True North IP Enhanced Property Fund True North IP Enhanced Property - PowerPoint PPT Presentation

True North IP Enhanced Property Fund True North IP Enhanced Property Fund Introduction, October 2019

Contents 1. General overview 3. Fund performance 4. Portfolio overview 5. Conclusion 1 Authorised Category II Financial Services Provider (FSP no: 42439)

Cape Town Central Business District, South Africa Warsaw Central Business District, Poland General overview 2

Fund details ASISA classification: South Africa – Real Estate General Inception date: 3 November 2014 75% SA Listed Property; Benchmark: 25% Global Property Size: R98,3 million* Risk rating: Moderate to high Management co. IP Management Company Portfolio manager Wim Prinsloo, CFA *As at 30 September 2019 3 Authorised Category II Financial Services Provider (FSP no: 42439)

Investment approach Fundamental investors: We believe that the long-term appreciation of a business’ share price is a direct result of the underlying performance of the business. Property is a pro-cyclical asset class: We target businesses that benefit from strong secular or cyclical growth trends. As such, we value future growth more highly than immediate yield. “Investment is most intelligent when it is most business - like“ - Warren Buffet 4 Authorised Category II Financial Services Provider (FSP no: 42439)

Investment approach (cont.) Stock selection: Growth potential. • Proven management & sector specialists. • Best-in-class properties. • Sound balance sheets. • Attractive valuations. • 5 Authorised Category II Financial Services Provider (FSP no: 42439)

Investment approach (cont.) Portfolio construction: Approximately 20 high-conviction holdings. • Invest long-term, but remain pragmatic. • Low turnover. • Diversify through different sectors and geographies • (not by adding more holdings). 6 Authorised Category II Financial Services Provider (FSP no: 42439)

Investment team Wim Prinsloo John Swart ` Portfolio Manager Founder & Chief Investment Officer B Compt, MBL, D Com B Com (Hons), CFA 30 yrs. experience in property investment 10 yrs. overall investment experience. and development. 6 yrs. in local and global listed property CEO of Landmark Property Investments investments 7 Authorised Category II Financial Services Provider (FSP no: 42439)

Cape Town Central Business District, South Africa Key differentiators 8

Key differentiators ✓ “Enhanced” mandate allows us the flexibility to allocate capital away from South Africa, when deemed appropriate. ✓ Targets exposure to alternative sectors of the property market such as self-storage, logistics and data centres. ✓ Exhibits substantially lower volatility than the SA Listed Property Index. ✓ Not aligned to any index. 9 Authorised Category II Financial Services Provider (FSP no: 42439)

Cape Town CBD, South Africa Fund performance As at 30 September 2019 10

Performance as at 30 September 2019 Substantial outperformance in a negative market Inception Annualised returns YTD 1 Year 2 Years 3 Years date ** TNEP Fund 10.1% 5.6% 3.0% 4.3% 2.6% Benchmark* 5.4% -0.6% -7.4% -2.1% -1.3% Outperformance +4.7% +6.2% +10.4% +6.4% +3.9% *Benchmark: 75% FTSE/JSE All Property Index, 25% FTSEE NAREIT Developed REIT Index. **Inception date: 3 November 2014. Annualised returns are period returns re-scaled to a period of 1 year. Source: Refinitiv Datastream. 11 Authorised Category II Financial Services Provider (FSP no: 42439)

Performance under current portfolio manager Timeframe: 3 Years to 30 September 2019 120 115 +13.5% 110 105 100 95 -10.2% 90 85 Sep 16 Dec 16 Mar 17 Jun 17 Sep 17 Dec 17 Mar 18 Jun 18 Sep 18 Dec 18 Mar 19 Jun 19 Sep 19 SA Listed Property Index True North IP Enhanced Property Fund Source: Refinitiv Datastream. 12 Authorised Category II Financial Services Provider (FSP no: 42439)

Performance relative to peer group Top performer in its category * over 1,2 and 3 years Timeframe** Rank 1 st of 47 Year to Date 1 st of 47 1 Year 1 st of 46 2 Years 1 st of 41 3 Years 3 rd of 38 4 Years *ASISA Category: South Africa – Real Estate – General. **Date: As at 24 September 2019. Source: Glacier Funds on Friday, Morningstar 13 Authorised Category II Financial Services Provider (FSP no: 42439)

