Oriel Securities LimitedSole Sponsor, Financial Adviser and Bookrunner

Prospectus 18 February 2011

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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubtabout the contents of this document, you should consult immediately a person authorised for the purposes of the FinancialServices and Markets Act 2000 (as amended) (‘‘FSMA’’) who specialises in advising on the acquisition of shares and othersecurities.

A copy of this document, which comprises a prospectus relating to Duet Real Estate Finance Limited (the ‘‘Company’’),prepared in accordance with the Prospectus Rules of the Financial Services Authority made pursuant to section 85 ofFSMA, has been delivered to the Financial Services Authority and has been made available to the public in accordance withRule 3.2 of the Prospectus Rules.

Application will be made to the UK Listing Authority for all the Ordinary Shares (issued and to be issued) to be admitted tothe premium listing segment of the Official List and for all such Ordinary Shares to be admitted to trading on the LondonStock Exchange’s Main Market for listed securities. It is expected that such admission will become effective and thatunconditional dealings in the Ordinary Shares will commence at 8.00 a.m. on 14 March 2011.

The Ordinary Shares are not dealt on any other recognised investment exchanges and no applications for the OrdinaryShares to be traded on any such other exchanges have been made or are currently expected to be made.

The Directors of the Company, whose names and functions appear in the ‘‘Directors, Agents and Advisers’’ section of thisProspectus, and the Company itself, accept responsibility for the information contained in this Prospectus. To the best of theknowledge of the Directors and of the Company (who have taken all reasonable care to ensure that such is the case),the information contained in this Prospectus is in accordance with the facts and does not omit anything likely to affect theimport of such information.

The Investment Adviser accepts responsibility for the information contained in this document pertaining to it. To the best ofthe knowledge of the Investment Adviser, who has taken all reasonable care to ensure that such is the case, the informationcontained in this document pertaining to it is in accordance with the facts and contains no omission likely to affect its import.

Although the whole text of this document should be read, the attention of persons receiving this document is drawn to thesection headed ‘‘Risk Factors’’ contained on pages 8 to 15 of this document.

Duet Real Estate Finance Limited(a company incorporated in Guernsey under The Companies (Guernsey) Law, 2008, as amended)

with registered no. 52878)

Placing and Offer for Subscription of Ordinary Shares of no par value atan Offer Price of 100 pence per Ordinary Share

and

Admission to the premium listing segment of the Official List and trading on theLondon Stock Exchange’s Main Market for listed securities

Sole Sponsor, Financial Adviser and Bookrunner

Oriel Securities Limited

Oriel Securities Limited (‘‘Oriel’’), which is authorised and regulated in the United Kingdom by the Financial ServicesAuthority, is acting for the Company and no-one else in connection with the Issue and the contents of this document and willnot be responsible to anyone other than the Company for providing the protections afforded to clients of Oriel or foraffording advice in relation to the Issue and the contents of this document or any matters referred to herein. Nothing in thisparagraph shall serve to exclude or limit any responsibilities which Oriel may have under FSMA or the regulatory regimeestablished thereunder. Oriel takes no responsibility for any part of the contents of this document pursuant to sections 79(3)or 90 of FSMA and does not accept any responsibility for, or authorise, any part of the contents of this document under rule5.5 of the Prospectus Rules of the Financial Services Authority.

The Ordinary Shares offered by this document have not been and will not be registered under the United States SecuritiesAct of 1933, as amended (the ‘‘Securities Act’’), or under the applicable state securities laws of the United States, and maynot be offered or sold directly or indirectly in or into the United States, or to or for the account or benefit of any US person(within the meaning of Regulation S under the Securities Act). In addition, the Company has not been, and will not be,registered under the United States Investment Company Act of 1940, as amended.

The Company is a registered closed-ended investment scheme registered pursuant to the Protection of Investors (Bailiwickof Guernsey) Law, 1987, as amended, and the Registered Collective Investment Scheme Rules 2008 issued by the GFSC.The GFSC, in granting registration, has not reviewed this document but has relied upon specific warranties provided byInternational Administration (Guernsey) Limited, the Company’s designated manager.

The Company, as a registered collective investment scheme under the Registered Collective Investment Scheme Rules 2008,is regulated by the GFSC.

Neither the GFSC nor the States of Guernsey Policy Council take any responsibility for the financial soundness of theCompany or for the correctness of any of the statements made or opinions expressed with regard to it. A registeredcollective investment scheme is not permitted to be directly offered to the public in Guernsey but may be offered toregulated entities in Guernsey or offered to the public by entities appropriately licensed under the Protection of Investors(Bailiwick of Guernsey) Law, 1987, as amended.

This document is dated 18 February 2011.

CONTENTS

Page

SUMMARY 3

RISK FACTORS 8

IMPORTANT INFORMATION 16

DIRECTORS, AGENTS AND ADVISERS 18

EXPECTED TIMETABLE 20

ISSUE STATISTICS 20

PART 1 THE COMPANY 21

PART 2 MANAGEMENT AND ADMINISTRATION OF THE COMPANY 28

PART 3 BACKGROUND TO THE EUROPEAN REAL ESTATE DEBT MARKETAND INVESTMENT OPPORTUNITY

31

PART 4 THE MASTER FUND 38

PART 5 THE MASTER FUND’S CURRENT PORTFOLIO AND PIPELINE OFFUTURE ASSETS

49

PART 6 THE INVESTMENT ADVISER AND ITS EXPERIENCE, THE GENERALPARTNER, THE SPECIAL LIMITED INVESTOR AND THE SEEDINVESTOR

51

PART 7 THE PLACING AND OFFER FOR SUBSCRIPTION 54

PART 8 TAXATION 57

PART 9 ADDITIONAL INFORMATION ON THE COMPANY 60

PART 10 ADDITIONAL INFORMATION ON THE MASTER FUND 80

PART 11 FINANCIAL INFORMATION 91

DEFINITIONS 119

TERMS AND CONDITIONS OF APPLICATIONS UNDER THE PLACING 125

TERMS AND CONDITIONS OF APPLICATIONS UNDER THE OFFER FORSUBSCRIPTION

129

NOTES ON HOW TO COMPLETE THE APPLICATION FORM 135

APPLICATION FORM 141

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SUMMARY

THE FOLLOWING SUMMARY IS EXTRACTED FROM, AND SHOULD BE READ AS ANINTRODUCTION TO AND IN CONJUNCTION WITH, THE FULL TEXT OF THISDOCUMENT. ANY DECISION TO INVEST IN THE COMPANY SHOULD BE BASED ONCONSIDERATION OF THIS DOCUMENT AS A WHOLE BY THE PROSPECTIVE INVESTOR.

Following the implementation of the relevant provisions of the Prospectus Directive of the EuropeanParliament and Council (Directive 2003/71/EC) in each member state of the European Economic Area(‘‘EEA’’), civil liability attaches to those persons responsible for the summary, including any translationof the summary, but only if the summary is misleading, inaccurate or inconsistent when read togetherwith the other parts of this document. Where a claim relating to the information contained in thisdocument is brought before a court, the plaintiff investor might, under the national legislation of an EEAState, have to bear the costs of translating this document before legal proceedings are initiated.

The Company and the Master Fund

The Company is a newly formed, Guernsey incorporated, closed-ended investment company. TheCompany is a feeder fund and will invest the Available Net Proceeds of the Issue in the Master Fundpursuant to the Commitment Letter. As a result, the Company’s financial performance will dependalmost entirely on the performance of its investment in the Master Fund.

The Company’s investment objective is to provide Shareholders, through its investment in the MasterFund, with regular dividends and an attractive total return whilst limiting downside risk to capital,through exposure to European commercial real estate debt.

The Master Fund is structured as an exempted limited partnership registered in the Cayman Islands. TheMaster Fund was established on 2 January 2009 and has raised a total of £117.4 million of commitments.The Master Fund commenced operations on 22 December 2009, being the date of the first drawdown.The Master Fund is seeking to raise commitments of up to £300 million. This amount may increase at thediscretion of the General Partner. In addition to the Issue, the Master Fund is anticipating a final closeprior to 22 June 2011.

The Master Fund will make new loans as well as buying existing loans and bonds collateralised byEuropean commercial real estate. Investments are in debt instruments which benefit from the protectionof being a secured loan or bond. These Investments are intended to be held for the medium to long termwith a view to realising interest income and possible long term gain.

The Master Fund has made six investments since it commenced operations totalling approximately£60 million, of which one has been realised at a profit of £1.1 million, representing an IRR in respect ofthat investment of 23.9 per cent.

Returns and distribution policy

The Master Fund is targeting a Gross IRR of 15 per cent or greater per annum, with a cash incomecomponent that provides for a net distribution to Limited Partners in excess of 7 per cent per annum. Thecash income component reflects the anticipated cash coupon that the Master Fund expects to receive onits investments once fully invested, and will be distributed to Limited Partners (including the Company)net of expenses and management fees.

The returns to investors in the Company will be dependent on the ability of the Master Fund to achieveits target return and the period over which the funds available to the Master Fund for investment(including the Available Net Proceeds) are deployed.

The Company will have exposure to the Master Fund’s existing portfolio and the Company expects to paya dividend in July 2011 representing a yield of 3-4 per cent1 based on the Offer Price.

Once the Master Fund’s capital has been fully invested, which is expected within 12 months of Admission,the Company will target dividend payments to Shareholders of 7 per cent per annum on each OrdinaryShare (by reference to the Offer Price).

1 Annualised, assuming total Master Fund commitments from Limited Partners of £300 million

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Investment opportunity

Disruption in the financial markets, coupled with a changing regulatory framework, has significantlyrestricted the availability of debt for financing commercial real estate across Europe. The key factorsdriving this have been:

. excessive levels of debt on lending banks’ balance sheets built up over the last decade, leading to thebanks’ desire to deleverage their balance sheets;

. falling property values resulting in increased LTV ratios;

. the requirements on banks to maintain greater amounts of regulatory capital as a result of the BaselII and Basel III accords, making it more expensive for a bank to make loans that are above a 60 to65 per cent LTV ratio and thereby restricting the amount of debt that banks will provide against anasset; and

. the lack of liquidity from other financing sources such as CMBS.

In addition, approximately half of the A960 billion1 of debt backed by European commercial real estate isexpected to require refinancing in the next three years. The banks have already signalled to the markettheir intention to shrink their balance sheets as an alternative to refinancing, thereby creating a debtfunding gap in the market.

Given this capital-constrained market place and the wall of maturities over the next few years, non-bankproviders of debt finance have the potential to generate significantly higher returns than previouslyavailable. The Investment Adviser therefore believes that the risk adjusted returns currently available toproviders of debt finance in the commercial real estate sector present an attractive investmentopportunity. Furthermore, the Investment Adviser believes that the Master Fund’s approach of primarilyproviding mezzanine finance backed by high quality assets with a strong tenant base represents the bestrisk adjusted approach to capitalising on this opportunity. The high cash paid coupon of the investmentsalso generates an attractive income profile.

Directors

The Directors of the Company are Quentin Burgess, John Falla and David Staples, all of whom arenon-executive directors. The Directors will meet on a regular basis in Guernsey to review and assess theinvestment policy and performance of the Company and generally to supervise the conduct of its affairs.

The Investment Adviser

The Investment Adviser is part of the Duet Group. The Duet Group is an alternative asset and wealthmanagement firm, focusing on Asset Management and Private Equity. The Duet Group is dedicated notonly to generating superior investment returns but also risk management, transparency and client serviceas required for institutional investors. Total assets under management stands at US$2.4bn as of31 December 2010.

Company costs

The administrative costs of the Company are estimated to be approximately £320,000 per annum.

Master Fund fees

From the Initial Closing Date to the end of the Investment Period, the Investment Adviser will receive anannual Advisory Fee in relation to the Company’s Interest of 1.5 per cent (plus VAT if applicable) perannum of the Company’s Commitment. After the end of the Investment Period, the Advisory Fee inrelation to the Company’s Interest shall be 1.5 per cent (plus VAT if applicable) per annum of suchproportion of the total acquisition cost of all Investments which remain unrealised at the start of therelevant quarter and which have not been written off as is equal to the proportion that the Company’sInterest bears to the aggregate Interests of all the Limited Partners.

The Special Limited Investor will be entitled to a total of 20 per cent of the proceeds of the Master Fundthat are available for distribution, subject to Limited Partners first receiving an amount equal to theircapital and the Preferred Return on the amounts drawn down from them respectively.

1 Source: CB Richard Ellis report, ‘‘The Funding Gap: Is Mezzanine Lending the Solution?’’, Winter 2011.

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The Placing and Offer for Subscription and investment in the Master Fund

The Company is seeking to raise approximately £100 million (before expenses) through the Placing andOffer for Subscription. The Issue is not being underwritten and will not proceed if the net proceeds of theIssue would be less than the Minimum Net Proceeds.

In the event that the net proceeds of the Issue would be less than the Minimum Net Proceeds, theCompany could only proceed with the Issue if it published a supplementary prospectus that waived thecondition to raise the Minimum Net Proceeds. The estimated initial NAV per Ordinary Share is expectedto be approximately 98 pence.

The initial expenses of the Company are those which are necessary for the Issue and will be borne by theCompany. Should the amount of such expenses, the Subscription Premium payable by the Company inrespect of its Commitment and the amount of any working capital retained by the Company from theproceeds of the Issue, exceed an amount equal to 2 per cent of the gross Issue proceeds, the InvestmentAdviser has agreed to reimburse the Company and/or meet its expenses such that the Available NetProceeds which will be committed to be invested by the Company in the Master Fund pursuant to theCommitment Letter will not be less than 98 per cent of the amount of the gross Issue proceeds.Consequently, if the gross Issue proceeds are £100 million, the Company will commit to invest at least£98 million in the Master Fund.

Application will be made for the Ordinary Shares to be admitted to the premium listing segment of theOfficial List and to trading on the Main Market of the London Stock Exchange. It is expected thatAdmission will become effective and that dealings in the Ordinary Shares will commence at 8.00 a.m. on14 March 2011.

Summary of Risk Factors

Risks relating to the Company

. The Company is a newly-formed company with no separate operating history

. The Ordinary Shares have never been publicly traded on the London Stock Exchange. Even if theCompany is successful in listing the Ordinary Shares, an active and liquid trading market for theOrdinary Shares may not develop.

. The Company’s and the Master Fund’s targeted returns are based on estimates and assumptionsthat are inherently subject to significant business and economic uncertainties and contingencies, andthe actual rate of return may be materially lower than the targeted returns.

. Declaration, payment and the amount of any future dividends by the Company are subject to thediscretion of the Directors and will depend upon, among other things: the performance of theMaster Fund, the ability of the Master Fund to make further Investments, distributions made by theMaster Fund and the size of any such distributions as well as the Company’s financial position andcash requirements.

. Changes in laws or regulations, and the costs associated with complying with relevant laws andregulations, may adversely affect the Company’s business, the Investments and the results of itsoperations.

Risks relating to the Ordinary Shares and Shareholders

. The price of Ordinary Shares may fluctuate significantly and potential investors could lose all orpart of their investment.

. The Ordinary Shares may trade at a discount to Net Asset Value.

. The rights of Shareholders and the fiduciary duties owed by the Board of Directors to the Companywill be governed by Guernsey law and the Articles of Incorporation and may differ from the rightsand duties owed to companies under the laws of other jurisdictions.

. Local laws or regulations may mean that the status of the Company, or the Ordinary Shares, isuncertain or subject to change, which could adversely affect investors’ ability to hold OrdinaryShares.

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Risks relating to the Company’s investment in the Master Fund

. Past performance of the Master Fund should not be taken as an indication of future performance.

. The Company will not be able to participate in the investment decisions of the Master Fund, inwhich it will have committed to invest substantially all of its capital.

. It may not be possible for the Company to dispose of its Interest if it wished to do so.

Risks associated with the Investments

. There can be no assurance that the Master Fund will be able to invest in assets on attractive termsor generate any investment returns.

. There is no guarantee that the Master Fund will be able to invest fully the total amount ofcommitments it has received, or that suitable investments will be or can be made, or that anyInvestments will be successful.

. The value of an Investment can go down as well as up and, as a result, a Limited Partner (includingthe Company) may lose some or all of their commitments or the value of their investment.

. Competitors may enter the market.

. There is currency risk from material movements in the exchange rate between Pounds Sterling andthe currency in which certain investments are made.

. Changes in interest rates may adversely affect the Investments.

. The Company’s economic interests may not be effectively hedged against changes in interest ratesand foreign exchange fluctuations.

. The Master Fund has indemnified the Investment Adviser against claims, liabilities, costs andexpenses incurred by it by reason of its activities on behalf of the Master Fund.

. Performance of Investments may be affected by reason of events such as war, civil war, riot orarmed conflict, terrorism, acts of sabotage and natural disasters such as storms, earthquakes, tidalwaves, floods, lightning, explosions, fires and destruction of plant, machinery and/or premises, whichare outside the control of the Company and the Master Fund.

Risks relating to the Investment Adviser

. The Investment Adviser is dependent upon the expertise of key personnel in providing investmentadvisory services to the Company and the Master Fund.

. Failure by the Investment Adviser or other third-party service providers of the Company and/or theMaster Fund to carry out its or their obligations could materially disrupt the business of theCompany and/or of the Master Fund.

Risks in relation to investments in commercial real estate

. The Master Fund is exposed to the commercial real estate market.

. A major occupier or tenant could default and/or seek to renegotiate terms during the course of atenancy.

. Real estate valuation is inherently subjective and uncertain.

. The value of underlying real estate and the rental income it produces may fluctuate as a result offactors which are outside the Company’s and the Master Fund’s control.

Risks relating to investing in subordinated/mezzanine securities

. Investments are typically subordinated and can be susceptible to losses.

. The nature of the Master Fund’s security may not always be secured by way of mortgage.

. Many of the Investments will be illiquid.

. Hedging arrangements may not be successful.

. Investments are subject to jurisdiction-specific insolvency regimes.

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. Repayments of loans could be subject to the availability of refinancing options, including theavailability of senior debt.

Risks relating to taxation

. The Company and the Master Fund are exposed to changes in tax laws, accounting standards orregulation.

. The Company and the Master Fund are exposed to changes in their tax residence and changes in thetax treatment of arrangements relating to their respective businesses or investments.

. Changes in the Company’s tax status or tax treatment may adversely affect the Company.

. Changes in tax laws or regulation affecting the Master Fund or the unexpected imposition of tax onthe Investments could adversely affect its performance.

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RISK FACTORS

An investment in the Company involves significant risks and is only suitable for investors who arecapable of evaluating the merits and risks of such an investment and who have sufficient resources to beable to bear any losses (which may be equal to the whole amount invested) which may result from suchan investment. Accordingly, prospective investors should review carefully and evaluate the risks and theother information contained in this document before making a decision to invest in the Company. If inany doubt, prospective investors should immediately seek their own personal financial advice from theirindependent professional adviser authorised under FSMA who specialises in advising on the acquisitionof shares and other securities or other advisers such as legal advisers and accountants.

