Dream Hard Asset Alternatives Trust February 2015 Investor - PowerPoint PPT Presentation

Dream Hard Asset Alternatives Trust February 2015 Investor Presentation

Dream Alternatives Trust (DAT) provides investors the opportunity to gain exposure to har ard asset alte ternat ativ ive investment nts, including real estate, real estate loans and infrastructure including renewable power which are generally les ess cor orre rela lated d to the public markets and have not traditionally been available to retail investors. DAT is managed by Dream, an ex expe perie ienc nced asset ma mana nage ger with an ex exte tens nsiv ive plat atfor orm with in house expertise in real estate, development and renewable energy infrastructure. Tax ef effic icie ient distribution with an impl plie ied yi yield eld of 6.5%* (estimated to be ~ 75% return of capital in 2014). DAT is structured so that it has tremendo dous flex exib ibil ilit ity in that it does not need to comply with non-SIFT legislation or the MIC rules allowing it to take advantage of unique opportunities with limited competition that most MICs and alternative managers aren’t able to access. This allows DAT to be opportunistic and react quickly and pursue higher risk adjusted returns. Low leverage and con onserv rvat ativ ive bala lance sheet t 25% Debt to Gross Book Value. Potential for increased retu eturns and capital appreciati tion through Dream’s active manage gement as the portfolio is rebalanced. 2 *Implied yield is based on fixed distribution of $.40 per unit and TSX closing price as of February 20, 2015. Unlike fixed income securities, there is no obligation on the Trust to distribute to unitholders any fixed amount, and reductions in, or suspensions of, cash distributions may occur that would reduce the yield based on market price

Dream started as a public company in 1996 with $500,000 of equity and has grown to its current equity value of $1.1 billion representing an internal rate of return of 40%. In 2014 we renamed all our Dundee branded companies Dream. 3 *IRR (Internal Rate of Return) represents the discount rate of annual net cash paid out to shareholders and the equity value (including minority interest) as at Dec 31, 2014 over the initial investment in 2003

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Prior to starting Dream, Michael Cooper was the founder and portfolio manager of Dynamic Real Estate Fund, the first mutual fund in Canada to invest only in publicly traded real estate securities. Michael recently gave up the position of CEO of Dream Office REIT, a position he had held since the founding of the business. He has assumed the responsibilities of managing Dream Alternatives Trust (“DAT”) since its IPO on July 8, 2014 which is a key strategic focus for Dream. 5

“ Best of Dream” Fund for new opportunities. DAT has the first right to invest in any opportunities that Dream manages requiring capital from investors: Renewable power projects identified by Dream  All lending identified by Dream  And any development opportunities that Dream  finds where it is not the developer Dream has indicated that it will invest up to $50 million as lead • order over the next three years to help DAT grow, and potentially earn higher overall returns with additional capital. Michael Cooper and Dream Unlimited have purchased 87 871, 1,000* • units since inception. Additional insiders have purchased 56, 6,200* * units. 6 *Information is as at February 23, 2015

DAT is able to leverage all of Dream’s activities, relationships and expertise in one and take advantage of Dream’s expertise and track record Dream’s platform benefits DAT: Transaction expertise • Capital markets expertise • Tr Track k re record of of deve evelopment & value cre reation • Synergies realized across broad platform • Asset management capabilities • Altogether, Dream … Manages 60 million Develops $400 square feet of Has developed $300 million per year of commercial properties million a year in residential land and across three publicly renewable power housing listed REITs 7

Provide an opportunity for unitholders to invest in hard asset alternative investments Build and maintain a growth-oriented portfolio of real estate, real estate lending and infrastructure (including renewable power) assets Provide predictable and sustainable cash distributions to unitholders on a tax efficient basis; and Grow and re-position the portfolio to increase the annualized AFAD and provide the opportunity to increase distributions to Unitholders over time 8

Alternative assets have traditionally been the domain of in insti titutio ional in investors. • Different risk characteristics than stocks and bonds. • Lo Low w cor correlation with traditional asset classes can potentially lead to reduced • volatility. Real estate has the ability to act as a hedge against inflation. • We believe that investing in real estate, real estate lending and infrastructure, • including renewable power, ca can pr provide secu ecurity of ca capital l an and at attractive returns. ret 9

