Funds

Fund Structure Case Study

Facts Introduction You have been appointed on an exclusive basis to advise Crystal Property Investment Management (“the Manager”) on the launch of a new property fund (“the Fund”). Your mandate covers advice on the establishment of such a fund and the structuring of acquisitions that may be made prior to the launch of the Fund. The Manager is confident that despite the current credit crisis prospects for opportunistic real estate investments remain strong. You are due to have a short introductory meeting with the client’s team that will be responsible for the structuring of the Fund to discuss initial structuring ideas. The team members are product people with a focus on attracting large institutional and other sophisticated investors for the Fund, so tax optimisation is vital. They have a limited interest in fine detail. The client has prepared a term sheet setting out some of the key features of the new product. Product specification Investment objective Investment strategy To generate an IRR of 15% over the life of the Fund The Fund will invest opportunistically in real estate assets throughout Europe, including in development situations. Investments will be mainly in physical assets but may also be through real estate operating companies. There will be no limitations on the type of property assets the Fund can buy but it is likely to invest predominantly in the main use sectors of the market. The Fund may invest throughout Europe but will concentrate on the main economies, particularly UK, France, Germany, Italy, Belgium, Netherlands, Sweden, Denmark, Norway, Finland, Spain, Portugal & Poland. 3 years €1.2 bn Gross €400m Equity (Investors’ commitments) Leverage Structure This will specifically be subject to advice from the adviser(s). Life Investor entry/exit 7 years with two 1yr extension provisions Closed-ended fund Maximum 75% gross asset value Target 65% of gross asset value

Target countries

Investment period Target Fund...