If any of the following risks actually occur, the business, financial condition, capital resources, resultsand/or future operations of the Company and/or of the Master Fund (as applicable) could be materiallyand adversely affected. In such circumstances, the trading price of the Ordinary Shares could decline andinvestors may lose all or part of their investment. Additional risks and uncertainties not currently knownmay also have an adverse effect on the Company and on the Master Fund.

The Directors believe that the risks described below are the material risks relating to the OrdinaryShares, the Company, the Master Fund and its industry at the date of this document. Additional risksand uncertainties not currently known to the Directors, or that the Directors deem to be immaterial atthe date of this document, may also have an adverse effect on the performance of the Company and thevalue of the Ordinary Shares. Potential investors should review this document carefully and in itsentirety and consult with their professional advisers before making an application to invest in theOrdinary Shares.

A. Risks relating to the Company

The Company is a newly-formed company with no separate operating history

The Company was incorporated as a Guernsey closed-ended investment company on 7 January 2011 andhas not yet commenced operations. The Company does not have any historical financial statements orother meaningful operating or financial data on which potential investors may base an evaluation. Anyinvestment in the Ordinary Shares is therefore subject to all of the risks and uncertainties associated withany new business, including the risk that the Company will not achieve its investment objectives and thatthe value of any investment made by the Company could decline substantially.

The Ordinary Shares have never been publicly traded on the London Stock Exchange. Even if theCompany is successful in listing the Ordinary Shares, an active and liquid trading market for theOrdinary Shares may not develop

The Company has applied to admit the Ordinary Shares to trading on the Main Market of the LondonStock Exchange. Even if the Ordinary Shares are admitted to trading, the Company cannot predict theextent to which investor interest will lead to the development of an active and liquid trading market forthe Ordinary Shares or, if such a market develops, whether it will be maintained. In addition, a substantialamount of Ordinary Shares may be issued to a limited number of investors, which could adversely affectthe development of an active and liquid market for the Ordinary Shares.

The Company cannot predict the effect on the price of the Ordinary Shares if a liquid and active tradingmarket for the Ordinary Shares does not develop. In addition, if such a market does not develop,relatively small sales may have a significant negative impact on the price of the Ordinary Shares whilstsales of a significant number of Ordinary Shares may be difficult to execute at a stable price.

The Company’s and the Master Fund’s targeted returns (as set out in this document) are based onestimates and assumptions that are inherently subject to significant business and economic uncertaintiesand contingencies, and the actual rate of return may be materially lower than the targeted returns

The Company’s targeted returns and the Master Fund’s targeted returns set out in this document aretargets only and are based on estimates and assumptions about a variety of factors including, withoutlimitation, asset mix, value, volatility, holding periods, performance of the Investments, investmentliquidity, changes in current market conditions, interest rates, government regulations or other policies,the worldwide economic environment, changes in law and taxation, natural disasters, terrorism, socialunrest and civil disturbances or the occurrence of risks described elsewhere in this document, which areinherently subject to significant business, economic and market uncertainties and contingencies, all ofwhich are beyond the Company’s and the Master Fund’s control and which may adversely affect the

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Company’s and the Master Fund’s ability to achieve their respective targeted returns. The Company andthe Master Fund may not be able to implement their respective investment policies and strategies in amanner that generates returns in line with the targets. Furthermore, the targeted returns are based on themarket conditions and the economic environment at the time of assessing the targeted returns, and aretherefore subject to change. There is no guarantee that actual returns can be achieved at or near thelevels set out in this document. Accordingly, the actual rate of return achieved may be materially lowerthan the targeted returns, or may result in a loss, which could have a material adverse effect on theCompany’s profitability, NAV and the price of the Ordinary Shares.

Potential investors should not place any reliance on the targeted returns set out in this document andshould make their own determination as to whether the targeted returns are reasonable or achievable indeciding whether to invest in the Company. The Company does not intend to regularly publish or toupdate or otherwise revise its targeted returns to reflect subsequent events or circumstances.

Dividends

Similarly, there can be no assurance as to the level and/or payment of future dividends by the Company.The declaration, payment and amount of any future dividends by the Company are subject to thediscretion of the Directors and will depend upon, among other things, the performance of the MasterFund, the ability of the Master Fund to make further Investments, distributions made by the Master Fundand the size of any such distributions as well as the Company’s financial position and cash requirementsand the ability of the Company to comply with the applicable legal requirements for paying dividends,including the statutory solvency test under Guernsey law.

Changes in laws or regulations, and the costs associated with complying with relevant laws andregulations, may adversely affect the Company’s business, the Investments and the results of itsoperations

The Company, the Master Fund and the Investment Adviser are subject to laws and regulations enactedby national, regional and local governments and institutions. In particular, the Company will be requiredto comply with certain statutory requirements that are applicable to a Guernsey company and the ListingRules and the Disclosure and Transparency Rules. Compliance with, and monitoring of, applicable lawsand regulations may be difficult, time-consuming and costly. These laws and regulations and theirrespective interpretation and application may also change from time to time and those changes couldhave a material adverse effect on the Investments.

B. Risks relating to the Ordinary Shares and Shareholders

The price of Ordinary Shares may fluctuate significantly and potential investors could lose all or part oftheir investment

The Offer Price is fixed but, as there has not been a market for the Ordinary Shares, this may not beindicative of their market price. The market price of Ordinary Shares may fluctuate significantly andpotential investors may not be able to resell their Ordinary Shares at or above the price at which theypurchased them. The following factors may cause the price of the Ordinary Shares to vary:

. changes in the Company’s financial performance and prospects or in the financial performance andprospects of companies engaged in businesses that are similar to the Company’s business;

. changes in the underlying values of the Investments;

. the termination of the Master Fund Investment Advisory Agreement or the Company InvestmentAdvisory Agreement and the departure of some or all of the Investment Adviser’s key personnel;

. changes in laws or regulations, including tax laws, or new interpretations or applications of laws andregulations that are applicable to the Company and/or the Master Fund;

. general economic trends and other external factors, including a rise in interest rates or rates ofinflation, or an increase in the market’s expectation of such rises;

. sales of Ordinary Shares by Shareholders; and

. speculation in the press or investment community regarding the business of the Company or theMaster Fund or the Investments.

Securities markets in general have experienced extreme volatility that has often been unrelated to theoperating performance of particular companies. Any broad market fluctuations may adversely affect the

9

trading price of the Ordinary Shares. Investors should be aware that the price of the Ordinary Shares andthe income from them can go down as well as up.

The Ordinary Shares may trade at a discount to Net Asset Value

The Ordinary Shares may trade at a discount to Net Asset Value for a variety of reasons, including due tomarket conditions, liquidity concerns or the actual or expected performance of the Master Fund.

The rights of Shareholders and the fiduciary duties owed by the Board of Directors to the Company willbe governed by Guernsey law and the Articles of Incorporation and may differ from the rights and dutiesowed to companies under the laws of other jurisdictions

The Company has been formed under the laws of Guernsey. The rights of its Shareholders and thefiduciary duties that its Board of Directors owes to the Company and the Shareholders are governed byGuernsey law and the Articles of Incorporation. These may differ from the rights and duties owed tocompanies and shareholders under the laws of other jurisdictions.

Local laws or regulations may mean that the status of the Company, or the Ordinary Shares, is uncertainor subject to change, which could adversely affect investors’ ability to hold Ordinary Shares

For regulatory and tax purposes, the status of the Company and the Ordinary Shares may be different indifferent jurisdictions. For instance, in certain jurisdictions and for certain purposes, the Ordinary Sharesmay be treated as units in a collective investment scheme. Furthermore, in certain jurisdictions, theregulatory and tax status of the Company and/or the Ordinary Shares may be uncertain or subject tochange, or it may differ depending on the availability of certain information or as a result of disclosuresmade by the Company. Changes in the status or treatment of the Company or the Ordinary Shares forregulatory and/or tax purposes may have unforeseen effects on the ability of investors to hold OrdinaryShares or the consequences to investors of doing so.

C. Risks relating to the Company’s investment in the Master Fund

Past performance of the Master Fund should not be taken as an indication of future performance

This document contains certain historical financial and other information concerning the Master Fund’spast performance. However, past performance of the Master Fund should not be taken as an indication ofthe Master Fund’s future performance or, by extension, that of the Company.

The Company will not be able to participate in the investment decisions of the Master Fund, in which itwill have committed to invest substantially all of its capital

The Company will commit to invest substantially all of its capital in the Master Fund. The Companyexpects that its only substantial asset will be its investment in the Master Fund. The Company (incommon with other Limited Partners) will not have a right to participate in the investment decisions ofthe Master Fund and the Master Fund may make investment decisions with which the Companydisagrees. However, all Investments will comply with the Master Fund’s investment policy.

It may not be possible for the Company to dispose of its Interest if it wished to do so

An Interest may be transferred only with the consent of the General Partner. The General Partner maywithhold its consent in its absolute discretion. Even if the General Partner were to consent to the disposalof all or part of the Company’s Interest, there may be no willing buyer for that Interest at a price that isacceptable to the Company or at all. It may therefore not be possible for the Company to dispose of itsInterest if it wished to do so.

D. Risks associated with the Investments

Achieving the investment objective

The success of the Master Fund depends on the Investment Adviser’s ability to identify, make and realiseinvestments in accordance with the Master Fund’s investment objective. There can be no assurance thatthe Investment Adviser will be able to do so or that the Master Fund will be able to invest in assets onattractive terms or generate any investment returns.

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Investment by the Master Fund

There is no guarantee that the Master Fund will be able to invest fully the total amount of commitments ithas received, or that suitable investments will be or can be made, or that any Investments will besuccessful.

Value of Investments

The value of an Investment can go down as well as up and, as a result, a Limited Partner (including theCompany) may lose some or all of their commitments or the value of their investment.

Availability of appropriate assets

The Directors and the Investment Adviser believe that there is substantial demand for financing of thetype provided and intended to be provided by the Master Fund. However, there is no guarantee that suchdemand will result in sufficient investments being made in a timely manner, or at all, by the Master Fundto allow the Master Fund to deliver the targeted returns for Limited Partners, including the Company. Inparticular, there is no guarantee that the potential pipeline investments described in Part 5 will be madeor, if they are, upon what terms. When the availability of appropriate assets is lower than expected, it islikely that the Master Fund will take longer than expected to identify appropriate assets and to drawdown capital from its Limited Partners. In such circumstances, the Company will continue to hold cashwhich will generate a much lower return than the targeted returns referred to in this document.

Competitors may enter the market

The business in which the Master Fund is engaged may become more competitive. In such circumstances,there may be increased competition for investments of the nature targeted by the Master Fund and thereturns available on such investments may be negatively impacted. This may impact negatively upon theability of the Company and the Master Fund to achieve their respective objectives and to generate theirrespective targeted returns.

Currency risk

The Investments will predominantly be in Euros and Pounds Sterling although Investments may also bemade in other European currencies. The Master Fund will maintain its books in Pounds Sterling andthere could be material movements in the exchange rate between Pounds Sterling and the currency inwhich certain investments are made. As a result, the value of Investments may go up or down solely as aresult of changes in currency exchange rates.

Interest rate risk

Changes in interest rates may adversely affect the Investments. Interest rates are highly sensitive to manyfactors, including governmental, monetary and tax policies, domestic and international economic andpolitical considerations, fiscal deficits, trade surpluses or deficits, regulatory requirements and otherfactors beyond the control of the Master Fund.

The Master Fund has indemnified the Investment Adviser

The Master Fund has indemnified the Investment Adviser and its Associates, agents and their respectivepersonnel and members of the Advisory Committee against claims, liabilities, costs and expenses incurredby them by reason of their activities on behalf of the Master Fund, subject to certain exclusions. Suchindemnification, if relied upon, may affect the financial performance of the Master Fund and the returnsgenerated for Limited Partners.

Force majeure

The performance of the Investments may be affected by reason of events such as war, civil war, riot orarmed conflict, terrorism, acts of sabotage and natural disasters such as storms, earthquakes, tidal waves,floods, lightning, explosions, fires and destruction of plant, machinery and/or premises, which are outsideits control.

E. Risks relating to the Investment Adviser

The Investment Adviser’s experience

The past performance of investments managed or proposed by the Investment Adviser is not necessarilya guide to the future performance of the Investments of the Master Fund and there is no guarantee that

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the performance of the Master Fund itself and/or the Investments will be similar to that of any of theinvestments historically managed or proposed by the Investment Adviser. The charging of an investmentmanagement fee and other fees, taxes and Carried Interest will affect the returns of the Master Fund.

The Investment Adviser is dependent upon the expertise of key personnel in providing investmentadvisory services to the Company and the Master Fund

The ability of the Master Fund to achieve its investment objective is significantly dependent upon theexpertise of the Investment Adviser’s dedicated investment team and the ability of the InvestmentAdviser to attract and retain suitable staff. The impact of the departure, for any reason, of a KeyIndividual on the ability of the Investment Adviser to achieve the investment objective of the MasterFund cannot be determined and may depend on, amongst other things, the ability of the InvestmentAdviser to recruit other individuals of similar experience and credibility. A failure by the InvestmentAdviser to recruit suitable individuals to replace any Key Individual who leaves the Investment Advisermay impact negatively on the performance of the Investment Adviser and, therefore, of the Master Fundand the Company.

Failure by the Investment Adviser or other third-party service providers of the Company and/or theMaster Fund to carry out its or their obligations could materially disrupt the business of the Companyand/or of the Master Fund

Neither the Company nor the Master Fund has any employees and the Directors of the Company have allbeen appointed on a non-executive basis. Both the Company and the Master Fund rely on theperformance of third-party service providers. In particular, the Investment Adviser and theAdministrator will perform services that are integral to the operations and financial performance ofthe Company and the Master Fund. Failure by any service provider to carry out its obligations to theCompany and/or to the Master Fund in accordance with the terms of its appointment, or to perform itsobligations to the Company and/or to the Master Fund at all, could have a materially adverse effect onthe Company’s performance and returns to Shareholders.

F. Risks in relation to investments in commercial real estate

The Master Fund is exposed to the commercial real estate market

As the underlying security for Investments is commercial real estate assets, the Master Fund is exposed toany further downturn in the commercial real estate market. The commercial real estate market is cyclicalin nature and relates to the condition of the economy as a whole. Deteriorating economic conditionsadversely affect the value of real estate assets. In addition, negative economic conditions have also had,and may continue to have, a material adverse effect on rental revenues and therefore the ability ofcounterparties to service any payments due to the Master Fund pursuant to the Investments.

The commercial real estate markets have recently been adversely impacted by the ongoing globalbanking crisis, with real estate values, including the value of commercial real estate, demonstratingsubstantial declines. The value of commercial real estate may reduce further, and those reductions couldbe substantial. Declines in the performance of the UK and other European economies could have anegative impact on consumer spending, levels of employment, rental revenues and vacancy rates, andcould as a result have a material adverse effect on the Master Fund and the Company’s business andfinancial condition.

A major occupier or tenant could default and/or seek to renegotiate terms during the course of a tenancy

The entities to which the Master Fund advances loans may be significantly exposed to the factors thataffect the corporate and retail environment generally. A significant decline in overall tenant revenues orthe insolvency of multiple significant individual tenants, or a substantial number of smaller tenants, wouldmaterially decrease that entity’s revenues and available cash to service such loans, and also materiallylower the value of the underlying real estate asset.

Real estate valuation is inherently subjective and uncertain

The valuation of real estate and therefore the valuation of any underlying security relating to Investmentsis inherently subjective due to, among other factors, the individual nature of each property, its locationand the expected future rental revenues from that particular property. As a result, the valuations of thereal estate assets underlying the Investments, which will account for the vast majority of the MasterFund’s assets, are subject to a degree of uncertainty and are made on the basis of assumptions which may

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not prove to be accurate, particularly in periods of volatility or low transaction flow in the commercialreal estate market, as has recently been the case.

In addition, any valuations relied on by the Investment Adviser will reflect the position only at their date,and market volatility since the date of any such valuations and over the longer term may cause significantdeclines in the value of the real estate. Assessing real estate valuations is inherently more uncertain incurrent market conditions as there is a more limited number of comparable transactions against which toassess the value of particular real estate assets.

The value of underlying real estate and the rental income it produces may fluctuate as a result of factorswhich are outside the Company’s control

Rental levels and market values of real estate in the UK and continental Europe are generally affected byoverall conditions in the economy, political factors and one-off events, such as the condition of thefinancial markets, the availability of finance to businesses and consumers, the effectiveness of fiscal andmonetary policies in stabilising economic conditions, changes in government legislation, politicaldevelopments including changes in regulatory or tax regimes, increases in unemployment and relateddeclines in consumer spending, an oversupply of, or a reduction in demand for, retail space or consumergoods, infrastructure quality, financial performance and the productivity of industries located in thesecountries, relocations or insolvency of tenant businesses and armed conflicts or terrorist attacks.

Certain types of these risks (for example, risk of armed conflicts or terrorist acts, certain natural disastersor weather catastrophes, such as flooding, as well as certain ‘‘acts of god’’) may in the future becomeuninsurable or not economically insurable. However, the Investment Adviser does not intend that theMaster Fund will make Investments in relation to which the underlying real estate assets are not insurableon economic terms.

The UK and European commercial real estate markets are also affected by a number of other factorswhich may significantly impact the value of commercial real estate investments. These factors include, butare not limited to, interest rates and credit spreads, levels of prevailing inflation, the global and nationalavailability of financing for businesses and consumers, the returns from alternative investments ascompared to real estate and changes in planning, commercial lease and tax laws and practices. Inparticular, commercial real estate values are dependent on current rental values and occupancy rates,prospective rental growth, lease lengths, tenant creditworthiness and solvency and investment yieldstogether with the nature, location and physical condition of the real estate concerned.

The ability of a commercial borrower to repay a mortgage loan may be affected by many factors, such asthe success of tenant businesses, property management decisions, changes in laws that increase operatingexpense or limit rents that may be charged, declines in regional or local real estate values or occupancyrates, increases in interest rates, real estate tax rates and other operating expenses, increases inunemployment, increase in leverage as a percentage of property values and increases in the percentage ofincome that borrowers must use to service their mortgages.

G. Risks relating to investing in subordinated/mezzanine securities

Investments are typically subordinated and can be susceptible to losses

Investments may consist of interests and/or economic exposures with limited recourse that aresubordinated in right of payment and ranked junior to other obligations that are secured by or representownership in the same asset or pool of assets. In the event of default by an issuer in relation to suchInvestments, holders of the issuer’s more senior obligations will be entitled to payments in priority to theMaster Fund. Some of the Investments may also have structural features that divert payments of interestand/or principal to more senior classes of obligations secured by or representing ownership in the sameasset or pool of assets when the delinquency or loss experience of the pool exceeds certain levels. Thismay lead to interruptions in the income stream that the Master Fund anticipates receiving from itsinvestment portfolio, which may lead to the Master Fund having less income to distribute to LimitedPartners including the Company.

