1. Trends in non-listed RE Nordic pension funds March 2009

2. Trends in non-listed real estate investment strategies of Nordic pension funds Independent research under pension funds in Norway, Sweden, Denmark, Finland and Iceland  44 Nordic pension funds  AuM at least € 0.5 billion

3. Trends in non-listed real estate investment strategies of Nordic pension funds Hypothesis 1: pension funds in Nordics will increase their investments in non-listeds in coming years

4. Trends in non-listed real estate investment strategies of Nordic pension funds Hypothesis 1: Outcome:  53% of pension funds will expand investments in non-listed re  15% allready has increased investments and target is set  31% no non-listed re, no plans to invest in non-listed

5. Trends in non-listed real estate investment strategies of Nordic pension funds What about increase in non-listed RE and the crisis?  Some firmly persuit their defined policy and increase investments  Others still want to invest in non-listed RE but the timeframe?

6. Trends in non-listed real estate investment strategies of Nordic pension funds Why do pension funds invest in non-listed RE:  Because of the (relatively) high price of domestic RE  The forecast yields are perceived as attractive  The desire to diversify the portfolio globally in order to reduce risk

7. Trends in non-listed real estate investment strategies of Nordic pension funds Hypothesis 2: pension funds in Nordics manage their non- listed holdings as passive shareholders Outcome:  35% is passive shareholder  65% is active shareholder

8. Trends in non-listed real estate investment strategies of Nordic pension funds What about being active/passive shareholder and the crisis? Last yr 56.7% of the pension funds perceived themselves as passive therefore there is a rise in involvement because of the: -hurting impact of the crisis -increase of capital invested

9. Trends in non-listed real estate investment strategies of Nordic pension funds Hypothesis 3a: Nordic pension funds do not actively perform financial hold/sell analysis Outcome:  70% does not perform financial hold/sell analysis

10. Trends in non-listed real estate investment strategies of Nordic pension funds Hypothesis 3b: Nordic pension funds do not actively perform strategic hold/sell analysis Outcome:  42% does not perform a strategic hold/sell analysis

11. Trends in non-listed real estate investment strategies of Nordic pension funds strategic hold/sell analysis and the crisis:  Most of these pension funds want to execute such an analysis next year. Some of them study on how  Other pension funds will execute analysis not yearly but halfyearly next year

12. Trends in non-listed real estate investment strategies of Nordic pension funds Hypothesis 4: Nordic pension funds would not consider terminating their investments in a closed-end non-listed r.e. fund before termination date Why terminate:  Overweighted  IRR criteria are not realised Why not terminate:  Political (internal) implications  Club deal  Relational damage

13. Trends in non-listed real estate investment strategies of Nordic pension funds Hypothesis 4: Nordic pension funds would not consider terminating their investments in a closed-end non-listed r.e. fund Outcome:  Slightly shift in attitude: 2 pension funds have terminated with good experience, 3 pension funds are considering it.  Creating alpha gets more important

14. Real Estate Capital Advisors Lymos is an independent advisor for pension funds and real estate funds on strategic issues and operational issues Lymos BV Real Estate Capital Advisors WTC Schiphol Schiphol Boulevard 293 1118 BH Schiph0l The Netherlands www.lymos.eu mariette@lymos.eu

15. Trends in non-listed real estate investment strategies of Nordic pension funds  Thank you for listening! Mariëtte Meulman