T H I R D A V E N U E REAL ESTATE VALUE FUND Third Quarter 2018 1 CONFIDENTIAL. FOR INSTITUTIONAL/BROKER USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC.
CONTENTS Overview 3 Investment Process 7 Portfolio Characteristics 15 Performance 18 Investment Examples 22 2 CONFIDENTIAL. FOR INSTITUTIONAL/BROKER USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC.
OUR FIRM 1986 FOUNDED $3.4 billion ASSETS UNDER MANAGEMENT Real Estate, Value & Small-Cap EQUITY STRATEGIES OFFERED Affiliated Managers Group is majority shareholder; OWNERSHIP STRUCTURE 9 Third Avenue partners with average firm tenure of 15 years Three-person management committee with average Firm tenure of 14 MANAGEMENT years leads strategic direction Four-person operating committee handles day-to-day operations with average Firm tenure of 12 years 33 EMPLOYEES 13, including 10 with a Chartered Financial Analyst designation INVESTMENT PROFESSIONALS Mutual Funds VALUE EQUITY STRATEGY VEHICLES UCITS Global Real Estate Select Portfolio (Concentrated, Best Ideas) As of September 30, 2018 3 CONFIDENTIAL. FOR INSTITUTIONAL/BROKER USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC.
T HIRD AV E N UE REAL ESTAT E VALUE ST RAT EGY BACKGROUND Proven Experience and Track Record Deep Expertise Significant expertise in real estate securities analysis as well as direct experience in real estate development Portfolio Management Team Long Term Track Record Launched in 1998, our 20 year track record makes us one of the longest tenured Global Real Estate mutual funds Differentiated Approach Our strategy seeks long term capital appreciation by investing globally across an expansive universe that includes real estate and real estate- Jason Wolf, CFA Ryan Dobratz, CFA Portfolio Manager Portfolio Manager related securities and across the capital structure 24 years experience 14 years experience Joined firm in 2004 Joined firm in 2006 Named BEST GLOBAL REAL ESTATE FUND for 5 Consecutive Years 1 THOMSON REUTERS LIPPER FUND AWARDS BEST Global Real Estate Fund 1 Lipper designates award-winning funds in most individual classifications for the three-, five- and 10-year periods and fund family awards covering three years. Lipper Fund Awards are based on Lipper’s Consistent Return calculation. Lipper scores for Consistent Return reflect funds’ historical risk-adjusted returns relative to funds in the same Lipper classification and include each fund’s expenses and reinvested distributions, but exclude sales charges. Consistent Return values are calculated with all eligible share classes for each eligible classification. For the 2018 United States Lipper Awards, TAREX was the top performer among 33 funds in Lipper’s Global Real Estate category based on five-year risk-adjusted performance. For the 2017 Switzerland Lipper Awards, TAREXU was the top performer among 28 funds in Lipper’s Global Real Estate category based on fiver-year risk-adjusted performance. For the 2016 US Lipper Awards, TAREX was the top performer among 33 funds in Lipper’s Global Real Estate category based on five-year risk-adjusted performance. For the 2015 US Lipper Awards, TAREX was the top performer among 36 funds and 103 unique share classes in the Global Real Estate Category based on three-year risk-adjusted performance. For the 2014 US Lipper Awards, TAREX was the top performer among 92 funds in Lipper’s Global Real Estate category based on three-year risk-adjusted performance. 4 CONFIDENTIAL. FOR INSTITUTIONAL/BROKER USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC.
T HIRD AV E N UE REAL ESTAT E VALUE ST RAT EGY KEY DIFFERENTIATORS Value Investor with a Long Term Horizon We limit our investments to long-term value opportunities applying A Differentiated, Value- Third Avenue’s investment philosophy for equity and debt investments as the foundation Oriented Approach to Focus on Total Return Global Real Estate Our investment return objective is focused on tax-efficient total return with a primacy on capital appreciation over current income Investing Expansive Real Estate Universe Our investment opportunities include REOCs, REITs, land developers, homebuilders, real estate brokerage, companies with substantial real estate holdings (e.g., retailers, timber companies), and real estate related debt securities when we can earn equity-like returns Active Portfolio Management We actively manage the portfolio by prudently concentrating on our highest conviction ideas, hedging where appropriate, and holding cash when there are fewer buying opportunities 5 CONFIDENTIAL. FOR INSTITUTIONAL/BROKER USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC.