The nature of the Master Fund’s security may not always be secured by way of mortgage

The Master Fund may acquire interests in bank loans and other debt obligations that are secured byguarantees and other security pledges and not by way of mortgage. In the event of default, therefore, theMaster Fund may not have direct recourse to the underlying asset.

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Many of the Investments will be illiquid

Investments made by the Master Fund may not be publicly-traded or freely transferable. SuchInvestments may therefore be extremely difficult to value or to realise.

Hedging arrangements may not be successful

The Company’s economic risks cannot be effectively hedged. However, in connection with the financingof certain Investments, the Master Fund may employ hedging techniques designed to reduce the risks ofadverse movements in interest rates and/or currency exchange rates.

Currency and interest rate derivatives designed to hedge the portfolio from adverse movements in foreignexchange and interest rates may not perfectly hedge the cashflows of the underlying investments. Thismay result in differences between the value of Investments and their hedges. In particular, changes to therepayment profile may cause the hedges to become less efficient.

The Master Fund may benefit from the use of these hedging strategies. However, such strategies may alsoresult in losses and overall poorer performance than if the Master Fund had not entered into such hedgingtransactions.

Investments are subject to jurisdiction-specific insolvency regimes

The value of Investments may be impacted by various laws enacted in the jurisdictions of incorporation ofthe obligors thereunder and, if different, the jurisdictions from which the obligors conduct their businessand in which they hold their assets, which may adversely affect such obligors’ abilities to make paymenton a full or timely basis.

In particular, it should be noted that a number of continental European jurisdictions operate‘‘debtor-friendly’’ insolvency regimes which could result in delays in payments where obligations,debtors or assets thereunder are subject to such regimes. The different insolvency regimes applicable inthe different European jurisdictions result in a corresponding variability of recovery rates for seniorloans, mezzanine loans and other debt obligations entered into or issued in such jurisdictions.

Jurisdiction-specific insolvency regimes may negatively impact borrowers’ or issuers’ ability to makepayments to the Master Fund, or the Master Fund’s recovery in a restructuring or insolvency, which mayadversely affect the Company’s business, financial condition and results of operations.

Repayments of loans could be subject to the availability of refinancing options, including theavailability of senior debt

Upon maturity of a loan, the borrower may either sell the underlying asset to repay the loan or seek torefinance the loan with an alternative lender. It is not certain that refinancing options will be available toborrowers on maturity of any Investments.

Repayment of loans is subject to the underlying real estate collateral at the date of maturity

If the value of an asset upon which an Investment is secured is lower than the value of the underlying loanat the date of maturity of that loan, the counterparty to the loan might be unwilling to repay such loanresulting in recourse to the lower valued asset.

Investments in CMBS are passive and the Master Fund has limited control

A CMBS is sold to a large number of investors. Typically, the majority of investors in the CMBS arerequired to consent to any re-structuring which is then imposed on all the investors. As the Master Fundwill only have a minority interest in any CMBS that it acquires it will have limited control over anydecision-making regarding any re-structuring of the CMBS or its issuer.

H. Risks relating to taxation

The Company and the Master Fund are exposed to changes in tax laws, accounting standards orregulation, or their interpretation

Changes to the tax laws or accounting standards of, or practice in, Guernsey, the United Kingdom or anyother tax jurisdiction affecting the Company or the Master Fund including, for example, the imposition ofwithholding or other taxes on the Company’s investment in the Master Fund or on the underlyingInvestments, could adversely affect the value of the Investments and decrease the post-tax returns toShareholders.

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The Company and the Master Fund are exposed to changes in their tax residence and changes in the taxtreatment of arrangements relating to their respective business or investments

If the Company or the Master Fund and its underlying companies were treated as resident, or as having apermanent establishment, or as otherwise being engaged in a trade or business, in any country in whichthey invest or in which the Investments are managed, all of their income or gains, or the part of such gainor income that is attributable to, or effectively connected with, such permanent establishment or trade orbusiness, may be subject to tax in that country, which could have a material adverse effect on theperformance of the Company and on returns to the holders of the Ordinary Shares.

To maintain their non-UK tax resident status, the Company and the Master Fund and its underlyingcompanies must be managed and controlled outside the United Kingdom. The composition of the boardsof directors of the Company, the underlying companies of the Master Fund and the General Partner, theplace of residence of the individual directors and the location(s) in which the directors make theirdecisions will be important factors in determining and maintaining the non-UK tax residence status of theCompany and the Master Fund and its underlying companies. The Company is incorporated in Guernseyand a majority of its Directors reside outside the United Kingdom. The Directors will take steps to ensurethat the Company is not centrally managed and controlled in the United Kingdom and, in particular, theirstrategic decisions are not made in the United Kingdom, otherwise there is a risk that the Company maylose its non-UK tax resident status. The Company must similarly ensure that it does not become taxresident in other jurisdictions.

Offshore Funds Rules

Changes in the Company’s tax status or tax treatment may adversely affect the Company, and if theCompany becomes subject to the UK offshore funds rules in Part 8 of the Taxation (International andOther Provisions) Act 2010, there may be adverse tax consequences for UK resident shareholders.

Changes in tax laws or regulation affecting the Master Fund or the unexpected imposition of tax on theInvestments could adversely affect its performance

There can be no assurance that the net income of the Master Fund, the Cayman Company or theLuxembourg Company will not become subject to tax (or increased tax) in one or more countries as aresult of its activities, adverse developments or changes in law, contrary conclusions by the relevant taxauthorities or other causes. The imposition of any such unanticipated taxes could materially reduce theMaster Fund’s after-tax returns, which could have a material adverse effect on the performance of theCompany and returns to Shareholders.

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IMPORTANT INFORMATION

In assessing an investment in the Company, investors should rely only on the information in thisProspectus. No person has been authorised to give any information or make any representations inrelation to the Company other than those contained in this Prospectus and, if given or made, suchinformation or representations must not be relied upon as having been authorised by the Company, theDirectors, the Investment Adviser, the Sponsor or any other person. Neither the delivery of thisProspectus nor any subscription or purchase of Ordinary Shares made pursuant to this Prospectus shall,under any circumstances, create any implication that there has been no change in the affairs of theCompany or the Master Fund since, or that the information contained herein is correct at any timesubsequent to, the date of this Prospectus.

Regulatory information

This Prospectus does not constitute an offer to sell, or the solicitation of an offer to subscribe for or tobuy, shares in any jurisdiction in which such offer or solicitation is unlawful. Issue or circulation of thisProspectus may be prohibited in some countries.

Investment considerations

The contents of this Prospectus are not to be construed as advice relating to legal, financial, taxation,investment or any other matters. Prospective investors should inform themselves as to:

. the legal requirements within their own countries for the subscription for, purchase, holding,transfer or other disposal of Ordinary Shares;

. any foreign exchange restrictions applicable to the subscription for, purchase, holding, transfer orother disposal of Ordinary Shares which they might encounter; and

. the income and other tax consequences which may apply in their own countries as a result of thesubscription for, purchase, holding, transfer or other disposal of Ordinary Shares.

Prospective investors must rely upon their own representatives, including their own legal advisers andaccountants, as to legal, tax, investment or any other related matters concerning the Company and aninvestment therein.

The Placing will primarily be marketed to institutional and sophisticated investors. Typical investorspursuant to the Offer are expected to be UK based asset and wealth managers regulated or authorised bythe FSA and some private individuals (some of whom may invest through brokers).

An investment in the Company should be regarded as a long term investment. There can be no assurancethat the Company’s investment objectives will be achieved.

This Prospectus should be read in its entirety before making any investment in the Ordinary Shares. AllShareholders are entitled to the benefit of, are bound by and are deemed to have notice of, the provisionsof the Memorandum and Articles of Incorporation of the Company, which investors should review.

Forward-looking statements

This Prospectus includes statements that are, or may be deemed to be, ‘‘forward-looking statements’’.These forward-looking statements can be identified by the use of forward-looking terminology, includingthe terms ‘‘believes’’, ‘‘estimates’’, ‘‘anticipates’’, ‘‘expects’’, ‘‘intends’’, ‘‘may’’, ‘‘will’’ or ‘‘should’’ or, ineach case, their negative, or other variations or comparable terminology. These forward-lookingstatements include all matters that are not historical facts.

All forward-looking statements address matters that involve risks and uncertainties. Accordingly, thereare or will be important factors that could cause the Company’s actual results to differ materially fromthose indicated in these statements. These factors include, but are not limited to, those described in thepart of this Prospectus entitled ‘‘Risk Factors’’, which should be read in conjunction with the othercautionary statements that are included in this Prospectus. Any forward-looking statements in thisProspectus reflect the Company’s current views with respect to future events and are subject to these andother risks, uncertainties and assumptions relating to the Company’s and the Master Fund’s operations,results of operations and growth strategy.

Subject to any obligations under the Prospectus Rules, the Listing Rules and the Disclosureand Transparency Rules, the Company undertakes no obligation publicly to update or review any

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forward-looking statement, whether as a result of new information, future developments or otherwise.Prospective investors should specifically consider the factors identified in this Prospectus which couldcause actual results to differ before making an investment decision.

Presentation of information

Market, economic and industry data

Market, economic and industry data used throughout this Prospectus is sourced from various industry andother independent sources. The Company and the Directors confirm that such data has been accuratelyreproduced and, so far as they are aware and are able to ascertain from information published from suchsources, no facts have been omitted which would render the reproduced information inaccurate ormisleading.

Currency presentation

Unless otherwise indicated, all references in this Prospectus to ‘‘sterling’’, ‘‘pounds sterling’’, ‘‘£’’ or‘‘pence’’ are to the lawful currency of the UK.

Definitions

A list of defined terms used in this Prospectus is set out at pages 119 to 124.

Governing law

Unless otherwise stated, statements made in this Prospectus are based on the law and practice currentlyin force in England and Wales or Guernsey (as appropriate) and are subject to changes therein.

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DIRECTORS, AGENTS AND ADVISERS

Directors (all non-executive) Quentin Burgess (Chairman)John FallaDavid Staples

Administrator, secretaryand registered office ofthe Company

International Administration (Guernsey) LimitedRegency CourtGlategny EsplanadeSt. Peter PortGuernseyGY1 1WW

Registered office of theMaster Fund

c/o Mourant Cayman Corporate Services LimitedHarbour CentrePO Box 1348North Church StreetGrand Cayman, KY1-1108Cayman Islands

Registrar of the Company Capita Registrars (Guernsey) LimitedLongue Hougue HouseSt SampsonGuernseyGY2 4JN

Administrator of theMaster Fund

BNY Mellon Investment Servicing (International) LimitedRiverside TwoSir John Rogerson’s QuayGrand Canal DockDublin 2Ireland

Investment Adviser to theCompany and the Master Fund

Duet Private Equity Limited27 Hill StreetLondonW1J 5LP

Sole Financial Adviser, Sponsorand Bookrunner

Oriel Securities Limited125 Wood StreetLondonEC2V 7AN

Financial Adviser to theInvestment Adviser

Evercore Partners10 Hill StreetLondonW1J 5NQ

Legal Advisers to the Companyas to English law

Berwin Leighton Paisner LLPAdelaide HouseLondon BridgeLondonEC4R 9HA

Legal Advisers to the Companyas to Guernsey law

Carey OlsenPO Box 98Carey HouseLes BanquesSt Peter PortGuernseyGY1 4BZ

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Legal Advisers to the SoleFinancial Adviser, Sponsor andBookrunner

Lawrence Graham LLP4 More London RiversideLondonSE1 2AU

Reporting Accountants andAuditors of the Company

PricewaterhouseCoopers CI LLPPO Box 321Royal Bank PlaceGlategny EsplanadeSt. Peter PortGuernseyGY1 4ND

Auditors of the Master Fund PricewaterhouseCoopers Accountants N.V.Fascinatio Boulevard 350P.O. Box 88003009 AVRotterdamThe Netherlands

Receiving Agent Capita Registrars LimitedCorporate ActionsThe Registry34 Beckenham RoadBeckenhamKentBR3 4TU

UK Transfer Agent Capita Registrars LimitedThe Registry34 Beckenham RoadBeckenhamKentBR3 4TU

Principal Bankers The Bank of New York Mellon, London BranchOne Canada SquareLondonE14 5AL

Custodian of the Master Fund BNY Mellon International Bank LimitedRiverside TwoSir John Rogersons’s QuayGrand Canal DockDublin 2Ireland

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EXPECTED TIMETABLE

All references to times in this Prospectus are to London times unless otherwise stated.

Latest time and date for receipt of Application Forms underthe Offer for Subscription 1.00 p.m. on 7 March 2011

Latest time and date for receipt of Placing commitments 4.00 p.m. on 8 March 2011

Announcement of the results of the Issue 7.00 a.m. on 9 March 2011

Admission of the Ordinary Shares to the premium listing segment of theOfficial List and commencement of unconditional dealings on theLondon Stock Exchange 8.00 a.m. on 14 March 2011

CREST accounts credited by 14 March 2011

Despatch of definitive share certificates (where applicable) week commencing 21 March 2011

The dates and times specified above are subject to change. In particular, the Directors may with the priorapproval of the Sponsor bring forward or postpone the closing time and date for the Placing and Offer forSubscription by up to two weeks. In the event that such date is changed, the Company will notifyinvestors who have applied for Ordinary Shares of changes to the timetable either by post, by electronicmail or by the publication of a notice through a Regulated Information Service.

ISSUE STATISTICS

Offer Price per Ordinary Share 100 pence

Unaudited estimated initial Net Asset Value per OrdinaryShare on Admission+ approximately 98 pence

Number of Ordinary Shares being issued* 100,000,000

ISIN of the Ordinary Shares GG00B628S547

Estimated Available Net Proceeds* £98,000,000

+ On the basis of the Assumptions.

* Assuming gross Issue proceeds of £100 million.

The Available Net Proceeds reflects deductions for Issue expenses, the Subscription Premium payable bythe Company in respect of its committed investment in the Master Fund and an amount to be retained bythe Company for working capital purposes. The Investment Adviser will reimburse the Company (or paycertain of its expenses) in the event such deductions are greater than 2 per cent of the gross Issueproceeds such that the Available Net Proceeds will be an amount not less than 98 per cent of the grossIssue proceeds.

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PART 1

THE COMPANY

1. INTRODUCTION

The Company is a newly formed, Guernsey incorporated closed-ended investment company. TheCompany has agreed pursuant to the Commitment Letter to invest the Available Net Proceeds of theIssue in the Master Fund.

The Master Fund is a Cayman limited partnership with an existing portfolio of investments with a netasset value as at 31 December 2010 of £46.4 million. The Master Fund will utilise the commitment of theCompany and its other funds available for investment (being commitments of the other Limited Partners)to invest in and provide debt for commercial real estate, primarily in the UK and Germany andadditionally in the rest of the EU, Norway and Switzerland. Such investments will be made throughwholly owned subsidiaries of the Master Fund, i.e. the Luxembourg Company or such other investmentvehicle as is appropriate. A summary of the European commercial real estate debt market and theinvestment opportunity is set out in Part 3 of this document. Further information in relation to the MasterFund, including its investment objective, policy and strategy, is set out in Part 4 and Part 10 of thisdocument.

The target size of the Issue is £100 million. However, in the event that there is excess demand, theCompany may raise more than £100 million. The Company has committed pursuant to the CommitmentLetter to invest the Available Net Proceeds in the Master Fund. The Available Net Proceeds is anamount equal to the gross proceeds of the Issue less deductions for Issue expenses, the SubscriptionPremium payable by the Company in respect of its Commitment and an amount to be retained by theCompany for working capital purposes. The Investment Adviser will reimburse the Company and/or paysome of its Issue expenses in the event such deductions are greater than 2 per cent of the gross Issueproceeds such that the Available Net Proceeds will be an amount not less than 98 per cent of the grossIssue proceeds. Consequently, if the gross Issue proceeds are £100 million, the Company will commit toinvest a minimum of £98 million in the Master Fund.

Following Admission, other than the ownership of its Interest and cash held in relation to theCommitment, the Company will not have any other substantial assets or business. As a result, theCompany’s financial performance will depend on the performance of its investment in the Master Fund.

Certain directors/employees of the Investment Adviser (including the Principals) have committed toinvest in the Master Fund, directly or indirectly, an amount representing 1 per cent of the totalcommitments by Limited Partners to the Master Fund as at the Final Closing Date. As part of thiscommitment, the Principals have committed to subscribe to the Issue.

The Master Fund has a fixed life and is expected to terminate on 22 December 2014 (subject to the powerto extend its life by up to two years and one month as detailed in paragraph 2.1 of Part 10 of thisdocument).

2. THE COMPANY’S INVESTMENT POLICY

The Company’s investment objective is to provide Shareholders, through its investment in the MasterFund, with regular dividends and an attractive total return whilst limiting downside risk to capital throughexposure to European commercial real estate debt.

The Company may utilise borrowings in order to finance market purchases of its own shares and tofinance its working capital requirements, provided that borrowings will not exceed an amount equal to20 per cent of the Company’s Net Asset Value immediately following draw down.

3. INVESTMENT OPPORTUNITY

Disruption in the financial markets, coupled with a changing regulatory framework, has significantlyrestricted the availability of debt for financing commercial real estate across Europe. The key factorsdriving this have been:

. excessive levels of debt on lending banks’ balance sheets built up over the last decade, leading to thebanks’ desire to deleverage their balance sheets;

. falling property values resulting in increased LTV ratios;

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. the requirements on banks to maintain greater amounts of regulatory capital as a result of the BaselII and Basel III accords, making it more expensive for a bank to make loans that are above a 60 to65 per cent LTV ratio and thereby restricting the amount of debt that banks will provide against anasset; and

. the lack of liquidity from other financing sources such as CMBS.

In addition, approximately half of the A960 billion1 of debt backed by European commercial real estate isexpected to require refinancing in the next three years. The banks have already signalled to the markettheir intention to shrink their balance sheets as an alternative to refinancing, thereby creating a debtfunding gap in the market. Further details relating to the market background can be found in Part 3 ofthis document.

Given this capital-constrained market place and the wall of maturities over the next few years, non-bankproviders of debt finance have the potential to generate significantly higher returns than previouslyavailable. The Investment Adviser therefore believes that the risk adjusted returns currently available toproviders of debt finance in the commercial real estate sector present an attractive investmentopportunity. Furthermore, the Investment Adviser believes that the Master Fund’s approach of primarilyproviding mezzanine finance backed by high quality assets with a strong tenant base represents the bestrisk adjusted approach to capitalising on this opportunity. The high cash paid coupon of the investmentsalso generates an attractive income profile.