Volatility * as at 30 September 2019 Timeframe: 36 months to 30 September 2019 13.4% 11.7% 7.7% TNEP Fund SA Listed Property Index JSE All Share Index * Volatility calculated as the annualised standard deviation over the 36 months to 30 September 2019. 14 Authorised Category II Financial Services Provider (FSP no: 42439)

Warsaw Central Business District, Poland Portfolio overview 15

Asset allocation 60% 50% Offshore Property 21.1% listed on JSE 40% 30% 20% 37.4% 28.1% 10% 13.4% 0% SA Listed Property Offshore Property Fixed Income 16 Date: 30 September 2019. Authorised Category II Financial Services Provider (FSP no: 42439)

Geographic allocation (see-through basis) Underweight exposure to SA Property mar ket Other; 4.1% Canada; 3.0% USA; 6,8% Europe; 35,2% UK; 10,1% South Africa; 28,0% Excludes % allocated to fixed income assets. 17 Date: As at 30 June 2019. Authorised Category II Financial Services Provider (FSP no: 42439)

Sector allocation (see-through basis) Healthy exposure to alternative sectors 35% 30% 25% 16% 20% 15% 10% 11% 9% 8% 13% 5% 7% 7% 5% 5% 4% 2% 0% Retail Office Industrial Self Storage Data Centres Residential Other Local Offshore Excludes % allocated to fixed income assets. Date: As at 30 June 2019. 18 Authorised Category II Financial Services Provider (FSP no: 42439)

Top 10 property holdings % of Market Name Country Sector Fund Cap 1 Sirius Real Estate Germany Diversified 7.6% £ 782m 2 Stor-age Property REIT SA/UK Self storage 6.9% R 5.5bn 3 Clearance Camino Fund Europe Diversified 6.5% $ 390.7m 4 Fairvest Property Holdings SA Retail 5.9% R 2.0bn 5 Vukile Property Fund SA/Spain Retail 6.1% R 18.2bn Date: As at 30 September 2019 19 Authorised Category II Financial Services Provider (FSP no: 42439)

Top 10 property holdings (continued) % of Market Name Country Sector Fund cap 6 Equities Property Fund SA/UK Logistics 5.7% R 11.2bn Resolution Capital Global Property 7 Global Diversified 5.6% R 795m Fund* 8 Interxion Holdings N.V. Europe Data Centres 4.6% $ 6.2bn 9 Growthpoint Properties SA/AUS/CEE Diversified 4.4% R 68.6bn 10 Irish Residential Properties Ireland Residential 4.3% € 898m * Via Nedgroup Investments Global Property Feeder Fund 20 Date: As at 30 September 2019 Authorised Category II Financial Services Provider (FSP no: 42439)

We have compiled an attractive listed property portfolio Total return Company/REIT Summary investment thesis past 3 years Earning high returns on investment by redeveloping office 98.9% and industrial properties across Germany. Trades below NAV. Self-storage sector is proving defensive in SA and UK. Able 75.7% to grow dividends by 6% to 8% p.a. Owns retail properties in lower LSM nodes not impacted by 19.8% e-commerce. Trading 20% below NAV. Provides exposure to cyclical upturn in Spanish real estate 31.9% market. Logistic properties facilitate distribution of online purchases. 71.3% Fast-growing Data Centre operator across Europe. 31.2% REIT with highest quality local portfolio on the JSE. -7.3% Investor and developer of apartments in supply-constrained 37.3% Dublin. Top 8 direct holdings as at 30 Sept. 2019. 21 Excludes sub-fund investments. Authorised Category II Financial Services Provider (FSP no: 42439) All returns in rand terms.

Warsaw Central Business District, Poland Conclusion 22

Summary ✓ Fundamental, pro-cyclical property investing. ✓ Top performance and low volatility. ✓ Differentiating features. ✓ Upside potential. Next steps? 19 23 Authorised Category II Financial Services Provider (FSP no: 42439)

Contact details Portfolio Manager: Wim Prinsloo, CFA Email: wim@tncm.co.za Phone: 012 460 5007 / 082 414 1999 Website www.tncm.co.za Date: As at 31 July 2019 Source: True North Capital Management 24 Authorised Category II FSP no: 42439