ASB Allegiance Real Estate Fund

38 Pages·2016·2.65 MB·English

by  Molly Klein

SECOND QUARTER 2016
ASB Allegiance Real Estate Fund
A $6.5 billion open-end, core U.S. real estate fund
building on three decades of performance
PRESENTATION TO: Imperial County Employees’ Retirement System
Frank Nigro
Vice President
Client Service
[phone]
August 17, 2016
ASB Allegiance Real Estate Fund
ASB Allegiance Real Estate Fund Competitive Advantages
The Allegiance Fund is the flagship product of ASB Real Estate Investments and the company’s exclusive core
investment vehicle.
OUTPERFORMANCE
• Top quartile NCREIF Fund Index-ODCE returns for the one-, three-, five-, seven- and ten-year periods
• Outperformed NCREIF Fund Index-ODCE Equal-Weight in nine of the last ten years
PROVEN PORTFOLIO STRATEGY
Growing net operating income through focusing on real estate fundamentals:
• Invest in leading demand-driven urban/infill markets
• Select investments with tenant-oriented competitive advantages
• Disciplined sales analysis
VETERAN PORTFOLIO MANAGEMENT TEAM
• Company leaders run the Allegiance Fund, averaging over 11 years managing the portfolio
• No conflicts with other competing core mandates
• Cross-functional investment professionals
ASB Allegiance Real Estate Fund 1
To ensure comparability, the returns in this presentation (unless otherwise noted) are portrayed as gross of investment
management fees. As a result, the following disclosures are made:
• ASB Capital Management LLC claims compliance with the Global Investment Performance Standards (GIPS®).
• The last section of the Appendix of this presentation contains a GIPS compliant report of the ASB Core Real Estate Composite
which includes the verification and examination statements. The verification and examination opinion letters are available upon
request. The body of the presentation contains supplemental information for GIPS purposes. A complete list of all of ASB
CapitalManagement’s composites and their descriptions is available by contacting 240-482-2900.
• The investment performance is presented gross of fees. Actual client performance will be reduced by investment management
fees. In order to illustrate the performance effect of investment management fees, comparative ASB Core Real Estate
Composite gross and net of investment fee returns are included in the Appendix of this presentation. Past performance is not
necessarily indicative of future results.
• Our investment management fees are described in ASB Capital Management’s ADV and in the Appendix of this presentation.
• All materials in this presentation are supplemental to the GIPS compliant presentation included in the Appendix.
The information provided in this booklet should not be used for any other purpose unless expressly authorized by ASB Capital Management, LLC ®
ASB Allegiance Real Estate Fund 2
I. Overview of ASB Real Estate Investments
Station Landing Apartments
Boston, MA
ASB Allegiance Real Estate Fund 3
About ASB Real Estate Investments*
• A division of ASB Capital Management founded in 1983
• An SEC registered investment advisor ASSETS UNDER MANAGEMENT
• Offices in Washington, D.C. and San Francisco
$6.8 Billion (Gross)
− 42 employees
194 Assets
− Key senior management together for over a decade
15 U.S. Markets
• Two institutional funds and one separate account
− 366 institutional investors 13.4 Million SF
• Invests in institutional quality office, industrial, retail and
multifamily assets
*As of 6/30/16
ASB Allegiance Real Estate Fund 4
ASB Allegiance Real Estate Fund – Investor Base (as of 4/1/16)
• Total investment equity of $5.2 billion from over 300
investors
• ASB Allegiance Fund’s growing investor base includes the
Top-10 Public/Corporate/E&F Clients
following investor types:
NAV
% of
Including
− 37 Public Pension Plans Plan Description Fund +
Unfunded
Unfunded
− 12 Endowments and Foundations ($ millions)
1 Public Workers' Comp Plan 272.2 4.7%
− 11 Corporate Pension Plans
2 California County Retiree Plan 159.2 2.7%
− 2 International Investors 3 Insurance General Account 100.4 1.7%
4 Top-10 Public Plan 95.3 1.6%
• Public Pension Plans comprise two of the Fund’s largest
5 California County Retiree Plan 61.6 1.1%
three investors 6 International Public Plan 52.8 0.9%
7 Fortune 50 Corporate Pension Plan 51.6 0.9%
• Public investors represent ten states: Florida, 8 State Infrastructure Plan 32.0 0.5%
9 Corporate Pension Plan 31.6 0.5%
Pennsylvania, California, Ohio, Wisconsin, Michigan,
10 Swiss Corporation Pension Account 31.2 0.5%
Arizona, Texas, Louisiana, Massachusetts and Virginia Other Investors 179.6 3.1%
Total $ 1 ,067.6 18.3%
• Notable investors include:
− Top-5 Health Insurer General Account
− Top-10 Public Pension Plan