In addition to the above, the Directors and the Investment Adviser believe that an investment in theCompany offers the following benefits and advantages:

. the Company will be the only UK-listed company focused primarily on investing in mezzanine debtfor European commercial real estate;

. the opportunity to invest in the LTV portion of the capital structure that was previously consideredto be senior debt, whilst providing significantly higher returns than senior debt;

. exposure to an investment that is expected to provide a regular cash return as part of an attractivetotal return;

. the Master Fund has an existing portfolio of investments that already generates income. TheCompany therefore expects to pay a dividend in July 2011 representing a yield of 3-4 per cent2

based on the Offer Price;

. access to an investment adviser that has the capabilities, experience and industry contacts requiredto originate and manage debt investments in the European commercial real estate market;

. the Master Fund has a significant pipeline of potential investments which should assist in thedeployment of the Master Fund’s available capital (including the Available Net Proceeds); and

. the opportunity to invest at what the Investment Adviser believes to be the optimum time tocapitalise on this opportunity.

4. DEBT FACILITIES OF THE COMPANY

The Company will not use debt for investment purposes. The Company will not have any debt facilities inplace at Admission, although the Company may arrange for a suitable debt facility to be put in place indue course. Any borrowings would be used only for the purposes of financing market purchases of theCompany’s shares in the circumstances described in section 11 of this Part 1 and to finance the Company’sworking capital requirements when required from time to time. The Company’s borrowings will notexceed an amount equal to 20 per cent of its Net Asset Value immediately following draw down.

5. TARGET RETURNS

The Master Fund is targeting a Gross IRR of 15 per cent or greater per annum, with a cash incomecomponent that provides for a net distribution to Limited Partners in excess of 7 per cent per annum, asoutlined in Part 4. The cash income component reflects the anticipated cash coupon that the Master Fundexpects to receive on its investments once fully invested, and will be distributed to Limited Partners(including the Company) net of expenses and management fees.

1 Source: CB Richard Ellis report, ‘‘The Funding Gap: Is Mezzanine Lending the Solution?’’, Winter 2011.

2 Annualised, assuming total Master Fund commitments from Limited Partners of £300 million.

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The returns to investors in the Company will be dependent on the ability of the Master Fund to achieveits target return and the period over which the funds available to the Master Fund for investment(including the Available Net Proceeds) are deployed. The Master Fund expects to be fully investedwithin 12 months of Admission. The Company’s policy in relation to cash awaiting investment is set out inparagraph 17 of this Part 1.

The Company is targeting a cash yield of 7 per cent per annum on each Ordinary Share (by reference tothe Offer Price) which reflects the anticipated income that will be received by it from the Master Fund,adjusted for Company-specific fees, costs and expenses and any portion of the income received from theMaster Fund and retained by the Company for working capital purposes.

The Company will have exposure to the Master Fund’s existing portfolio (further details of which areincluded in Part 5) and the Company expects to pay a dividend in July 2011 representing a yield of3-4 per cent2 based on the Offer Price. This will reflect a distribution received from the Master Fund lessany Company specific expenses.

6. DISTRIBUTION POLICY

The Company will, as far as reasonably practicable and taking into account the requirements of theGuernsey Companies Law, the reasonable costs of the Company and its working capital requirements,distribute by way of dividend payments all cash income that it receives from the Master Fund. TheCompany may also seek to return capital (in accordance with the Guernsey Companies Law and theArticles) if, and to the extent that, the Directors consider this to be appropriate.

The Master Fund is expected to pay a distribution to Limited Partners (including the Company) in July2011 following the end of the June Quarter Month. Consequently, the Company expects to pay its firstdividend on its Ordinary Shares shortly following receipt of such distribution. Thereafter, the Companyintends to distribute all cash income received from the Master Fund (less costs and any sum required tobe retained to meet its ongoing working capital requirements) by way of quarterly dividends, in line withthe frequency of payment of distributions by the Master Fund to its Limited Partners. The Companyanticipates paying those dividends shortly after the receipt by the Company of the relevant distributionsfrom the Master Fund.

The Company anticipates that the dividend will increase as the Available Net Proceeds and thecommitments of the other Limited Partners are invested by the Master Fund. Once the Master Fund’scapital has been fully invested, which is expected within 12 months of Admission, the Company will targetdividend payments to Shareholders of 7 per cent per annum on each Ordinary Share (by reference to theOffer Price).

The Company’s ability to pay dividends at the level it is targeting will be substantially reliant on theachievement by the Master Fund of its investment objectives.

7. FEES AND EXPENSES

Formation and initial expenses

The initial expenses of the Company are those which are necessary for the Issue and will be borne by theCompany. Should the amount of such expenses, the Subscription Premium payable by the Company inrespect of its commitment to invest in the Master Fund and the amount of any working capital notcommitted to be invested in the Master Fund exceed an amount equal to 2 per cent of the gross Issueproceeds, the Investment Adviser has agreed to reimburse the Company and/or meet its expenses suchthat the Available Net Proceeds which will be committed to be invested by the Company in the MasterFund pursuant to the Commitment Letter will not be less than 98 per cent of the amount of the grossIssue proceeds. Consequently, if the gross Issue proceeds are £100 million, the Company will commit toinvest a minimum of £98 million in the Master Fund.

The initial expenses relating to the Issue will be paid on or around Admission and will include, withoutlimitation, placing fees and commissions, registration, listing and admission fees, the cost of settlementand escrow arrangements, printing, advertising and distribution costs, legal fees and any other applicableexpenses. All such expenses payable by the Company will be immediately written off.

2 Annualised, assuming total Master Fund commitments from Limited Partners of £300 million.

23

Other fees and expenses

The Company is responsible for its own ongoing operational costs and expenses which include (but arenot limited to) the fees and expenses of the Administrator, the Directors and the Auditors, as well aslisting fees, regulatory fees, expenses associated with any purchases of or tender offers for OrdinaryShares, printing and legal expenses and other expenses (including insurance and irrecoverable VAT).

In addition, the Company will pay a fixed annual fee of £25,000 to the Investment Adviser inconsideration of a range of services outlined in the Company Investment Advisory Agreement assummarised in paragraph 8.5 of Part 9 of this document. The Company may incur further fees payable tothe Investment Adviser to the extent that it obtains advice from the Investment Adviser that is outsidethe scope of the services covered by the Company Investment Advisory Agreement and is not similar inscope and/or nature to advice already provided, or in the course of being provided, to the Master Fundpursuant to the Master Fund Investment Advisory Agreement. Such advice will be provided on a basis tobe agreed in advance between the Company and the Investment Adviser. In the event that the MasterFund is approaching the end of its fixed life and it makes in specie distributions to its Limited Partners,the Company has the option (but not the obligation) pursuant to the Company Investment AdvisoryAgreement to retain the Investment Adviser to advise it upon the management and realisation process inrespect of such in specie distributions on the terms set out in the Master Fund Investment AdvisoryAgreement.

The Company will not otherwise be liable to pay any management or advisory fees to the InvestmentAdviser.

The ongoing costs of the Company are estimated to be approximately £320,000 per annum.

Master Fund fees and expenses

The Investment Adviser will receive an annual Advisory Fee in relation to the Company’s Interest of1.5 per cent (plus VAT if applicable) per annum of the Company’s Commitment, payable quarterly inadvance from the Initial Closing Date to the end of the Investment Period. After the end of theInvestment Period, the Advisory Fee in relation to the Company’s Interest shall be 1.5 per cent (plusVAT if applicable) per annum of the proportion of the total acquisition cost of all Investments whichremain unrealised at the start of the relevant quarter and which have not been written off, as is equal tothe proportion that the Company’s Interest bears to the aggregate Interests of all the Limited Partners.

The Investment Adviser may at its discretion enter into arrangements with investors in the Placing orOffer for Subscription pursuant to which it will effectively return to such investors a proportion of theAdvisory Fee or Carried Interest in respect of the investor’s ‘‘look through’’ commitment in the MasterFund (being its shareholding in the Company).

Pursuant to the Distribution Waterfall which is described in paragraph 6 of Part 4 and paragraph 2.1 ofPart 10 of this document, the Special Limited Investor will receive a total of 20 per cent of the proceeds ofthe Master Fund that are available for distribution, subject to Limited Partners first receiving an amountequal to their capital and the Preferred Return on the amounts drawn down from them respectively.

Further details of the costs, fees and expenses of the Master Fund are set out in paragraph 8 of Part 4 ofthis document.

8. HEDGING POLICY

Interest rate hedging may be carried out by the Company to seek to provide protection against increasinginterest rates as and when any floating rate liabilities are entered into by the Company. The Company’sexposure to such floating rate liabilities is likely to be limited to permitted gearing as referred to inparagraph 4 above.

9. NAV PUBLICATION AND VALUATION

The Master Fund’s Investments are valued quarterly as at the last Business Day of each Quarter Month.The valuation methodology employed by the Master Fund is set out in paragraph 4 of Part 4 of thisdocument. Limited Partners are also notified quarterly of their individual financial position in respect oftheir Interest. Following the valuation of the Investments being completed and being notified to theCompany and the other Limited Partners and the Company being notified of the financial position inrespect of its Interest, in each case as described in paragraph 4 of Part 4, the Administrator will, basedupon the valuations of the Investments and the financial position in respect of the Company’s Interest,but taking into account the cash and other assets held by the Company, accrued liabilities and expenses

24

and leverage (if any) of the Company, calculate the NAV of the Company and of the Ordinary Shares asat each Valuation Date. The quarterly NAV of the Company and of the Ordinary Shares will beannounced through a Regulated Information Service and published on the Company’s website atwww.dreflimited.com.

10. FURTHER ISSUES OF ORDINARY SHARES

The Articles confer pre-emption rights on existing Shareholders in connection with the allotment ofequity securities for cash. These rights, which are summarised in paragraph 3.9 of Part 9 of this document,have the effect that, in the event of a further allotment of equity securities in the Company for cash, suchequity securities as are proposed to be allotted shall be first offered to existing Shareholders pro rata inproportion to their existing respective holdings of shares in the Company on either the same or morefavourable terms. Pursuant to the extraordinary resolution described in paragraph 2.3 of Part 9 of thisdocument, such pre-emption rights have been disapplied in respect of the allotment of Ordinary Sharespursuant to the Placing and Offer for Subscription, any rights issue by the Company and the allotment ofsuch number of Ordinary Shares as is equal to 9.99 per cent of the number of Ordinary Shares in issueimmediately following Admission. The subscription price for any Ordinary Shares allotted by theCompany in the future will be the then-prevailing NAV per Ordinary Share or greater, except in the caseof a pre-emptive offer to all Shareholders, which may be at a discount to NAV or otherwise, with theapproval of Shareholders.

11. ORDINARY SHARE REPURCHASES

Conditional upon Admission, the Company has been granted authority (subject to the Listing Rules andall other applicable legislation and regulations) to make market purchases of up to 14.99 per cent perannum of its issued Ordinary Shares immediately following Admission. This authority will expire at theconclusion of the first annual general meeting of the Company.

A renewal of the authority to make purchases of Ordinary Shares will be sought from Shareholders ateach annual general meeting of the Company. The timing of any purchases will be decided by the Boardin light of prevailing market conditions and will be made within guidelines established from time to timeby the Board. However, such purchases will be made only in accordance with applicable law, the ListingRules and the Disclosure and Transparency Rules in force from time to time, or any successor laws, rulesor regulations. The Listing Rules currently provide that where the Company purchases its OrdinaryShares the price to be paid must not be more than the higher of (i) 105 per cent of the average of themarket values of the Ordinary Shares for the five trading days immediately before the Ordinary Share iscontracted to be purchased and (ii) the amount stipulated by Article 5(1) of the Buy-back andStabilisation Regulation 2003.

12. LIFE OF THE COMPANY AND THE MASTER FUND

The Master Fund terminates on 22 December 2014 unless extended at the discretion of the GeneralPartner for a maximum of two years and one month by the addition of a one year period and a one yearand one month period. Any assets remaining on termination of the Master Fund which are attributable tothe Limited Partners will be distributed to the Limited Partners (including the Company). The GeneralPartner anticipates the distribution being made in cash. However, the General Partner may in itsdiscretion, distribute all or any of the Master Fund assets in specie. In such circumstances, wherereasonably practicable, each Limited Partner will be offered the choice as to whether to receive theMaster Fund assets in specie or as cash. In the case of the Company, assets distributed to it in specie wouldbe realised over time and, as noted above, the Company has the option (but not the obligation) to receiveadvice in respect of that management and realisation process from the Investment Adviser under theCompany Investment Advisory Agreement or can choose to appoint another adviser to advise on thatprocess.

13. MEETINGS AND REPORTS TO SHAREHOLDERS

All general meetings of the Company will be held in Guernsey. The Company will hold an annual generalmeeting each year, with the first annual general meeting to be held not later than 7 June 2012.

The Company’s audited annual report and financial statements will be prepared to 31 December in eachyear. The Company’s first financial period commenced on the date of the Company’s incorporation andwill end on 31 December 2011. The Company will also publish an unaudited half-yearly report each year.The Company’s first half-yearly report will be prepared in relation to the period from incorporation ofthe Company to 30 June 2011. The Company will also issue interim management statements within the

25

meaning of the Disclosure and Transparency Rules during the period commencing ten weeks after thebeginning and ending six weeks before the end of the first six-month period and the second six-monthperiod of each financial year. In relation to the financial period ending 31 December 2011, an interimmanagement statement is expected to be issued in October 2011. As an alternative to issuing interimmanagement statements, the Company may choose (but is not obliged) to issue unaudited quarterlyfinancial reports. The Company is not required to issue preliminary profit statements.

The Company’s annual financial report and financial statements will be available through a RegulatedInformation Service.

The Company’s financial statements will be drawn up in pounds sterling in compliance with IFRS and theGuernsey Companies Law.

14. DISCLOSURE OBLIGATIONS

The provisions of Chapter 5 of the Disclosure and Transparency Rules (as amended from time to time)(‘‘DTR 5’’) of the UK Financial Services Authority Handbook apply to the Company on the basis thatthe Company is a ‘‘non-UK issuer’’, as such term is defined in DTR 5. As such, a person is required tonotify the Company of the percentage of voting rights it holds as a shareholder or holds or is deemed tohold through the direct or indirect holding of financial instruments falling within DTR 5 if, as a result ofan acquisition or disposal of shares (or financial instruments), the percentage of voting rights reaches,exceeds or falls below the relevant percentage thresholds being, in the case of a non-UK issuer, 5, 10, 15,20, 25 30, 50 and 75 per cent. Pursuant to the Articles, DTR 5 is deemed to apply to the Company asthough the Company were a ‘‘UK issuer’’, as such term is defined by DTR5. As such, the relevantpercentage thresholds that apply to the Company are 3, 4, 5, 6, 7, 8, 9, 10 per cent and each 1 per centthreshold thereafter up to 100 per cent notwithstanding that in the absence of the relevant provisions ofthe Articles such thresholds would not apply to the Company.

15. TAXATION

Information concerning the tax status of the Company and of an investment in Ordinary Shares is set outin Part 8 of this document. If any potential investor is in any doubt about the taxation consequences ofacquiring, holding or disposing of Ordinary Shares, they should seek advice from their independentprofessional adviser.

16. EQUALISATION PROCESS

On or shortly following the Company becoming a Limited Partner, the General Partner will draw down asufficient amount of the Company’s commitment in the Master Fund to ‘equalise’ draw downs across allLimited Partners. The equalisation payment is made to ensure that the amounts available to be drawn inthe future from each Limited Partner are proportionate to each Limited Partner’s commitment.

17. CASH AWAITING INVESTMENT

Cash held by the Company and awaiting investment in the Master Fund may be held as cash or investedin Eligible Investments.

‘‘Eligible Investments’’ means (a) sterling demand or time deposits, certificates of deposit and short-termdebt obligations (including commercial paper), provided that in all cases such investments will maturegiven ten Business Days’ notice and the short-term unsecured, unguaranteed and unsubordinated debtobligations of the issuing or guaranteeing entity or the entity with which the demand or time deposits aremade (being a bank or licensed EU credit institution) are rated ‘‘A-1+’’, ‘‘P-1’’ and ‘‘F1+’’ by Standardand Poor, Moody’s or Fitch respectively and (b) any sterling denominated money market fund rated atleast ‘‘AAA’’ by Standard and Poor or ‘‘Aaa’’ and ‘‘MR1+’’ by Moody’s or ‘‘AAA’’ by Fitch.

The credit ratings referred to above are issued by Standard & Poor’s Financial Services LLC, FitchRatings Ltd and Moody’s Investors Service, which are credit rating agencies that are not established inthe European Union and are not at the date of this document registered under Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies.

18. CASH MANAGEMENT

The Limited Partnership Agreement characterises payments to Limited Partners under the DistributionWaterfall such that Limited Partners’ commitments are deemed to be returned first, followed by thepayment of the Preferred Return. Further returns are shared between Limited Partners and the Special

26

Limited Investor pursuant to the Distribution Waterfall. However, this may not reflect how HMRCwould characterise those payments to the Company, in that HMRC may have regard to the underlyingreturns from the Master Fund to characterise those payments. In light of this potential difference, and inparticular because the rights of the Special Limited Investor in relation to the Carried Interest arise onlyonce Limited Partners are deemed to have received their commitments together with the PreferredReturn, it may become necessary for the Company, the Master Fund and the Cayman Company to worktogether towards the end of the life of the Master Fund to implement certain procedures to try to ensurethat Shareholders are taxed in the anticipated manner in respect of income generated and capitalreturned from the underlying Investments of the Master Fund. These procedures may involve, inter alia,managing the cash flows out of the Cayman Company by accruing against income received by theCayman Company from Investments in respect of the Special Limited Investor’s anticipated rights inrelation to the Carried Interest and holding cash from such accrual in the Cayman Company (rather thanpaying the cash corresponding to such accrual to the Master Fund and, in turn, to Limited Partners underthe Distribution Waterfall).

27

PART 2

MANAGEMENT AND ADMINISTRATION OF THE COMPANY

1. BOARD OF DIRECTORS

The Articles provide that the Company’s Board of Directors shall be comprised of at least two directors.The Company currently has three Directors, all of whom are non-executive directors. The Directors willmeet on a regular basis in Guernsey to review and assess the investment policy and performance of theCompany and generally to supervise the conduct of its affairs.

The Directors and their business experience are as follows:

Quentin Burgess FRICS (60) (Chairman)

Quentin Burgess, a UK resident, is an experienced investment manager, having some 30 years experienceof working in the real estate fund management sector. He currently works for AXA Real EstateInvestment Managers in London, specialising in Risk Management and Governance. He has extensiveexperience of both UK and Pan European real estate, holding a number of directorships of fundsoperating across Europe.

Prior to joining AXA, Mr Burgess was a Director of Hermes Property Asset Management working in anumber of senior positions advising the British Telecom Pension Scheme and Royal Mail Pension Plan.Mr Burgess also spent eight years in the property team at Friends Provident Life Office.

Mr Burgess is a Fellow of the Royal Institution of Chartered Surveyors and a member of the PropertyInvestment Forum.

John Falla (49)

John, a Guernsey resident, is a Chartered Accountant and has a BSc Hons degree in Property Valuationand Management from The City University, London. He is a Chartered Fellow of the Chartered Institutefor Securities and Investment having been awarded their diploma. He is a Corporate Finance Directorwith LCF Edmond de Rothschild (C.I.) Limited in Guernsey.

