates in a highly cyclical business and we have to consider when to jump off the moving train. It is easy to conclude that things are different (no supply upcoming), but the difference also includes extremely low interest levels. It is worth questioning how long hotel companies are able to continue pushing rates in the absence of serious cost pressure. We decided to maintain our weight. 18

19 Key earnings releases and corporate news June (cont.) Olav Thon, Norway (2.4%) Hovnanian, US (0.8%) Indiabulls, India (0.6%) Bought shopping malls in Sweden. Summary: Olav Thon has bought 5 shopping malls from Steen & Strøm financed by debt. The deal is expected to increase EPS by 2-3 NOK per share. Implication for the investment case: It is positive that they are prioritising expanding into the Nordics over further investment in secondary locations in Norway (given that this is the alternative due to Norwegian regulation). We also like that they do not issue equity, making the deal share accretive. This is the second move (splitting shares was the first) in the right direction that we believe is in the interests of shareholders. Weak 2Q results and sales numbers. Summary: Hovnanian published 2Q (Feb-April) results last week, reporting significantly below expectations. However, after an initial negative reaction, the share recovered (before trading down again). The company s sales pace in April and May disappointed. The good news was better than expected gross margins of 17.4%, but the bad news was higher SG&A of 10.9%. In addition, the corporate financing cost was 8%. The company still expects to be profitable for FY14, but in line with FY13, with no growth as a result. The company spent $105m on land and land development vs. $182m last quarter, as cash decreased by $45m to $243m. This is still above their target cash level. ($ m) Implications for the investment case: Despite disappointing results, the demand and supply story is favourable and worth the risk. The company has experienced operational difficulties in line with peers. Due to higher leverage, they had suffered more. We are keeping the holding on the long-term demand/supply story. After the release of 2Q results, new home sales rose 16.8% YoY in May, the strongest gain since After a lot of bad news for house-builders, this was a surprise for the market and caused a rally in house-builders shares. Hovnanian was up 20% in 5 days. Bought Mayfair (London) property for 150m. Summary: IBREL has purchased a property for GBP 150m (40% of their market cap) in London located in the Mayfair area, with a land area of 87.4 sqft. (8100 m 2 ). Implications for the investment case: The transaction is a long way from their core geographical focus in India, and it is not easy to understand the motivation for it. It will increase their debt level significantly. Excess cash would have been better spent on buying assets in India. Given that the company recently turned cash flow positive, we would prefer that they reinvest into Indian projects or return cash to shareholders. We reduced the position at the beginning of July. 19

20 Key earnings releases and corporate news June (cont.) Nomura Real Estate Fund, Japan (8959 JP- 2.0%) IRSA, Argentina (1.2%) Reported H in line. Summary: NOF reported half year results for 2014 in line with expectations and operationally in line with last quarter. Operating revenues came in slightly below last quarter, operating income was in line QoQ. Distribution came in at 10,000 yen, representing a dividend yield of 4.5% (FY). The company is guiding an increase in revenues of 6.6%, net income of 6.7% and a distribution of 10,400 for the next quarter. During the period Eq/ tot. assets decreased from 53.3% to 49.5%..Implication for the case: This was an expected utcome. Next quarter, the assets bought recently will be fully operational contributing to the growth in revenues and income. NOF still has financial scope for additional smaller acquisitions. Last week we experienced the first YoY upturn in average CBD Tokyo office rents in five years and five months. This is encouraging and will likely continue, following the decreased vacancy rates that we have seen since mid-may It was also reported last week that Tokyo cap rates declined to 4.3% in 1Q2014. Jones Lang LaSalles recent quarterly report showed Tokyo prime office space as one of the most attractive in the region, with a 310 bps yield spread. Ended its buyback program. Summary: IRSA announced that it had completed its share buyback program after acquiring 4.9m shares. The share is up significantly YTD and the program was ended due to too low discount, which shows a true value creation attitude. 20

21 The largest companies in SKAGEN m2 General Growth Properties (GGP), founded in 1954, is a real estate investment trust (REIT) that owns, leases, manages and develops shopping centres. The company is the second largest mall operator in the world and holds interests in 120 malls, 7 office properties and 6 other properties generating an average of USD 564 in tenant sales per square foot (malls). Brandywine Realty Trust is a self-administered, self-managed and fully integrated real estate investment trust. The Company is engaged in the ownership, management, leasing, acquisition, and development of primarily suburban office properties. It also owns an interest in and operates a commercial real estate management services company. 209 buildings with a total of 24.1m sqf (2.1m m2). 182 offices, 19 industrial and 5 mixed use in addition to 4 redevelopment / use properties. They are also part of 19 unconsolidated JVs. Deutsche Wohnen is one of the leading listed residential companies in Germany. Its operational focus is on managing and developing its residential property portfolio. The portfolio currently comprises around 150k units in total, of which 108k are in Berlin after the acquisition of GSW. Core assets are located in Greater Berlin, Rhine-Main, the Rhineland and Central Germany as well as in medium-sized German cities like Hanover/Brunswick/Magdeburg. Company offers high income predictability with low vacancy rate (2.4%). Generally good quality assets in growth regions. LTW 55% and an average loan cost of 3.3%. Ashford Hospitality Trust is a real estate investment trust (REIT) focused on investing opportunistically in the hospitality industry across all segments and at all levels of the capital structure primarily within the United States. Invests opportunistically in the whole capital structure including lending to other hotel owners. Ashford Hospitality Trust owns 115 hotels (directly and in JV with Prudential). Columbia Property Trust, Inc. focuses on the acquisition, development, ownership, leasing, and operation of office properties. Owns 59 office buildings, total of 16.5m sqf (1.6m m2) valued at $5.1bn. The company was listed without any equity issue in Oct.13 to provide liquidity for shareholders. Bought back shares during 4Q after listing. Core focus is 16 main cities throughout US. 50% CBD and 50% suburban exposure. Occupancy 92%. 21