T HIRD AV E N UE REAL ESTAT E VALUE ST RAT EGY VALUE OF $100K From September 1998 to September 30, 2018 1 Third Avenue Real 900 Estate Value Fund 800 $717,413 700 FTSE EPRA/NAREIT Developed 600 Real Estate Index $581,859 500 400 S&P 500 $418,599 300 200 100 0 TAREX NAREIT S&P 500 Source: FactSet Portfolio. 1 Inception Date: September 17, 1998. The gross expense ratio for the Fund’s institutional, investor and z share classes is 1.11%, 1.36% and 1.01%, respectively, as of March 1, 2018. The FTSE EPRA/NAREIT Developed Real Estate Index was developed by the European Public Real Estate Association (EPRA), a common interest group aiming to promote, develop and represent the European public real estate sector, and the North American Association of Real Estate Investment Trusts (NAREIT), the representative voice of the US REIT industry. The index series is designed to reflect the stock performance of companies engaged in specific aspects of the North American, European and Asian Real Estate markets. The Index is capitalization-weighted. The S&P 500 Index is a widely recognized benchmark of U.S. stock market performance that is dominated by the stocks of large U.S. companies. The S&P 500 index is a registered trademark of McGraw-Hill Co., Inc. The S&P 500 Index is not a security that can be purchased or sold. The Indices are not securities that can be purchased or sold, and their total returns are reflective of unmanaged portfolios. The returns include reinvestment of interest, capital gains and dividends. Performance is shown for the Third Avenue Real Estate Value Fund (Institutional Class). Past performance is no guarantee of future results; returns include reinvestment of all distributions. The above represents past performance and current performance may be lower or higher than performance quoted above. Investment return and principal value fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. For the most recent month- end performance, please visit the Fund’s website at www.thirdave.com. 6 CONFIDENTIAL. FOR INSTITUTIONAL/BROKER USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC.
INVESTMENT PROCESS 7 CONFIDENTIAL. FOR INSTITUTIONAL/BROKER USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC.
IN V EST MEN T PROCES S INVESTMENT PROCESS Universe $2.9 Trillion Global Opportunity Set Idea Generation Proprietary quantitative and qualitative screens Ongoing monitoring of reserve list and current holdings Fundamental Analysis Full assessment of company’s balance sheet, business risks, long-term growth potential, and fundamental valuation Security Selection Highest conviction ideas added to inventory or Portfolio, based on valuation Portfolio Construction Concentrated with 30-40 names; top 10 typically account for up to 50% of Portfolio Sell Discipline Trim or exit position based on valuation targets and portfolio construction goals 8 CONFIDENTIAL. FOR INSTITUTIONAL/BROKER USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC.
IN V EST MEN T PROCES S EXPANSIVE INVESTMENT UNIVERSE 34% $2.9 Trillion Real Estate Operating Companies $1 trillion market cap Global Opportunity Set 34% o 650+ companies, market cap above $1 bn, select markets 1 Real Estate Related Companies 3 o Only 200 companies in our universe overlap with the FTSE EPRA/ NAREIT $1 trillion market cap Developed Real Estate Index 2 31% Real Estate Investment Trusts $900 billion market cap 1. The Fund invests only in markets in countries with minimal political and legal risk and provide shareholder protection in the form of high transparency, English language disclosures, audited financials and other regulatory protections. 2. The FTSE EPRA/NAREIT Developed Real Estate Index. The index series is designed to reflect the stock performance of companies engaged in specific aspects of the North American, European and Asian Real Estate markets. The Index is capitalization-weighted. 3. A company is considered a real estate-related company if at least 50% of its gross revenue or net profits at the time of investment are derived from providing goods (e.g., building materials and/or supplies) or services (e.g., consulting, property management, brokerage, leasing, appraisals or insurance) to the real estate industry. 9 CONFIDENTIAL. FOR INSTITUTIONAL/BROKER USE ONLY. NOT FOR DISTRIBUTION TO THE PUBLIC.
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