John joined Ernst & Young in London in 1984 as a trainee in the Audit Department and moved to theCorporate Finance Department in 1989, becoming a Senior Manager before moving back to Guernsey in1996.

On his return to Guernsey John joined Bermuda Trust Company (Guernsey) Limited, part of the Bank ofBermuda Group as Trust Development Manager focusing on business development as well as dealingwith Private Trust and Employee Benefit fiduciary and corporate structures.

In 1998 John was part of the team that launched the Channel Islands Stock Exchange and he set up thelisting department responsible for vetting applications for listing and monitoring compliance withcontinuing obligations. He was a member of the Market Authority of the Exchange and contributedtowards the development of the listing rules of the Exchange.

In 2000 John joined LCF Edmond de Rothschild (C.I.) Limited and has provided Corporate Financeadvice to clients including open and closed-ended investment funds, and institutions with significantproperty interests. John is on the board of a number of Edmond de Rothschild group operating andinvestment companies.

David Staples (53)

David, who is resident in Guernsey, has a BSc in Business Economics and Accounting from theUniversity of Southampton. He is a fellow of the Institute of Chartered Accountants in England andWales and a Chartered Tax Adviser. He also holds the Institute of Directors’ Diploma in CompanyDirection.

David joined PricewaterhouseCoopers in the UK (‘‘PwC’’) in 1978 and became a partner in 1990. Davidremained at PwC until 2003 and held a number of senior positions during that time, including head of taxfor the South East region.

David is currently on the boards of a number of listed companies, being MedicX Fund Limited, a leadinginvestor in large, purpose-built GP surgeries (of which he is chairman), Gottex Fund ManagementHoldings Limited, a global alternative investment management group, Aberdeen Private Equity Fund

28

Limited, Signet Global Fixed Income Strategies Limited and Henderson Far East Income Limited. He isalso a director of the general partners of four of Apax Partners’ private equity funds.

David is also the chairman of the Chartered Institute of Taxation in Guernsey.

2. CORPORATE GOVERNANCE

Audit Committee

The Company has established an Audit Committee which comprises all the Directors. David Staples isthe Chairman of the Audit Committee. The Audit Committee will meet as often as required and at leasttwice a year. The Audit Committee’s main functions include, inter alia, making recommendations to theBoard in relation to the appointment and remuneration of the Company’s auditors and monitoring andreviewing annually their independence, objectivity, effectiveness and qualifications. The AuditCommittee will also monitor the integrity of the financial statements of the Company, including itsannual and interim reports and any preliminary results announcements.

The Audit Committee will be responsible for overseeing the Company’s relationship with the externalauditors, including deciding upon the appointment of the external auditors and their remuneration. TheAudit Committee will consider the nature, scope and results of the auditors’ work and reviews anddevelop and implement policy on the supply of non-audit services that are to be provided by the externalauditors. The Audit Committee will focus particularly on compliance with legal requirements, accountingstandards and the relevant Listing Rules and ensuring that an effective system of controls is maintained.The ultimate responsibility for reviewing and approving the annual report and accounts will remain withthe Board.

Remuneration and Nomination Committee

The Company has established a Remuneration and Nomination Committee which comprises all theDirectors, with Quentin Burgess as the Chairman. The Remuneration and Nomination Committee willmeet not less than once a year and will have responsibility for considering the remuneration of theDirectors. It will also: (i) identify individuals qualified to become Board members and select the directornominees for election at general meetings of the Shareholders or for appointment to fill vacancies; (ii)determine director nominees for each committee of the Board; and (iii) consider the appropriatecomposition of the Board and its committees.

Management Engagement Committee

The Company has established a Management Engagement Committee which comprises all the Directors,with John Falla as the Chairman. The Management Engagement Committee will meet not less thanonce a year. The Management Engagement Committee’s main function is to review and makerecommendations on any proposed amendment to the investment advisory contract between theCompany and the Investment Adviser and keep under review the performance of the Investment Adviserin its role as investment adviser to the Company.

The Company currently complies with, and will comply from Admission with, the AIC Code, and inaccordance with such Code will be meeting its obligations in relation to the UK Corporate GovernanceCode and associated disclosure requirements of the Listing Rules.

AIC Code

The Company will be a member of the AIC on Admission and is classified as a Specialist Debt Companyby the AIC.

The Directors have also adopted a code of directors’ dealings in Ordinary Shares, which is based on theModel Code for directors’ dealings contained in the Listing Rules (the ‘‘Model Code’’). The Board willbe responsible for taking all proper and reasonable steps to ensure compliance with the Model Code bythe Directors.

3. THE COMPANY’S INVESTMENT ADVISER

The Investment Adviser is authorised and regulated by the UK Financial Services Authority. It is also theInvestment Adviser of the Master Fund. The services provided by the Investment Adviser to theCompany pursuant to the Company Investment Advisory Agreement are summarised in paragraph 8.5 ofPart 9 of this document.

29

4. POTENTIAL CONFLICTS OF INTEREST

The Directors do not currently envisage a conflict arising between the duties of the Investment Adviser tothe Company and to the Master Fund respectively. However, in the event that any such conflict doesarise, the Directors will take all reasonable steps to ensure that there is no breach of the requirements ofthe Registered Collective Investment Scheme Rules 2008 and will, if required, obtain advice from anindependent third party adviser in place of the Investment Adviser in relation to the relevant matter.

5. ADMINISTRATOR OF THE COMPANY

The Administrator has been appointed as administrator and secretary of the Company pursuant to theCompany Administration Agreement. The Administrator will be responsible for the Company’s generaladministrative requirements, such as the maintenance of the Company’s accounting and statutoryrecords. A summary of the Company Administration Agreement is set out in paragraph 8.6 of Part 9.

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PART 3

BACKGROUND TO THE EUROPEAN REAL ESTATE DEBT MARKET ANDINVESTMENT OPPORTUNITY

1. COMMERCIAL REAL ESTATE CAPITAL STRUCTURE

European commercial real estate (‘‘CRE’’) is typically financed through a combination of debt andequity. The debt financing can be split into two parts: senior debt and mezzanine debt.

The senior debt portion of the capital structure is typically provided by a lending bank and is usually thelargest part of the capital structure. Historically, the senior loan has tended to represent up to 80 per centof the value of the real estate, but for the reasons described below, on new financings or refinancings ofexisting loans the senior debt portion is now a smaller percentage of the total debt required, typicallyrepresenting no more than 60 per cent to 65 per cent of the value of the real estate. The senior debt holdsthe greatest level of security with a first ranking mortgage over the assets, and has some protectionprovided by underlying layers of mezzanine debt and equity which would absorb any losses before thesenior lenders experience losses. Before any risk of capital loss to the senior debt holders, the value of theproperty would need to fall to such a level that both the equity and mezzanine debt have no value on asale. As an example, if the senior loan represents 65 per cent of the value of the commercial real estate atacquisition, there would only be a risk of capital loss for the senior lenders if the value of the commercialreal estate falls by more than 35 per cent.

The second part of the debt structure is the mezzanine debt. Mezzanine debt sits between the senior debtand the equity in the capital structure and carries a higher rate of interest than the senior debt. As anexample, a commercial real estate asset may be financed by 65 per cent senior debt, 15 per centmezzanine debt and 20 per cent equity. Whilst accepting more risk than the senior debt holder, themezzanine debt holder earns a higher return than the senior debt holder and is protected through havingsecond-ranking security over the underlying asset and, in addition, has the protection of the equity layersitting below it in the capital structure. In certain circumstances, the mezzanine debt holder may alsoshare in the equity upside of the underlying real estate. However, for mezzanine debt provided at80 per cent of real estate value and below, this is not very common.

The equity provider tends to be the borrower of the senior and mezzanine debt and is most exposed tomovement in value of the commercial real estate.

The diagram below illustrates the typical funding structure of a commercial real estate transaction whichwould be put in place in the current market:

Seniority

Mezzanine Debt

Senior Debt 65%

15%

20%Equity

2. MEZZANINE DEBT

Mezzanine debt is a form of funding which can be provided to assist in the financing of real estatetransactions. Mezzanine debt is used to fill the funding gap between senior debt (typically provided bybanks) and equity (typically provided by the owner of the property), normally occupying a position in therange of 65 per cent to 85 per cent of LTV of a given funding structure. Mezzanine debt earns a higherrate of return than senior debt (by way of either a higher coupon and/or a profit participation) whilstranking above equity in the funding ‘hierarchy’.

31

Mezzanine debt is the product of a negotiated process between the mezzanine lender, senior lender andthe equity investor and the terms on which mezzanine debt is provided therefore vary substantially, beinginfluenced by a range of factors including:

. the size and term of the senior debt tranche;

. the amount of equity within a given structure;

. the nature of the business plan for the particular property or portfolio;

. the potential forecast upside from a given property/portfolio and how great a profit participation isnegotiable;

. the initial yield profile of the property income;

. the required term of the mezzanine layer;

. the experience of the equity sponsor; and

. the property’s lease structure and the credit quality of the tenants.

Thus, in reality, mezzanine finance covers a broad variety of funding tools which vary greatly in terms ofrisk and commensurate return. At the lower risk end of the scale (i.e. 65 to 80 per cent LTV), the marketin which the Master Fund participates, mezzanine finance is sometimes referred to as ‘sub senior’ or Bloan positions. At the riskier end of the scale (i.e. 85 per cent or more LTV) it can be referred to as‘preferred equity’. In a larger property transaction there may be more than one mezzanine layer, withdifferent risk/return characteristics.

The maturity of mezzanine debt can vary but typically tends to be five years within the Europeancommercial real estate market in which the Master Fund invests. This is generally in line with thematurity on the senior debt. The borrower is required to make coupon payments to the holder of themezzanine debt, which is calculated as a percentage of the total amount of mezzanine debt outstanding.In addition to the cash paid coupon, the debt provider may also charge a payment-in-kind coupon whichis also calculated as a percentage of the total amount of mezzanine debt outstanding, but is ‘rolled up’with the capital of the loan and is required to be repaid with the capital balance at the end of the term ofthe loan.

In certain circumstances, for example where there is less of an equity cushion below the mezzanine layer,the mezzanine provider may also receive some equity upside in the event the value of the propertyincreases. The Master Fund does not intend to invest in riskier situations and hence does not anticipatethis representing a significant proportion of its returns.

Mezzanine debt tends to have an early payment protection mechanism built in, so that in the event theloan is repaid early the borrower is required to pay a premium, which can be significant, over theoutstanding balance.

The return to the mezzanine debt holder can be summarised by one or a combination of the following:

. a one-off debt arrangement fee, typically 1 to 2 per cent of the amount of the mezzanine debt;

. a fixed rate coupon payment, typically 9 to 15 per cent per annum, often split between a cash paidcoupon and a payment-in-kind coupon;

. a one-off exit fee, typically being 1 to 2 per cent of the amount of initial mezzanine debt provided;and

. in some cases, a profit participation agreement, typically being a percentage of the return beingearned by the equity provider.

The mezzanine provider would normally receive a second charge over the assets, subordinated to thesenior debt, and in certain circumstances may receive additional security over the holding company of theassets such that, in the event of default by the borrower, the mezzanine holder would seek to take controlof the equity and work alongside the senior lender to repay the debt.

Given the ongoing coupon payments attached to the mezzanine loans, the cumulative interest paymentsover the life of the loan de-risk the investment over time, particularly when compared to the equityholders, where the overall return is heavily weighted to the realisation of the asset. The recent increase incoupon spreads in new mezzanine debt, as described in detail below, further amplifies this effect.

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Cumulative Returns over the Life of the Investment

Cum

ulat

ive

Ret

urns

0%

20%

40%

60%

80%

100%

0 yrs 1 yrs 2 yrs 3 yrs 4 yrs

15%

79%

5 yrs

Mezzanine Equity

3. MARKET BACKGROUND

While detailed estimates vary slightly, there is approximately A960 billion1 of debt backed by Europeancommercial real estate. Much of this debt was originated in the 2005 to 2007 period. Approximately halfof the overall debt in the European market is backed by real estate in the United Kingdom and Germany.Importantly, nearly half of that debt is due to mature in the next three years. De Monfort University hasreported that over half of the UK’s commercial property loans are due to mature by the end of 2012 andover three quarters will come due before the end of 2014.

European CRE debt maturity Profile

175

150

125

100

75

50

25

0

2010

Source: CB Richard Ellis “European Commercial Real Estate Debt”, Spring 2010

UK Germany Rest of Europe

€ billion

2011 2012 2013 2014 2015 2016 Post 2017

Banks in Europe were the predominant providers of debt to finance commercial property. As an exampleof this, in the United Kingdom as of July 2010, the banks were estimated to have provided 76 per cent,while CMBS provided approximately 19 per cent. Prior to 2008 CMBS securitisation facilitated someliquidity for banks which had provided commercial mortgages, enabling them to sell tranches in a pool ofcommercial mortgages to third party investors, removing the exposure from the banks’ balance sheet.CMBS securitisation grew as an alternative provider of debt, particularly in 2006 and 2007, when thecapital markets were awash with cheap liquidity. The CMBS market grew rapidly but has now essentiallyclosed and, in the opinion of the Investment Adviser, is unlikely to return significantly in the short tomedium term as an alternative source of funding to facilitate refinancing of the upcoming loan maturities.Therefore, there is a requirement for non-bank capital to play a role in the financing of commercialproperty, particularly in Europe.

1 Source: CB Richard Ellis report, ‘‘The Funding Gap: Is Mezzanine Lending the Solution?’’, Winter 2011.

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Estimated Split of UK Real Estate Debt by Source

Banks76%

Corporate bonds

5%

CMBS19%

Source: Goldman Sachs Research, ‘‘Europe: Real Estate’’ 15 July 2010

Fuelled by the availability of cheap debt, commercial property values in the UK rose dramatically fromearly 2003 through to the end of 2007, when the credit contraction began. From the peak of the market inthe spring of 2007 to the trough experienced in 2009, property values declined by over 40 per cent.

A combination of higher property yields and lower income from rents drove prices lower. The recovery inUK property values since June 2009 has seen values rise by nearly 16 per cent in the past year. However,this overall rise in values masks a gap that continues between the performance of prime and secondaryassets. In addition, despite the recent improvement in values, it is estimated that commercial real estatevalues fell by 32 per cent during the period 2006 to 2011 and, as a consequence, it is estimated that theLTV ratio for the UK property investment market is around 100 per cent.

Outstanding UK Commercial Real Estate Debt

0

10,00 0

20,00 0

30,00 0

40,00 0

50,00 0

60,00 0

70,00 0

80,00 0

Pre-2005 2005 200 6 2 00 7 2 00 8 2 00 9

-60%

-40%

-20%

0%

20 %

40 %

60 %

80 %

100%

120%

140%

160%

Deb t Outstanding (LHS) Av Initial LTV (RHS)

Av Cu rrent Implied LTV (RHS) Av Capital Value Decline (RHS)£ million

Year of Loan Issuan ce

Source: CB Richard Ellis, “European Commercial Real Estate Debt – Two-Tier Market”, Winter 2009

In contrast to the UK, prime property in the Eurozone reduced in value by 18 per cent from peak totrough, a fall of less than half that experienced in the UK. The fall for all property was between 20 and25 per cent, secondary assets seeing much greater falls than prime. Not surprisingly, different countriesfared very differently but across Europe as a whole, capital values increased during the first half of 2010.However, like the UK, it appears that the rate of increase is slowing.

4. DEBT SECTOR BACKGROUND

Bank lending to UK property companies grew 20 per cent per annum between 2000 and 2007 leading tothe proportion of corporate loans which are to property companies rising from 16 per cent in March 1997

34

to 36 per cent in 2009. Bank lending still grew 9 per cent over the year to March 2009, most likelyreflecting borrowers drawing down on existing unused facilities. Goldman Sachs reported in 2009 that thelast time the UK had a slump, commercial real estate lending fell for the following 7 years to a low of16 per cent of bank books. They projected that if the banks follow a similar approach today it would takeuntil the end of 2014 before commercial real estate loan balances stopped falling. Assuming corporateloan portfolios grew by 5 per cent per annum over this period, loans to UK property would need todecline by over 40 per cent to return to the 1997 level of 16 per cent of overall portfolio size.

Banks are also facing challenges in refinancing their own debt, which helped drive loan book growth priorto 2009. European banks have an estimated A1.9 trillion of their own debt maturing over the next threeyears, of which A740 billion is maturing in 2011. Lloyds alone faces over A120 billion of maturing debtover the next three years.

RBS and Lloyds have announced that between them they will reduce the size of their exposure to UKcommercial property by £60 billion by 2014. Between those two lenders, the shrinkage accounts forapproximately one quarter of the market.

Given the amount of debt coming due for maturity over the next few years and the need, as illustratedabove, for the banks to shrink their exposure to the commercial real estate asset class, there is asubstantial debt funding gap in the market. DTZ have published a report that defines the debt fundinggap as the difference between existing debt and the debt available to replace it. According to the report,Europe has the largest debt funding gap for the 2011 to 2013 period, totalling $126 billion or 51 per centof the global figure.

0

20

40

60

80

100

120

56

US$bn Total %2011-13

2011 2012 2013

81

108 245

49

70

126 51%

29%

20%18

30

60

19

23

40

12

18

26

Europe Asia Pacific US

Debt Funding Gap by Region, 2011 – 2013

Source: DTZ Research, ‘‘Global Debt Funding Gap’’, 24 November 2010

This backdrop has led to a restricted supply across Europe for commercial real estate debt. Whateverdebt is available in the market is mostly targeted at prime properties. Even so, average LTV ratios fornew bank lending have fallen from 75 to 80 per cent on average to between 60 to 65 per cent.

35

Average Initial LTVs

60

65

70

75

80

85

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

60

65

70

75

80

85

Prime office Prime retail Secondary Retail Secondary office

Source: Merrill Lynch, “The Real View UK 2010”, 12 January 2010

Additionally, the cost of debt has increased as the banks face higher costs of financing their loanportfolios. While deposits are still priced attractively from the banks’ perspective, wholesale funding,which they source from the market, has become much more expensive. This has resulted in margins fornew loans expanding from approximately 100 basis points during the peak liquidity period to new levelsthat are more than twice the cost.

5. REGULATORY CHANGES

In addition to the expanding cost of funding for the banks, they are also required to maintain greateramounts of regulatory capital as a result of the Basel II and Basel III accords.

The introduction of the Basel II regime made commercial property lending more expensive by raising theamount of capital that banks would be required to hold against commercial property loans. Themechanism that was introduced in 2008 makes it significantly more expensive for a bank to make loansthat are above 60 to 65 per cent LTV ratio. Basel III, which will be phased in over the coming years, hasfurther raised the required capital that banks will need to hold as a percentage of risk-weighted assets.This has been identified as one of the biggest determinants for banks’ willingness to provide leverageagainst certain asset classes.