22 The largest companies in SKAGEN m2 (cont.) HCP is a fully integrated self-administered real estate investment trust that acquires, manages, and invests in healthcare real estate located in the US and Mexico. HCP is well diversified across healthcare property types: senior housing (35% of NOI), skilled-nursing facilities (31%), medical office (13%), life science/labs (15%), and hospitals (6%). HCP has USD 22bn in AUM and a well-balanced portfolio of 1163 properties. Company has generated ~16% compound annual return since IPO in 1985, and has 29 years of consecutive dividend growth. Apartment Investment & Management is a US REIT focused on multi-family rental buildings, with some 66,000 apartments in top 20 markets. The number of apartments has been dramatically reduced since 2004 from over 160,000 (net owned) in 100 markets to today s number, of which 56 are so called Conventional and 10 Affordable. Sold off a lot of apartments in and spent $1bn on share buybacks. The company bought back 24% of outstanding shares from 2Q06 until Oct. 08, but had to issue equity at lower price in 09. Current strategy was implemented in 2005 and is to sell 2 apartments to buy 1 with better location and higher quality. PS Business Parks, Inc. is a self-advised and self-managed real estate investment trust that acquires, develops, owns, and operates 29 m sqf (2.7 m2) of commercial properties, primarily multi-tenant office industrial or "flex" space in 102 business parks in 8 states. The company s main exposure is towards California. Flex (52%), industrial (30%) and office (18%). Total occupancy 90%. Mercialys is a French shopping centre investment company with a portfolio size of EUR 2.7bn focusing on retail properties 100% located in France. With 120 locations across France, totalling a gross leasable area of 714k sqm, Mercialys is one of the major players in the French shopping centre sector. The company owns, renovates and redevelops centres in close collaboration with Groupe Casino. Mercialys was created with the transfer of 146 properties from Casino in 2005 when Casino decided to take its real estate business public via a placement. Today Casino owns 40%. Mercialys opted for the SIIC legal status in GLP is Asia's largest provider of modern logistics facilities. The company owns, manages and leases over 600 completed properties spread across more than 60 cities in China, Japan & Brazil forming an efficient network with assets strategically located in key hubs, industrial zones and urban distribution centres. The USD 17bn property portfolio comprises 23 million sqm serving more than 700 customers. The Japan portfolio is mostly completed and stabilised providing strong operating cash flow to fund the group's growing business in China. The company also set up a China fund at the end of 2013 to enable recycling in the Chinese market in line with the Japanese model. This business model leads to a more effective capital structure, recurring income and capital recycling (listing of J-REIT & CLF fund). 22

23 Additional information

24 Why invest in listed property and SKAGEN m2? Q. Why invest in listed property? Listed global real estate securities provide exposure to property but with the benefits of liquidity. Listed global real estate securities offer the ability to invest in property around the world, with the flexibility to gain exposure to opportunities that would otherwise be difficult to access. Listed global real estate securities enhance diversification Q. Why effects SKAGEN in your m2? portfolio. The fund offers a great opportunity have access to global listed real estate and use SKAGEN s unique investment philosophy, finding investments that are unpopular, undervalued and under researched. 24 2

25 SKAGEN m² Broad mandate: Daily traded mutual equity fund, investing globally in listed real estate securities, including REITs, REOCs (Real Estate Operating Companies) and developers. m 2 Recommended investment horizon: Minimum 5 years. Dividends: No dividend payut; fund proceeds are reinvested at the fund level. Benchmark: MSCI ACWI Real Estate Net Return IMI. Fee model: Fixed annual fee 1.5 %*, no entry or exit fees. Minimum first subscription: EUR 150. Launch date: 31 October *Better/worse performance in terms of unit NAV growth relative to benchmark growth is split 90/10 between unit holders and the management company. Maximum annual fee is 3% and minimum fee is 0.75%. 25 2

26 For more information please visit: Our latest Market report Information abut SKAGEN m2 on our web pages Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on market developments, the fund manager s skill, the fund s risk profile and subscription and management fees. The return may become negative as a result of negative price developments. SKAGEN seeks to the best of its ability to ensure that all information given in this report is correct, however, makes reservations regarding possible errors and omissions. Statements in the report reflect the portfolio managers viewpoint at a given time, and this viewpoint may be changed withut notice. The report should not be perceived as an offer or recommendation to buy or sell financial instruments. SKAGEN does not assume responsibility for direct or indirect loss or expenses incurred through use or understanding of the report. Employees of SKAGEN AS may be owners of securities issued by companies that are either referred to in this rapport or are part of the fund's portfolio.