− Fortune 50 Corporate Pension Plan
• The Fund’s LP Advisory Board is comprised of
representatives of three Public Pension Plans and three
Taft-Hartley Plans
ASB Allegiance Real Estate Fund 5
II. ASB Allegiance Real Estate Fund -- Performance
455 Massachusetts Avenue, NW
Washington, D.C.
ASB Allegiance Real Estate Fund 6
ASB Real Estate Investments Imperial County Employees Retirement System
Quarterly Review for Periods Ending 6/30/16 CH500009
Fund NAV: $5,404,933,487.57 LP Unit Value: $1,383.054 Client Outstanding LP Units: 22,023.262
ASSET GROWTH SUMMARY
3 Months 12 Months Inception date for your plan was:
Beginning Partner's Capital $30,059,217 $27,283,315 January-13 12/31/2012
Net Contributions / (Withdrawals) $0 $0
Net Income $244,177 $922,359 Fund Return Since Client Inception
Gains and Losses1 $155,966 $2,253,686 (annualized if greater than 1 year) 13.51%
Net Cash Dividend2 $0 $0
Ending Partner's Capital $30,459,360 $30,459,360
Cash Balance (Pending Settlements) $0 $0
Total Partner's Assets $30,459,360 $30,459,360
PERFORMANCE SUMMARY3
3 Months YTD 1 Yr 3 Yrs 5 Yrs 7 Yrs 10 Yrs
ASB Allegiance Real Estate Fund 1.33% 2.92% 11.64% 14.04% 13.72% 11.90% 7.64%
NCREIF Fund Index - ODCE - Equal Weight4 N/A N/A N/A N/A N/A N/A N/A
NCREIF Fund Index - ODCE - Value Weight4 N/A N/A N/A N/A N/A N/A N/A
ALLOCATION PROFILE GEOGRAPHIC PROFILE
Allegiance NFI-ODCE VW Allegiance NFI-ODCE VW
Office 37.4% N/A East 43.9% N/A
Industrial 16.7% N/A Midwest 11.7% N/A
Residential 17.4% N/A South 11.0% N/A
Retail 28.6% N/A West 33.4% N/A
Land 0.0% N/A Note: This analysis excludes non-real estate assets.
Hotel N/A N/A
Other N/A N/A
Cash 1.1% N/A
Note: Percentages are calculated NET of cash as per NFI-ODCE reporting format
1After all fees and costs except investment management fees.
2Net cash dividend represents asset management fees paid from the dividend plus the net cash dividend paid to the investor.
3Past performance is not necessarily indicative of future results. Returns for periods greater than one year are annualized and time-weighted. Returns are before the deduction of investment advisory fees.
4As of March 31, 2009, the ASB Allegiance Fund’s benchmark for performance is the NCREIF Fund Index - Open-End Diversified Core Equity (NFI-ODCE). This index is a fund level capitalization-weighted, time-weighted
return index and includes property investments at ownership share, cash balances and leverage (i.e. returns reflect each member fund’s actual asset ownership positions and financing strategy).
ASB Allegiance Real Estate Fund 7
Performance Comes First
With a target annual return of 7% to 8.5% gross of fees, the Allegiance Fund has achieved top-quartile NFI-
ODCE performance for the one-, three-, five-, seven- and 10-year periods.
ANNUALIZED GROSS OF FEE TOTAL RETURNS ASB ALLEGIANCE FUND vs. NFI-ODCE RETURN QUARTILES
3/31/16 3/31/16
20%
• Inception to date
income return is
6.37% 15%
10%
5%
0%
QTR 1 YR 3 YR 5 YR 7 YR 10 YR
ASB Allegiance Fund 1.57% 15.91% 14.44% 14.42% 10.37% 7.88%
NFI-ODCE EW 1 2.44% 14.10% 13.57% 13.21% 8.59% 6.12%
NFI-ODCE VW 2 2.18% 13.67% 13.63% 13.26% 9.06% 6.36%
1TheNFI-ODCE Equal-Weight is a fund level equally-weighted return index and includes property investments at ownership share, cash balances and leverage (i.e. returns
reflect each member fund’s actual asset ownership positions and financing strategy).
2 The NFI-ODCE Value-Weight is a fund level value-weighted return index and includes property investments at ownership share, cashbalances and leverage (i.e. returns
reflect each member fund’s actual asset ownership positions and financing strategy).
3 Please see the ASB Core Real Estate Composite GIPS compliant presentation located in the Appendix section of this presentation.
ASB Allegiance Real Estate Fund 8
Consistent Outperformance Across Market Cycles
TEN-YEAR ANALYSIS
NFI-ODCE-EW ALLEGIANCE FUND
UP YEARS
• Strong relative performance during the downturn 2006 16.15% 18.11%
demonstrates a modest risk profile. 2007 16.08% 15.65%
2010 16.14% 17.02%
• Demonstrably provides similar outperformance in 2011 15.96% 21.02%
both up and down markets. 2012 11.03% 12.46%
2013 13.34% 13.72%
• Outperformed the NCREIF Fund Index-ODCE 2014 12.38% 13.52%
Equal-Weight in nine of the past ten years. 2015 15.17% 17.28%
Cumulative 195.71% 229.33%
Cumulative Outperformance 33.62%
# ofYears 8
Annualized Outperformance 3.69%
DOWN YEARS
2008 -10.37% -4.55%
2009 -30.65% -29.52%
Cumulative -37.84% -32.73%
Cumulative Outperformance 5.11%
1Please see the ASB Core Real Estate Composite GIPS compliant
presentation located in the Appendix section of this presentation.
# ofYears 2
Annualized Outperformance 2.52%
ASB Allegiance Real Estate Fund 9