The capital expense associated with commercial property lending above 60 per cent LTV means that fewbanks, if any, will be providing this type of debt in the future. Given the concentrated role the banks havehistorically played in the market, the Investment Adviser anticipates that spreads on LTV lending over60 per cent will remain high in order to attract new non-bank capital into this space.

6. CHANGES IN THE CAPITAL STRUCTURE

The regulatory changes and market changes described above have led to a significant change to thetypical lending structure. The diagram below provides an illustrative example of how the financingstructure for commercial real estate has changed since 2007.

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Typical Commercial Real Estate Capital Structure

Pre-Q4 2007

Typical Commercial Real Estate Capital Structure

Today

Senior Debt(80%)

Mezzanine(10%)Equity(10%)

New Senior Debt(60%)

Mezzanine(15%)

Equity(25%)

Asset Value Fall

Spread:75 to 125 bps

Spread:250 to 350 bps

Spread:200 to 300 bps

Fixed Coupon:900 to

1500+bps

As mentioned above, lending banks are less willing to lend or refinance at the same loan-to-value ratios asin 2007 and before. Hence, in the above example, where an investor may have previously been able toobtain senior debt for up to 80 per cent of the property value, it may now only receive 60 per cent, and thespreads on the coupon payments have increased. Equity providers are now required to providesignificantly more equity. In the above example the equity layer has increased from 10 per cent to25 per cent.

The result of this change in senior lending is that the mezzanine layer now sits in a position in the capitalstructure that was previously considered ‘senior’ debt.

Therefore, an investor in mezzanine debt in today’s market typically receives greater capital protectionthan before, provided by the higher level of equity as a percentage of the asset’s value, and also receives ahigher return, driven by the increase in spreads. In addition, the falls in capital values already sustainedsince 2007 provide investors some comfort that they are not providing debt at the top of the market.

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PART 4

THE MASTER FUND

1. INTRODUCTION

The Master Fund is structured as an exempted limited partnership registered in the Cayman Islands. TheCayman Company is a wholly owned subsidiary of the Master Fund and the Luxembourg Company is awholly owned subsidiary of the Cayman Company. The Luxembourg Company holds the Investments,either directly or indirectly, and will directly or indirectly hold all future Investments.

The Master Fund was established on 2 January 2009 and has raised a total of £117.4 million ofcommitments. The Master Fund commenced operations on 22 December 2009, being the date of the firstdrawdown. The Master Fund is seeking to raise commitments of up to £300 million in aggregate. Thisamount may increase at the discretion of the General Partner. In addition to the Issue, the Master Fund isanticipating a final close prior to 22 June 2011 (or such later date that the Final Closing Date can beextended to in accordance with the Limited Partnership Agreement).

The Master Fund has made six investments since it commenced operations totalling approximately£60 million, of which one has been realised at a profit of £1.1 million, representing an IRR in respect ofthat investment of 23.9 per cent. Details of the Master Fund’s investment portfolio are set out in Part 5 ofthis document.

The structure of the Master Fund and its subsidiaries is as set out in the following diagram:

100%

owned

100%

owned

Advice

Investment

Investment Adviser

TheMaster Fund

TheCayman Company

TheLuxembourg Company

Investment Investment

38

For tax, legal and regulatory reasons the Master Fund may, in exceptional circumstances and if it is in theinterests of a majority of Limited Partners (by reference to the sizes of the respective investmentcommitments to the Master Fund), form one or more alternative investment entities to make investmentsoutside of the Master Fund. Generally in such event investors participating in such an alternativeinvestment vehicle would participate on substantially the same terms and conditions as they participate inthe Master Fund.

2. INVESTMENT OBJECTIVE AND POLICY OF THE MASTER FUND

The Master Fund invests in, and provides, debt finance secured directly or indirectly on commercial realestate in the EU, Norway and Switzerland.

Investment objective

Investments made by the Master Fund are intended to maximise reward whilst managing downside risk,through investing in debt instruments. The Master Fund’s objective is to generate a Gross IRR of15 per cent or more per annum, with a cash income component providing for distributions to LimitedPartners in excess of 7 per cent per annum. Returns to Limited Partners will typically comprise interestpayments, dividends, capital repayment and gains at the point of maturity or realisation of an Investment.

The intention of the Master Fund is to invest in assets for the medium to long term. The Master Fund willgenerally retain its Investments until maturity, although it may take advantage of opportunities for salethat arise from time to time, bearing in mind the Master Fund’s investment policy and risk profile.

Investment policy

The Master Fund will make new loans as well as buying existing loans and bonds collateralised byEuropean commercial real estate. Investments are in debt instruments which benefit from the protectionof being a secured loan or bond. The Master Fund does not invest in single family residential real estate.These Investments are intended to be held for the medium to long term with a view to realising interestincome and possible long term capital gain.

Due to the Investment Adviser’s expectation that asset values will continue to be volatile, the DebtStrategy compels the Master Fund to prioritise risk mitigation over returns. Consequently, faced with achoice of achieving higher returns and taking less risk, the Master Fund will choose less risk, consistentwith achieving its targeted returns.

Debt Strategy – LTV and ICR metrics

The Master Fund invests in: (i) new debt where the initial LTV is equal to or less than 80 per cent of realestate value; and (ii) old debt where, in the Investment Adviser’s opinion, the LTV will be equal to or lessthan 80 per cent of the estimated value of the collateral at the time of acquisition of the debt and isprojected to be equal to or less than 90 per cent of the estimated value of the collateral at maturity. ThisLTV criteria will not apply when investing in debt where, at the time of acquisition, limited or norepayment of the principal amount is anticipated. An external valuation will be used when available andcommercially viable.

The Master Fund will invest in assets which have interest coverage ratio (ICR) of no less than 1:1.

Adherence to the Debt Strategy will be overseen by the Advisory Committee (described in paragraph 4below) once it has been formally established.

Target countries and investment restrictions

The Master Fund’s focus is on the largest and most mature real estate markets in Western Europe, beingthe UK and Germany. The Master Fund also considers investments elsewhere in the EU, Norway andSwitzerland.

The following investment restrictions apply to the Master Fund each time the Master Fund makes anInvestment:

. each debt Investment shall be made in accordance with the Debt Strategy;

. it is the intention of the Master Fund not to invest more than 15 per cent of total commitments inany one Investment or, before the Final Closing Date, 15 per cent of the Master Fund Target Size;and

39

. the Master Fund will not invest in single family residential real estate.

The following investment restrictions apply to the Master Fund following the end of the InvestmentPeriod in respect of the Master Fund making Investments and Follow-On Investments:

. at least 70 per cent of the Master Fund’s total Investments shall be in the UK and Germany but nomore than 60 per cent of the Master Fund’s total Investments shall be in the UK;

. no more than 15 per cent of the Master Fund’s total Investments shall be in any one of the Tier BCountries (being Austria, Belgium, Denmark, Italy, Luxembourg, Netherlands, Finland, France,Sweden, Norway and Switzerland) and no more that 30 per cent of the Master Fund’s totalInvestments shall be in the Tier B Countries in total; and

. no more than 5 per cent of the Master Fund’s total Investments shall be in any one of the Tier CCountries (being Ireland, Spain, Portugal, Czech Republic, Hungary, Poland, Slovenia andSlovakia) and no more that 10 per cent of the Master Fund’s total Investments shall be in the Tier CCountries in total.

Protection against exchange rate and interest rate movements

The Master Fund’s Investments will typically be made in the currency of the country where theunderlying asset(s) are located. This will largely be in Pounds Sterling and Euros. Investments may beconsidered in other European currencies that are freely transferable. The Master Fund may implementmeasures designed to protect the Investments against material movements in the exchange rate betweenPounds Sterling and the currency in which certain Investments are made. The analysis as to whether suchmeasures should be implemented will take into account periodic interest, principal distributions ordividends due, as well as the expected date of realisation of the Investment.

The Master Fund will invest in both fixed and floating rate instruments and the Master Fund may put inplace interest rate hedging strategies designed to protect the Investments against interest ratemovements.

Borrowing and leverage

It is not the intention of the Master Fund to pursue a geared strategy and the Master Fund will onlycontract leverage on terms intended to minimise risk and will ensure that it secures covenants andmaturity profiles at least matching the underlying Investments. Leverage will be employed only at therelevant asset level with no recourse to the other Master Fund assets.

The Master Fund, either directly or indirectly through a special purpose vehicle, may make borrowings:(i) to cover temporary cash flow deficits; (ii) for the purpose of funding the completion of an Investment,provided that the committed term of the borrowing is at least as long as the remaining term of theInvestment acquired; (iii) for further investment in an existing Investment; and/or (iv) for any otherpurpose of the Master Fund, provided that the aggregate of all outstanding borrowings, and theguarantees and undertakings described below, shall not exceed 50 per cent of the total value of theMaster Fund’s assets calculated with reference to the historical cost when purchasing such assets.

The Master Fund may, either directly or indirectly through a special purpose vehicle, enter intoguarantees and undertakings in connection with an Investment or in respect of the obligations of aportfolio company, provided that the committed term of the borrowing is at least as long as the remainingterm of the Investment acquired or to be acquired. The liability outstanding under such guarantee orundertaking shall not exceed the value of the Investment to which it relates and together with any otheroutstanding borrowings, guarantees or undertakings made by the Master Fund, shall not exceed50 per cent of the total value of the Master Fund’s assets calculated with reference to the historical costwhen purchasing such assets.

The Master Fund may arrange for a revolving credit facility to enable the Fund to acquire Investments byway of borrowing instead of, in advance of, or contemporaneously with the drawdown of commitmentsfrom Limited Partners.

3. THE MASTER FUND’S INVESTMENT STRATEGY

The strategy

The Master Fund’s strategy is to invest in and provide debt for commercial real estate primarily in theUK and Germany and additionally in the rest of the EU, Norway and Switzerland. The Master Fundprovides new financing directly to borrowers, as well as purchasing existing loans and bonds at a discount

40

from current lenders/owners. The Master Fund might also participate in equity upside through hybridstructures whilst benefiting from the downside protection of being a secured loan provider.

The Master Fund will diversify investments by sector and looks to invest in assets which have strongunderlying cashflows.

The Master Fund’s Investments are expected to fall broadly into three categories:

. New financings: Where possible under applicable laws and regulations, the Master Fund willprovide new financing directly to borrowers or refinance existing loans coming to maturity. Theseinvestments are intended to provide for very strong structuring with tight covenant packages. It maybe possible in some cases to use hybrid structures to gain upside exposure through ‘‘equity kicker’’mechanics or convertible features whilst maintaining the downside protection of a secured loanstructure.

. Existing loans: The Master Fund may acquire existing loans directly from lenders in need ofrecapitalisation and unwilling or unable to hold these loans to maturity. Through these investments,the Master Fund may be able to exercise a degree of control through covenant packages and directnegotiations with borrowers.

. Mortgage securities: The Master Fund may acquire CMBS bonds on selected transactions wherecurrent market pricing of these securities is viewed to be advantageous due to the current creditmarket conditions and where the fundamentals of the underlying real estate remain strong. In thesesituations, the Master Fund will usually be passive due to the smaller percentage of ownershipwithin the overall capital structure of these transactions.

The Investments are expected to include other features such as defined legal maturities, amortisationrequirements, security arrangements (mortgages, share pledges, charges over rent and other receivablesand locked box accounts). Whilst Investments may be subordinated to the rights of senior lenders, theMaster Fund will endeavour to accede to or to structure intercreditor agreements with the other lendersinvolved in the transactions in order to regulate and secure the rights of the Master Fund. The InvestmentAdviser intends that these agreements will set out, inter alia, enforcement mechanics, priority ofpayments and overall governance of the relationship between various classes of lenders.

4. INVESTMENT PROCESS OF THE MASTER FUND

The Master Fund will make investment decisions based on advice and recommendations from theInvestment Adviser which have been approved by the Investment Committee as complying with theMaster Fund’s strategy.

The Investment Adviser has established an investment process that seeks to optimise decision-making bycombining a well-informed due diligence process with speed of execution. The investment process issummarised in the diagram below.

Sourcing /Screening

Underwriting Approval Execution Monitoring /Reporting

Sourcing

The Principals are responsible for sourcing potential real estate debt investments, both in existing andnew facilities. It is anticipated that this sourcing will arise largely from banks. The Principals will forwardthe potential investments to the Investment Adviser’s investment team and oversee valuation, structuringand analysis.

Underwriting

The Investment Adviser is responsible for preparing full analysis of the debt investment. This starts withasset fundamentals including:

. in-house asset by asset valuations; and

. stress testing for cash flows and exits.

41

The approach to any proposed investment will be determined after asset diligence and the InvestmentAdviser will seek to optimise risk and reward by limiting downside risks while securing optimal pricing.Terms and conditions of loans will be structured to protect the Investment and, where possible, allow foractive position management. The Investment Adviser will analyse new loans and existing loans with asimilar approach.

In underwriting potential deals for the Master Fund, the Investment Adviser will:

. use historical information such as cap rates, net operating income and vacancy rates to stress inputsto valuation for historical low periods in the property cycle;

. examine future possible valuation outcomes by looking at market expectations embedded inproperty derivatives and other forward looking estimates provided by third parties;

. adjust information for property type, location and other property level fundamentals that maydifferentiate the target asset from the average property type; and

. create an expected future value as well as a likely value range, stressing multiple input factors.

In this process the Investment Adviser resizes a loan based on original capital value to one appropriatefor expected market conditions. By reassigning value the Investment Adviser provides a template formaking a new loan or acquiring an existing loan with appropriate downside protection and returnrequirements.

Once all stress testing is complete, the Investment Adviser will take the proposed transaction to theInvestment Committee. The Investment Committee will review the proposed transaction and decidewhether to approve the Investment Adviser’s recommendation. If the Investment Committee approves aproposed transaction, the Investment Adviser will put the proposed transaction to the Cayman Companyfor consideration which, in turn, if it decides to approve that proposed transaction, will put the proposedtransaction to its subsidiary, the Luxembourg Company, for consideration. The Cayman Company andthen (where the Cayman Company decides to approve the proposed transaction) the LuxembourgCompany will analyse the proposed transaction and make the final decision as to whether the proposedtransaction should proceed.

Ongoing Responsibility

The Investment Adviser is responsible for creating and implementing asset level business plans includingrecommending to the Cayman Company disposal of investments as well as producing quarterlymanagement reports.

The Investment Committee

The General Partner has established an Investment Committee to review, on behalf of Limited Partners,transactions proposed to the Master Fund by the Investment Adviser. The Investment Committee willconvene when required for approving/declining the putting to the Cayman Company of new Investmentsproposed by the Investment Adviser, considering extraordinary items and the ongoing monitoring of theFund, and will convene at least quarterly during the life of the Fund to:

. ensure adherence to the Master Fund’s objectives;

. review Investments and strategy;

. review Master Fund performance, including quarterly performance, cash-flows and budgets; and

. review indicators and market commentary of European property markets and outlooks onunderlying real estate sectors.

The Investment Committee will have at least two members including, at all times, the Key Individual andan individual appointed by the Seed Investor. Dale Lattanzio (as the Key Individual) and AndrewWalker (as the individual appointed by the Seed Investor) have been appointed to the InvestmentCommittee and are its current members. The General Partner may appoint further members of theInvestment Committee.

All votes of the Investment Committee will be decided by majority consent, provided that the appointeesof the Investment Adviser and the Seed Investor may each veto any decision of the InvestmentCommittee.

42

In the event the Investment Committee rejects an investment put forward by the Investment Adviser,neither the Investment Adviser nor the Seed Investor nor any of their respective Associates, may acquirean interest in such investment.

The Advisory Committee

The Advisory Committee’s role is to oversee the activities of the Investment Adviser and the MasterFund. It shall meet when requested by the Master Fund, the Investment Committee or by any LimitedPartner (but, in any event, at least once in every calendar year) to carry out, amongst others, the followingtasks:

. to review any amendments to the investment objective, borrowings or other material terms of theMaster Fund’s investment strategy and to make recommendations with respect thereto to theInvestment Adviser and the Master Fund;

. to review any potential conflict between the Investment Adviser, or any of its Associates, and theMaster Fund and between the Master Fund and any other fund managed by the InvestmentAdviser, or any of its Associates;

. to review the Investment Adviser’s and General Partner’s adherence to the documentation relatingto the Master Fund, the Debt Strategy and the Master Fund’s hedging policy; and

. to review any valuation of the Investments and any investment proposal it may wish to review.

The function of the Advisory Committee shall be to consult with the Master Fund in relation to the abovematters. The Advisory Committee’s decisions are of an advisory nature only and the Master Fund is notrequired to follow any advice or recommendation of the Advisory Committee. The Advisory Committeehas no authority to take part in the management or control of the business of the Master Fund. TheAdvisory Committee has the power to approve appointments of one or more replacements to the KeyIndividual as detailed in paragraph 2.1 of Part 10 of this document.

Each member of the Advisory Committee has one vote in respect of any decision on which the AdvisoryCommittee holds a vote.

Each Limited Partner which has made a commitment of £25m or more in the Master Fund may appointone member of the Advisory Committee. The General Partner may use its discretion to allow investorswith a commitment of less than £25m to appoint a member to the Advisory Committee. Non-investorsmay be appointed as members of the Advisory Committee by the General Partner, provided that eachsuch appointment is first approved by the existing Limited Partner members of the Advisory Committee.The Company will have the right to appoint a member of the Advisory Committee. The Companyintends to exercise this right and intends to appoint one of the Directors to represent it on theAdvisory Committee.

The Advisory Committee will be formally established after the Final Closing Date.

Post Close Monitoring and Business Plan Execution

There will be ongoing reviews of the performance of each portfolio asset. A business plan will be createdfor each asset in order to maximise value by choosing the optimal exit plan. These will undergo periodicreview, to account for changing market conditions.

Suitable professional asset management firms will be engaged should foreclosure be viewed as the bestroute to realising value. The Principals will oversee the execution of the ‘‘hard asset’’ business plans andultimate exit.

Valuation & Reporting

The Investment Adviser will ascribe a valuation for each asset quarterly. Market values will be usedwhere visible markets exist. Loans made directly to borrowers for which no market exists will be valued atamortised cost. Values will be ascribed using IFRS. Third party valuations, market levels and othervaluation sources will be reviewed and audited as part of the annual audit.

Annual financial statements of the Master Fund prepared in accordance with IFRS will be made up to31 December in each year.

The Master Fund will issue a quarterly investor report setting out, inter alia, all cash flows received, anycapital inflows or outflows and the fair value and status of the Investments. The report will also present

43

the current position of the Master Fund with respect to the Master Fund’s guidelines and policies. Finallythe report will provide narrative about the market and deal pipeline. Each Limited Partner will receive anindividual statement showing its financial position in respect of its Interest.

Meetings of investors

Meetings of investors in the Master Fund shall be called at least once per year and at such other times asthe Master Fund, the Investment Adviser, the Advisory Committee or investors representing at least75 per cent of total commitments to the Master Fund may determine.