Current Portfolio Adjusted Net Asset Value ~ $712.2 Million * Income Prod oducin ing pro ropert rtie ies: : 19 properties co- Real Estate owned with Dream Office REIT, Canada’s largest Development office REIT. Income Properties 25% $246.1 million Income Producing 35% Lend ndin ing Port rtfoli lio: mortgage/loan investments in Lending Portfolio Properties hotel, land, multi-residential, condominium, retail, $213.5 million retirement home and commercial assets with fixed 40% 30% interest rates. Development & Real Estate Loans Investment Dev evelo lopment nt & & Investment Hold oldin ings: participating Holdings 35% mortgage and co-ownership investments in (Development & residential, mixed-use and retail development Completed) projects and the Bayfield LP Investments, $152.1 million Cash & Other 21% $64.1 million 9% Renewable le Pow Power Commitm tments ts: : operational solar power portfolio and a wind power portfolio that is under development. Renewable Power Development & Investment Holdings $19.9 million (Income Producing) 3% $15.2 million 10 2% *Net of Non-Controlling interests as at December 31, 2014 per Q4 Financial Statements.

Current trading price is at a ~ 36% discount to adjusted net asset value*. Adjusted NAV vs Current Trading Adjusted Net Asset Value* Per Segment Price** $10.00 $10.00 $9.75 $9.75 $9.00 $8.00 $8.00 36% $7.00 $6.00 discount $6.00 $6.20 $5.00 $4.00 $4.00 $3.40 $3.00 $2.91 $2.00 $2.29 $2.00 $- $0.88 $1.00 $0.27 NAVPU $- Income Lending Development Renewable Cash and NAV Per Unit Current Trading Price Properties Portfolio & Investment Power other Holdings * Based on net asset value as of December 31, 2014 as disclosed in fourth quarter Financial Statements. ** Based on net asset value as at December 31, 2014 and TSX closing price as of January 30 2015. 11 As per page 57 of the Q4 Financial Statements, the Income Properties, Development and Investment Holdings, and Cash and Other Trust Consolidated Working Capital are measured at fair value and the Lending Portfolio and Renewable Power segments are measured at amortized cost. Please see Glossary of Terms at end of presentation for definitions of terms used throughout this presentation.

Conservative Balance Sheet for our portfolio* Average Interest Rate 3.31% Net Assets (net of non-controlling interest) $712.2 million Total Assets $997.2 million Debt Contractual Value** $250.8 million Debt to Gross Book Value 25.15% Undrawn Credit Facility $50 million 12 * Values are rounded. ** Represents mortgage debt on the co-owned properties with Dream Office REIT. Mortgages have an average term to maturity of 2.2years and a weighted average effective interest rate of 3.31%. Information is as at December 31, 2014 per Q4 Financial Statements.

Based on the expected re-investment of proceeds from investments, Dream believes that the initial fixed distribution $0.40 per unit can be sustained. As the non-producing assets are liquidated over time and re- invested, the Trust is expected to produce signifi ficantly hi higher cu curr rrent retu eturns providing for an opportunity to inc ncre rease dist istributions. Once all of DAT’s assets are available for re -investment, we believe that future re retu eturns ca can be e hi higher r than they have ever been. 13 Information is as at December 31, 2014 per Q4 Financial Statements.

Over 60% of the lending portfolio Since July 8, we have already matures by the end of 2015 which increased the weighted Many of the loans which had been we expect will provide us with the average effective interest rate considered higher risk have been opportunity to reinvest the repaid. in the lending portfolio from 7.72% proceeds at higher returns . to 8.38%. Maturity Summary of Lending Portfolio $140.0 70% $120.0 60% $100.0 50% $80.0 40% $60.0 30% $40.0 20% $20.0 10% $- 0% 2015 2016 2017 Weighted Average 7.6% 7.5% 8.7% Effective Interest Rate 14 *Information is for the three months ended Dec. 31, 2014 per Q4 Financial Statements. Please see Glossary of Terms at end of presentation for definitions of terms used throughout this presentation.