KeyPoint Real Estate

Opportunity Hedge Fund, LP (B)

Fund Investment Objectives

One trading strategy is employed in the Fund. Generally, the Investment Manager starts with a coverage list of approximately 300 publicly traded real estate related companies, across all sectors, with a combined market capitalization of over $500 billion. From this universe the Investment Manager typically seeks out companies that have a significant gap between the private and public market values. This valuation gap is determined through a proprietary model that has been refined over many years of completing private equity real estate transactions across all sectors in the U.S., Europe and Latin America, in addition to executing long and short positions at a hedge fund. The proprietary model assumes private market financing terms, capitalization rates, growth assumptions and asset by asset level valuations. Some of the inputs in this model (capitalization rates, financing terms, occupancy rates, etc.) are obtained through an exclusive, strategic partnership with BMC Capital, one of the nations leading commercial real estate lenders, with over twenty offices in key markets across the U.S. The Investment Manager will meet with or have a conference call with senior management of the target companies before capital is committed to new investments. Long positions are generally executed when the public market valuation is significantly below the private market value. Typically, all long positions have a 12 month price target, which is re-visited as new information becomes available in addition to after quarterly reports. Long positions have relatively low turnover. Short positions are typically executed when the public market valuation is significantly above the private market value. Generally all short positions have an absolute price target, which is revisited when the stock is within 5% of this value. Short positions have relatively high turnover. Long and short investments are monitored daily with soft Alert Level, Action Level and Exit Level loss limits. AUM combines all share classes.