5. THE MASTER FUND’S CURRENT PORTFOLIO AND PIPELINE OF FUTURE ASSETS

Information in relation to the Master Fund’s current portfolio of Investments and its pipeline of potentialfuture Investments is set out in Part 5 of this document.

6. DISTRIBUTION POLICY

Policy

The Master Fund will make distributions of cash income (net of expenses), if any, quarterly, or morefrequently at its discretion.

Proceeds that are available for distribution shall be distributed in the following proportions and order ofpriority (the ‘‘Distribution Waterfall’’):

(a) first, 100 per cent to the Limited Partners pro rata to the amount of their respective commitmentsuntil all Limited Partners have received distributions in aggregate equal to the amounts drawn downfrom them respectively (to the extent not previously distributed);

(b) second, 100 per cent to the Limited Partners pro rata to the amount of their respective commitmentsuntil all Limited Partners have received an amount equal to the Preferred Return on the amountsdrawn down from them respectively (to the extent not previously repaid);

(c) third, 40 per cent to the Limited Partners, pro rata to the amount of their respective commitments,and 60 per cent to the Special Limited Investor, until the cumulative distributions to the SpecialLimited Investor made under this paragraph (c) equal 20 per cent of the total amounts distributedunder paragraph (b) above and this paragraph (c); and

(d) fourthly, 80 per cent to the Limited Partners pro rata to the amount of their respective commitmentsand 20 per cent to the Special Limited Investor.

The Special Limited Investor will escrow 50 per cent of amounts distributed to it pursuant to theDistribution Waterfall (less an amount required to meet any tax liability of the Master Fund in relation toits Carried Interest entitlement). At the end of the life of the Master Fund, if Limited Partners have notreceived distributions equal to the greater of (i) their drawn down commitments and their PreferredReturn; and (ii) their drawn down commitments plus an amount equal to 80 per cent of the excess of alldistributions made to them and the Special Limited Investor over the aggregate amount of the drawndown commitment from Limited Partners, the escrow amount will be drawn and paid to Limited Partners(but not to the Special Limited Investor) to meet the required shortfall amount. However if the escrowamount is insufficient to meet the shortfall, the Special Limited Investor will not be required to make upany remaining shortfall.

Timing of distributions

Distributions of interest and dividend income shall be made at least quarterly and are expected to bemade within 30 days of the end of each Quarter Month. Distributions of cash proceeds from RealisedInvestments will be made as soon as practicable following such realisation, provided, however, that theMaster Fund may retain prudent reserves in respect of potential liabilities of the Master Fund includinganticipated Advisory Fees and other expenses.

The Master Fund will generally seek to make investments with a maturity date prior to the scheduled endof the life of the Master Fund. At the end of the life of the Master Fund any funds remaining will bedistributed. The General Partner anticipates the distribution being made in cash. The General Partnermay, in its discretion, distribute all or any of the Master Fund assets in specie. In such circumstances,where reasonably practicable each Limited Partner will be offered the choice as to whether to receive theMaster Fund assets in specie or as cash.

44

7. THE INVESTMENT ADVISER

Duet Private Equity Limited is the Investment Adviser of the Master Fund pursuant to the terms of theMaster Fund Investment Advisory Agreement.

Under the terms of the Master Fund Investment Advisory Agreement, the Investment Adviser’sappointment may be terminated, inter alia, by either the Cayman Company or the Investment Advisergiving notice in writing to the other party if either of them commits a material breach of the agreementand fails to rectify the same within 90 days of being requesting in writing to do so. Further details of theMaster Fund Investment Advisory Agreement are set out in paragraph 2.7 of Part 10 of this document.The Investment Adviser shall be entitled to resign on a notice being served on the General Partnerterminating the Master Fund by investors that hold commitments which, in aggregate, exceed 75 per centof total commitments to the Master Fund. In such circumstances, the Investment Adviser shall be entitledto a payment of six months’ Advisory Fee and the Special Limited Investor shall be paid an amount equalto all amounts which would have been due to it pursuant to the Distribution Waterfall had all theInvestments been realised at the date of termination of the Master Fund (based upon the value of theunderlying Investments at the time of termination) and the Co-Sponsors and the Management Investorshall be paid an amount equal to the amount drawn down in respect of their commitments to theMaster Fund.

Further details on the Investment Adviser are set out in Part 6 of this document.

8. FEE STRUCTURE AND FEES

Advisory and performance fees

The Investment Adviser receives an annual Advisory Fee of 2 per cent (subject to the reduction below)(plus VAT if applicable) per annum of total commitments, payable by the Cayman Company quarterly inadvance from the Initial Closing Date to the end of the Investment Period. The Advisory Fee shall becalculated on the basis of aggregate commitments at the Final Closing Date.

After the end of the Investment Period, the Advisory Fee shall be 2 per cent (subject to the reductionbelow) (plus VAT if applicable) per annum of the total acquisition cost of all Investments which remainunrealised and which have not been written off, calculated by reference to the opening balance in relationto the quarter prior to that in which the Advisory Fee is charged.

For Limited Partners that make a commitment of £25 million or more (which will include the Company)the Advisory Fee will in effect be reduced to 1.5 per cent per annum. Arrangements have been enteredinto by the Master Fund with other Limited Partners that have made a commitment of less than £25mpursuant to which the Advisory Fee payable by such Limited Partners has been reduced by a lesseramount. Similar arrangements may be entered into in the future with other Limited Partners. TheInvestment Adviser may at its discretion enter into arrangements with investors in the Placing or Offerfor Subscription pursuant to which it will effectively return to such investors a proportion of the AdvisoryFee or Carried Interest in respect of such an investor’s ‘‘look through’’ commitment in the Master Fund(being its shareholding in the Company).

The Advisory Fee is paid to the Investment Adviser quarterly in advance from the Initial Closing Dateuntil the termination of the Master Fund. If the Cayman Company has insufficient income and gainsavailable to pay the Advisory Fee, a corresponding amount will be advanced by the Master Fund to theCayman Company (out of sums drawn down pursuant to commitments) to pay the Investment Adviser,on account of future income and gains. If future income and gains are insufficient, the amounts advancedwill be written off upon termination of the Master Fund.

Pursuant to the Distribution Waterfall, the Special Limited Investor will be entitled to a total of20 per cent of the proceeds of the Master Fund that are available for distribution, subject to LimitedPartners first receiving an amount equal to the Preferred Return on the amount drawn down from themrespectively. Further details of the Distribution Waterfall are set out in paragraph 6 above and in thesummary of the Limited Partnership Agreement in paragraph 2.1 of Part 10 of this document.

Other fees, costs and expenses

The Investment Adviser will not charge acquisition fees to the Master Fund in relation to the MasterFund’s investments.

All reasonable costs and expenses associated with operating the Master Fund including, withoutlimitation, third party reporting, administration, custody, tax compliance, regulatory, accounting and legal

45

costs together with audit and certification fees and costs of the Advisory Committee will be borne by theMaster Fund. Any fees, costs and expenses incurred in relation to transactions that are not completed willbe borne by the Master Fund.

The Administrator has been appointed by the General Partner pursuant to the Master FundAdministration Agreement to act as the Administrator of the Master Fund. The Administrator isentitled to fees at its usual commercial rates. Further details in relation to the Master FundAdministration Agreement are set out in paragraph 2.2 of Part 10 of this document.

The Auditors have been appointed by the General Partner to act as the auditors of the Master Fund. TheAuditors are entitled to fees at the usual commercial rates.

9. INVESTMENT PERIOD

The Master Fund may make commitments to investment opportunities at any time up to 22 June 2012,being the date falling 30 months from the Initial Closing Date, or such earlier date as the General Partnermay determine provided that at such date at least 90 per cent of total commitments have been investedor committed for investment and/or used or reserved for Advisory Fees and expenses and/or reservedfor Follow-On Investments. The Investment Period may be extended by the General Partner for a periodof up to six months (i.e. until 22 December 2012 at the latest).

Any commitments not drawn down within the Investment Period will be cancelled except to the extentnecessary: (i) to pay ongoing Advisory Fees and operating expenses of the Master Fund; (ii) to makeinvestments pursuant to contractual obligations existing at the end of the Investment Period; and (iii) forFollow-On Investments (in addition to any included in (ii)) in existing Investments up to a maximumamount of 15 per cent of total commitments.

10. LIFE OF THE MASTER FUND

The Master Fund will terminate on 22 December 2014 unless extended at the discretion of the GeneralPartner for a maximum of two years and one month by the addition of a one year period and a one yearand one month period.

11. POTENTIAL CONFLICTS OF INTEREST

General

A number of actual and/or potential conflicts of interest may arise in relation to the Master Fund. In theevent that a conflict of interest does arise, the Master Fund will endeavour to ensure that it is resolvedfairly, taking into account the respective interests of the entities involved.

Composition of the Investment Committee

The Investment Committee will have at least two members including, at all times, the Key Individual andan individual appointed by the Seed Investor. Dale Lattanzio (as the Key Individual) and AndrewWalker (as the individual appointed by the Seed Investor) have been appointed to the InvestmentCommittee and are its current members. The General Partner may appoint further members of theInvestment Committee. A member of the Investment Committee may also serve on or occupy seniormanagement positions within the Investment Adviser or one or more Associates of the InvestmentAdviser. Given that the Investment Adviser may only proceed with a recommendation of an Investmentto the Master Fund if it has been approved by the Investment Committee, a member of the InvestmentCommittee may encounter conflicts of interest in his or her capacity as a director or employee of theInvestment Adviser or of an Associate of the Investment Adviser.

Allocation of investment opportunities

Where the Investment Adviser has recommended that the Master Fund should not proceed with aninvestment opportunity (irrespective of whether the decision was made on the grounds of any perceivedor actual conflicts of interest between the Master Fund and the Investment Adviser or between theMaster Fund and any one or more Associates of the Investment Adviser), then the Investment Adviser orany Associates of the Investment Adviser may not proceed with such investment opportunity for its ownaccount or for any of its clients (including any other funds that are managed or advised by the member orfor which the member is a general partner).

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Conflicts associated with Investments

In relation to Investments made by the Master Fund, members and/or employees of the InvestmentAdviser may serve as directors of investee companies and, in that capacity, will be required to makedecisions that consider the best interests of the relevant company and its shareholders. In certaincircumstances, for example in situations involving insolvency or near-insolvency of a portfolio company,actions that may be in the best interests of that company may not be in the best interests of the MasterFund, and vice versa. Accordingly, in these situations, there will be conflicts of interests between such anindividual’s duties as a member or employee of the Investment Adviser and their duties as a director ofthe portfolio company.

Interests of different investors

Different Limited Partners may have conflicting investment, tax and other interests with respect to theirInterests. The conflicting interests may relate to or arise from, among other things, the nature andstructuring of the Investments and the method or timing of their disposal. Consequently, in selecting andstructuring investments appropriate for the Master Fund, the Investment Adviser may make decisionswhich may be more beneficial for one Limited Partner than for another Limited Partner. In this regard,the Investment Adviser will consider the investment, tax and other objectives of the Master Fund as awhole, not the investment, tax or other objectives of any Limited Partner individually.

Investors’ interests in the Investments

A Limited Partner, including the Limited Partner’s directors, officers, employees or their associates, mayseek to invest in any Investments directly or via a separate investment mandate with a third party adviser.In other circumstances, the Master Fund may be offered an opportunity to invest in a target portfoliocompany in which a Limited Partner and connected parties may hold pre-existing interests, or occupypositions on the board of directors of, or key management positions within, the target portfolio company.

Where the Master Fund and a Limited Partner hold interests in a portfolio company, they may haveconflicting interests and investment objectives including with respect to the operation of that portfoliocompany, the targeted returns from such Investment and the timeframe for and method of exiting theInvestment. The Limited Partner may also be able to access confidential information with respect to, andreceive greater returns on the performance of, the portfolio company than would otherwise be madeavailable to or enjoyed by Limited Partners as a whole.

Where a Limited Partner and connected parties are directors or key management executives of aportfolio company, they may have an even greater access to sensitive commercial information relating tothe operation and investment strategies of the relevant portfolio company, as compared to other LimitedPartners or even the Master Fund itself.

Conflicts management

Any conflicts of interest that arise between the Master Fund and/or the Limited Partners on the one hand,and the Investment Adviser and any of its Associates or clients (including any other funds managed bysuch entities) on the other hand, will be discussed and resolved on a case-by-case basis in accordance withthe Investment Adviser’s conflict management procedures. The Investment Adviser shall also consult theAdvisory Committee when it deems appropriate in relation to such conflicts of interest. The interests ofthe relevant parties and the circumstances giving rise to the conflict will be considered during thediscussion and will be reflected in the final decision taken.

Exclusivity and non-compete

The Investment Adviser has agreed pursuant to the Master Fund Investment Advisory Agreement thatuntil the earlier of, inter alia, (i) the date that 75 per cent of the commitments of Limited Partners to theMaster Fund have been drawn down, committed for investment or reserved for Follow-On Investmentsand (ii) the end of the Investment Period, that neither it nor any of its Associates will invest, advise ormanage a fund with an investment policy and restrictions that are substantially similar to the Master Fund(a ‘‘Successor Fund’’).

Once the date referred to above has passed, the Investment Adviser undertakes to ensure that anyinvestment opportunity which is suitable for both the Master Fund and a Successor Fund will be offeredfirst to the Master Fund. To the extent that an investment opportunity remains available followinginvestment by the Master Fund or having been offered to the Master Fund to the extent it was declined,then the Investment Adviser may offer such investment opportunity to a Successor Fund.

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12. ADMINISTRATOR OF THE MASTER FUND

The Master Fund has appointed BNY Mellon Investment Servicing (International) Limited asAdministrator pursuant to the Master Fund Administration Agreement. The Administrator is aprivate limited liability company incorporated in the Republic of Ireland on 19 August 1993 underregistration number 206361. The Administrator is an indirect wholly-owned subsidiary of Bank of NewYork Mellon Corporation, which has authorised share capital of US$35,000,000 of whichUS$24,523,104.66 is issued and fully paid up with assets under administration of approximatelyUS$24.4 trillion as at 30 September 2010. The Administrator’s registered office is at Riverside Two, SirJohn Rogerson’s Quay, Grand Canal Dock, Dublin 2, Ireland. The Administrator’s main business activityis the provision of administrative services to collective investment schemes and other portfolios. Asummary of the Master Fund Administration Agreement is contained in paragraph 2.2 of Part 10 of thisdocument.

13. CUSTODIAN

BNY Mellon International Bank Limited has been appointed as custodian of the Master Fund pursuantto the Master Fund Cash Custodian Agreement.

BNY Mellon International Bank Limited has been appointed to act as cash custodian of the CaymanCompany pursuant to the Cayman Company Cash Custodian Agreement.

BNY Mellon International Bank Limited has been appointed, pursuant to the Luxembourg CompanyCustodian Agreement, to act as custodian of the Luxembourg Company.

The Custodian was incorporated in the Republic of Ireland on 24 May 1995 under the Irish CompaniesActs 1963-2009 as a limited liability company under registered number 233557 and is authorised andregulated by the Central Bank of Ireland (registration number C21840). The registered office andprincipal place of business of the Custodian is Riverside Two, Sir John Rogersons’s Quay, Grand CanalDock, Dublin 2, Ireland, and its telephone number is +353 15427920.

Summaries of the Master Fund Cash Custodian Agreement, the Cayman Company Cash CustodianAgreement and the Luxembourg Company Custodian Agreement are contained in paragraph 2.6 of Part10 of this document.

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PART 5

THE MASTER FUND’S CURRENT PORTFOLIOAND PIPELINE OF FUTURE ASSETS

Portfolio (as at the date of this document)

Portfolio Metrics Asset Types Region

Individual deals (as at the date of this document)

Nordic Retail

Amount Invested A19,459,000 . Prime retail property fully let to an investment grade tenant with25 year annual inflation uplifting leases

LTV 60-74% . Maturity: January 2015Cash Coupon 9.00% . Fees: 1% upfront, 1.5% exitPIK Coupon 5.00% . ICR: 1.28xProjected IRR 15.4%Projected Multiple 1.56x

UK Prime Office

Amount Invested £15,400,000 . Prime UK office let to Aa2 rated financial institution benefitingfrom a FRI lease with 14 years remaining

LTV 67-80% . Maturity: July 2015Cash Coupon 6.50% . Fees: 1% upfrontPIK Coupon 6.75% . ICR: 1.45xProjected IRR 14.2%Projected Multiple 1.80x

German Hotels

Amount Invested A14,528,000 . Portfolio of German hotels backed by a large private equityinvestor

LTV 44-55% . Maturity: February 2016Cash Coupon 13.20% . Fees: 1% upfront, 1% exitPIK Coupon – . ICR: 1.80xProjected IRR 14.3%Projected Multiple 1.69x

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UK Conduit (CMBS)

Amount Invested £9,717,892 . Securitisation comprising 8 loans and secured by 22 properties,mainly offices, located in the UK and Guernsey.

LTV 70% . Maturity: January 2013Cash Coupon 5.12%*Projected IRR 17.7%Projected Multiple 1.70x

UK Healthcare (CMBS)

Amount Invested £2,185,936 . Securitisation backed by portfolio of acute-care hospitals.LTV 58% . Maturity: October 2013Cash Coupon 3.97%*Projected IRR 14.4%Projected Multiple 1.60x

* Effective coupon on invested amount assuming a swap at 2.00%

Pipeline

The Investment Manager has categorised the current pipeline into two categories:

. Active – Investment opportunities that are in active negotiation; and

. Screening – Possible investments that the Investment Adviser is conducting its initial due diligenceon.

Below is a summary of the characteristics of the current pipeline.

Active Screening Total

Number of Transactions 13 26 39

Investment Amount £m 200 834 1,034

Number of Geographies 6 10 10

Average Transaction Size £15.4m £32.1m £26.5m

Percentage by asset type Office: 33%Retail: 53%Hotels: 0%

Industrial: 12%Mixed: 2%

Office: 20%Retail: 21%Hotels: 8%

Industrial: 0%Mixed: 51%

Office: 23%Retail: 27%Hotels: 7%

Industrial: 7%Mixed: 36%

Realised Investments

To date one investment has been realised. The Master Fund has sold its entire holding of CMBS bonds inthe Vanwall Finance transaction. Vanwall Finance is a securitisation of a loan backed by a portfolio ofToys R Us stores in the UK. The investment was made in May 2010 and realised through a sale inDecember 2010. The realised IRR on this investment was 23.9 per cent. The profit on this investment willaccrue for the benefit of all investors in the Master Fund, including the Company.

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PART 6

THE INVESTMENT ADVISER AND ITS EXPERIENCE, THE GENERAL PARTNER,THE SPECIAL LIMITED INVESTOR AND THE SEED INVESTOR

THE INVESTMENT ADVISER

The Investment Adviser was incorporated in England and Wales on 28 August 2001 under theCompanies Act 1985 as a limited liability company under registered number 04277869 and is authorisedand regulated by the Financial Services Authority (registration number 208161). The registered office andprincipal place of business of the Investment Adviser is 27 Hill Street, London W1J 5LP and thetelephone number is +44 (0)20 7290 9800.

The Investment Adviser is part of the Duet Group. The Duet Group is an alternative asset and wealthmanagement firm, focusing on Asset Management and Private Equity. The Duet Group is dedicated notonly to generating superior investment returns but also risk management, transparency and client serviceas required for institutional investors.

The Duet Group has sponsored 17 funds including private equity, real estate, hedge funds and structuredinvestments. Total assets under management stands at US$2.4bn as of 31 December 2010. TheInvestment Adviser is Duet Group’s private equity arm. The Investment Adviser has three investmentdivisions: Private Equity, Real Estate and Infrastructure, which specialise in the creation, structuring andongoing investment management of innovative private equity and real estate alternative assets, whereenhanced risk adjusted returns are achieved.

DEDICATED INVESTMENT TEAM

The Investment Adviser has a dedicated team for the Master Fund led by Dale Lattanzio, Rob Claytonand Cyrus Korat, who have strong track records of investing in real estate and who have an extensivenetwork of contacts from which to source further deals. Set out below are brief biographical details ofMessrs Lattanzio, Clayton and Korat.

Dale Lattanzio (Aged 46), Chief Investment Officer, European Real Estate Debt Fund; ManagingDirector, Duet Private Equity Limited

Dale Lattanzio has over 17 years of experience in capital markets and real estate. He joined DPEL inSeptember 2008. Previously, he was Co-Head of Global Commercial Real Estate at Merrill Lynch & Coand Managing Director and Co-Head of Americas Fixed Income, Currencies and Commodities(‘‘FICC’’). As Co-Head of Americas FICC, Mr Lattanzio was jointly responsible for running the FICCbusiness on an integrated basis across both sales and trading. He also held joint responsibility for theFirm’s Global Commercial Real Estate business, focusing on lending and principal investing businesses.Prior to September 2006 he spent nearly 8 years in London, holding various senior trading roles includingHead of Credit, Real Estate and Structured Products. He joined the Merrill Lynch Institutional ClientDivision in New York in 1993 following the completion of his MBA from Columbia University, where hehad a concentration in Finance, and he is also a member of the Columbia Business School Beta GammaSigma Honor Society. Mr Lattanzio also holds a BA in Economics from Dartmouth College.

Rob Clayton (Aged 50), Senior Investment Manager, European Real Estate Debt Fund

Rob Clayton has over 20 years experience in real estate and debt markets. He joined DPEL in August2008. Previously, he was Director of Structured Finance at the Topland Group of Companies, one of thelargest privately owned international property investment groups with property assets in the region ofA5bn. Prior to that Mr Clayton was a Director of CIT Group PLC and Glaven Investments Ltd. Between1991 and 1999 he worked for the Industrial Bank of Japan Ltd (‘‘IBJ’’) in London and the People’sRepublic of China with responsibility for, inter-alia, real estate lending. Mr Clayton has a BA HonsDegree in Economic and Social Studies from the University of East Anglia and is a Fellow of theSecurities Institute.

Cyrus Korat (Aged 38), Senior Investment Manager, European Real Estate Debt Fund

Cyrus Korat has over 13 years experience in real estate and capital markets. Previously he was aManaging Director and Head of EMEA Structured Credit Trading at Merrill Lynch & Co. In this role hewas responsible for a number of different trading desks, including ABS/Mortgage trading, a businessMr Korat started after joining Merrill Lynch in 2000. He was responsible for trading all securitised assetsacross all asset classes and in particular has significant experience in trading CMBS and RMBS. In 2008,

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he was also made responsible for the restructuring of Merrill Lynch’s residential mortgage platforms andasset finance business. Here he was responsible for the sale and workout of loans across numerous assetclasses, as well as the restructuring of a number of operating mortgage businesses, primarily in the UK.Whilst at Merrill Lynch Mr Korat started the property derivative trading desk, which grew to be themarket leader in this field. Mr Korat has led a number of innovative structured transactions, in the fieldsof commercial real estate lending, portfolio credit derivatives and corporate securitisations. Prior tojoining Merrill Lynch Mr Korat was an associate at Citibank/Salomon Smith Barney. He joined Citibankin London in 1995 following the completion of his BSc in Banking and Finance from LoughboroughUniversity.

THE GENERAL PARTNER

The General Partner is a limited company incorporated in the Cayman Islands. The directors of theGeneral Partner are Tue Sando and Andrew Walker. Information in relation to the relevant experienceof Mr Sando and Mr Walker is set out below. The Investment Adviser and FRIM (DDF Holdings)Limited (a company in the same group as the Seed Investor) each hold 50 per cent of the share capital ofthe General Partner.

Tue Sando (Aged 43)

Tue is General Counsel of the Investment Adviser. Prior to joining the Duet Group, Tue spent three anda half years at Merrill Lynch within the European Structured Finance group combining his legalbackground with asset backed securities capital markets. Prior to joining Merrill Lynch, between 1996and 2005 Tue worked at law firms Lovells, Reed Smith Richard Butler, GorrissenFederspiel Kierkegaardand Bech-Bruun & Trolle as a lawyer. Tue is a qualified solicitor under English and Danish law. He holdsan MA degree in law from London School of Economics (LL.M.) and an MA degree in law fromUniversity of Copenhagen.

Andrew Walker (Aged 48)

Andrew Walker is Managing Director and head of Forum Partners’ European team based in London. Asa co-founder of Forum Partners, he has enjoyed a 24-year career in real estate securities analysis andinvestment. Previously, he was a Vice President with Security Capital Group where he had corporateacquisition responsibilities. He was a senior officer of SC European Realty, a US$1.5bn European realestate partnership and a director of London and Henley S.A.. Prior to joining Security Capital Group in1996, Mr. Walker was a leading property analyst in the UK and Continental Europe, working for ParibasCapital Markets and prior to that, S.G. Warburg Securities (Japan) Ltd. Mr. Walker was ManagingDirector of Institutional Property Forecasting Services in the UK, a privately held real estate researchfirm. He graduated from Liverpool John Moores University with a bachelor’s of science degree in estatemanagement in 1983 and has been a member of the Royal Institution of Chartered Surveyors since 1986.

THE SPECIAL LIMITED INVESTOR

The Special Limited Investor is an exempted limited partnership registered in the Cayman Islands. TheSpecial Limited Investor has been granted rights under the Limited Partnership Agreement to receive theCarried Interest. The limited partners of the Special Limited Investor are FERI III (DDF Holdings)Limited (an entity controlled by the Seed Investor) and the Management Investor (in which certain of themembers of the senior management team of the Investment Adviser are interested).

THE SEED INVESTOR

The Seed Investor is Forum European Realty Income III, L.P., a private equity fund managed by ForumPartners Investment Management LLC and its affiliates. Forum Partners is a global real estate investmentmanagement firm with nearly US$3bn in assets under management on behalf of institutional investorsand family offices. Forum Partners is wholly-owned by its principals with over 60 employees in nineoffices across Europe, North America and Asia. Since its establishment in 2002, Forum Partners hasmade real estate structured debt and equity investments across 17 countries in Europe and Asia.

The Seed Investor has an interest in a limited partner of the Master Fund. In addition, the Seed Investoris the ultimate beneficial holder of 50 per cent of the issued shares of the General Partner and has aninterest in the Special Limited Investor, which is entitled to the Carried Interest. The Seed Investor mayalso receive a proportion of the Advisory Fee payable by the Master Fund to the Investment Adviser.The Seed Investor is entitled to appoint one member of the Investment Committee, as described inparagraph 4 of Part 4 of this document.

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INVESTMENT BY THE INVESTMENT ADVISER, THE SEED INVESTOR AND BY MEMBERSOF THE INVESTMENT ADVISORY TEAM

The Co-Sponsors have committed to invest £50 million in the Master Fund. Of this amount theInvestment Adviser has committed to invest £10 million to the Master Fund. Such commitments may bemet by funds managed by the relevant Co-Sponsor.

Certain directors/employees of the Investment Adviser (including the Principals) have committed toinvest in the Master Fund, directly or indirectly, an amount representing 1 per cent of the totalcommitments of Limited Partners to the Master Fund as at the Final Closing Date. As part of thiscommitment, the Principals have committed to subscribe to the Issue.

DUET GROUP PRINCIPALS

The Duet Group was established in 2002 by Alain Schibl and Henry Gabay. Osman Semerci joined asCEO in April 2008. Set out below are brief biographical details of Messrs Gabay, Schibl and Semerci.

Henry Gabay (Aged 43), Co-Founder and Chairman of Duet Group

Mr Gabay has been chief executive officer of Duet Asset Management Limited, an affiliate of DuetCapital, since 2002. Since 2006, he has been a non-executive director of South Asian Asset ManagementLimited, SARE’s property manager. From 2000 to 2002, Mr Gabay was chief executive officer of EphesusCapital Partners. Mr Gabay was previously a Director with CSFB from 1997 to 2000 in London and NewYork, where he was Head of Investment Banking for Israel and Turkey and Head of Equity Sales forEmerging Markets. From 1992 to 1997 he worked for Merrill Lynch in London and Geneva within theEquity Division. Mr Gabay graduated from the University of Geneva in 1991 with a degree in Financeand Economics.

Alain Schibl (Aged 45), Co-Founder and Chief Investment Officer of Duet Group

Prior to founding the Duet Group, Mr Schibl was a Managing Director with Union Bancaire Privee(UBP) in London and Geneva for 12 years, where he was in charge of the capital markets and tradingarm of the bank. Before UBP, Mr Schibl had been a trader on the floor of the Swiss Stock Exchange inGeneva on behalf of Warburg. Mr Schibl graduated from EPCL (Ecole Professionnel de Commerce deLausanne) in 1987 with a BA in Economics. He is also a board member of Biochema, Chalbat S.A.Switzerland and Grenat Immobilier.

Osman Semerci (Aged 43), Chief Executive Officer of Duet Group

Prior to joining the Duet Group in April 2008, Mr Semerci spent 16 years at Merrill Lynch, both inEurope and Asia, where he was a member of Merrill Lynch’s Global Operating Committee. Latterly hewas Global Head of Fixed Income, Currencies and Commodities (FICC), responsible for the firm’strading and sales activities in fixed income, currencies, commodities, principal investments and real estateglobally and President of Europe, Middle East and Africa (EMEA) Global Markets and InvestmentBanking. Mr Semerci holds a Post Graduate degree in Management from Marmara University in Istanbuland a Bachelor of Science degree in Electrical and Electronic Engineering from Bosphorus University inIstanbul.

Additional information

Osman Semerci was Head of Global Fixed Income, Commodities and Currencies at Merrill Lynch fromJuly 2006 until October 2007. An individual shareholder of Merrill Lynch, N.A. Lambrecht, has filed alaw suit in the United States against eleven current and former senior executives of Merrill Lynch andBank of America seeking compensation in respect of a wide variety of claims. As a result of his formermanagement role at Merrill Lynch, Mr Semerci is currently included (along with the ten otherdefendants, including various current and former senior executives of Merrill Lynch and Bank ofAmerica, two former CEOs of Merrill Lynch and the former and current CEOs of Bank of America) inthis shareholder derivative action. The claim relates to the financial difficulties Merrill Lynch facedduring the credit crisis. Bank of America is contesting all of the claims on behalf of the former andcurrent executives. Mr Semerci has no role in the provision of the investment advisory services by theInvestment Adviser to the Company or the Master Fund and as a result the Investment Adviser is of theopinion that such litigation will have no impact on its ability to perform its obligations in respect of theCompany or the Master Fund.

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PART 7

THE PLACING AND OFFER FOR SUBSCRIPTION

1. INTRODUCTION

The Company is seeking to raise approximately £100 million (before expenses) through the Placing andOffer for Subscription.

The Issue is not being underwritten and will not proceed if the net proceeds of the Issue would be lessthan the Minimum Net Proceeds. If the Issue does not proceed, subscription monies received will bereturned by way of crossed cheque without interest at the risk of the applicant as soon as practicable.

In the event that the net proceeds of the Issue would be less than the Minimum Net Proceeds, theCompany could only proceed with the Issue if it published a supplementary prospectus that waived thecondition to raise the Minimum Net Proceeds.

2. THE ISSUE

Application will be made for the Ordinary Shares to be admitted to the premium listing segment of theOfficial List and to trading on the Main Market of the London Stock Exchange.

It is expected that Admission will become effective and that dealings in the Ordinary Shares willcommence at 8.00 a.m. on 14 March 2011.

On the basis that the Issue is fully subscribed as to £100 million, the Available Net Proceeds would be atleast £98 million.

The Issue, which is not underwritten, is conditional upon:

(a) Admission occurring on or before 8.00 a.m. (London time) on 14 March 2011 or such time and/ordate as the Company and the Placing Agent may agree, being not later than 14 April 2011;

(b) the Placing Agreement having become unconditional in all respects (save for conditions relating toAdmission) and not having been terminated in accordance with its terms before Admission; and

(c) not less than the Minimum Net Proceeds (or such lesser number as the Company and the PlacingAgent may agree) being subscribed for pursuant to the Issue.

If these conditions are not met, the Issue will not proceed.

3. INVESTOR PROFILE

The Placing will primarily be marketed to institutional and sophisticated investors. Typical investorspursuant to the Offer are expected to be UK based asset and wealth managers regulated or authorised bythe FSA and some private individuals (some of whom may invest through brokers).

4. THE OFFER FOR SUBSCRIPTION

The Offer for Subscription will open on 18 February 2011 and the latest time for receipt of ApplicationForms will be 1.00 p.m. on 7 March 2011. Admission to the premium listing segment of the Official List isexpected to occur and unconditional dealings in the Ordinary Shares are expected to commence at 8.00a.m. on 14 March 2011.

The terms and conditions of applications under the Offer for Subscription and an Application Form areset out at the end of this Prospectus. These terms and conditions should be read carefully before anapplication is made. Potential investors should consult their respective stockbrokers, bank managers,solicitors, accountants or other independent financial advisers if they are in any doubt. ApplicationForms, accompanied by a cheque or duly endorsed banker’s draft, should be returned by post or by hand(during normal business hours only) to Capita Registrars, Corporate Actions, The Registry,34 Beckenham Road, Beckenham, Kent BR3 4TU by no later than 1.00 p.m. on 7 March 2011.

Applications under the Offer for Subscription must be for a minimum subscription amount of £5,000 andthereafter in multiples of £1,000 or such lower amount as the Placing Agent and the Company may decide(in their sole discretion).

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5. THE PLACING

The Company, the Investment Adviser, the Directors and the Placing Agent have entered into thePlacing Agreement, pursuant to which the Placing Agent has agreed, subject to certain conditions, to usereasonable endeavours to procure subscribers for the Ordinary Shares made available in the Placing atthe Offer Price in return for the payment by the Company of placing commissions to the Placing Agent.Placing commitments should be received no later than 4.00 p.m. on 8 March 2011.

Details of the terms of the Placing Agreement are set out in paragraph 6 of Part 9 of this document.

The terms and conditions which shall apply to any subscriber for Ordinary Shares pursuant to the Placingare set out at the end of this document.

The Placing Agent is entitled under the Placing Agreement to retain agents and may pay commission inrespect of the Placing to any or all of those agents out of its own resources.

Applications under the Placing must be for a minimum subscription amount of £50,000 or such loweramount as the Placing Agent and the Company may agree (in their sole discretion).

6. ISSUE EXPENSES

The initial expenses of the Company are those which are necessary for the Issue. The Investment Adviserwill reimburse the Company (or pay certain of its Issue expenses) in the event that the sum of suchexpenses, the Subscription Premium payable by the Company and the amounts retained by the Companyfrom the Issue proceeds in respect of its ongoing working capital requirements are greater than 2 per centof the gross Issue proceeds such that the Available Net Proceeds will be an amount equal to at least98 per cent of the gross Issue proceeds.

These expenses will be paid on or around Admission and will include, without limitation, placing fees andcommissions, registration, listing and admission fees, the cost of settlement and escrow arrangements,printing, advertising and distribution costs, legal fees and any other applicable expenses. All suchexpenses payable by the Company will be immediately written off.

7. SETTLEMENT

Payment for the Ordinary Shares applied for under the Placing should be made in accordance with theterms and conditions of the Placing set out at the end of this document. Payment for Ordinary Sharesapplied for under the Offer for Subscription should be made in accordance with the settlementinstructions contained in the Application Form set out at the end of this document. To the extent that anyapplication or subscription for Ordinary Shares is rejected in whole or in part, or the Directors determinein their absolute discretion that the Issue should not proceed, monies will be returned to each relevantapplicant by crossed cheque in favour of the applicant(s) at its risk and without interest.

The Company does not propose to accept multiple subscriptions. Financial intermediaries who areinvesting on behalf of clients should make separate applications or, if making a single application formore than one client, provide details of all clients in respect of whom the application is being made.Multiple applications or suspected multiple applications on behalf of a single client are liable to berejected.

8. CERTIFICATES AND CREST

The Ordinary Shares will be issued in registered form and may be held in certificated or uncertificatedform. Applicants under the Offer who wish their Ordinary Shares to be held in uncertificated form (thatis, in CREST) should ensure that they complete the details in Box 2B of the Application Form.Temporary documents of title will not be issued pending the despatch of definitive certificates forOrdinary Shares.

Dealings in the Ordinary Shares in advance of the crediting of the relevant CREST account or the issueof share certificates will be at the risk of the persons concerned.

9. MONEY LAUNDERING

Pursuant to anti-money laundering laws and regulations with which the Company must comply in the UKand/or Guernsey, the Company and its agents, the Administrator, the Investment Adviser and the PlacingAgent may require evidence in connection with any application for Ordinary Shares, including furtheridentification of the applicant(s) before any Ordinary Shares are issued.

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The Company and its agents, the Administrator, the Investment Adviser and the Placing Agent reservethe right to request such information as is necessary to verify the identity of the prospective Shareholderand (if any) the underlying prospective beneficial owner of the Ordinary Shares. In the event of delay orfailure by the prospective Shareholder to produce any information required for verification purposes, theDirectors, in consultation with the Placing Agent and the Investment Adviser, may refuse to accept asubscription for Ordinary Shares.

10. SCALING BACK AND ALLOCATION

In the event that aggregate applications for Ordinary Shares under the Placing and the Offer forSubscription were to exceed a level that the Directors determine, in their absolute discretion at the timeof closing the Issue, to be the appropriate maximum size of the Issue, it would be necessary to scale backapplications under the Issue. In any event, the maximum number of Ordinary Shares to be issuedpursuant to the Issue would be 200 million. The Placing Agent reserves the right, after consultation withthe Company, to scale back applications in such amounts as it considers appropriate. The Companyreserves the right to decline in whole or in part any application for Ordinary Shares pursuant to the Issue.The Offer for Subscription will not be subject to scaling back in favour of the Placing.

Accordingly, applicants for Ordinary Shares may, in certain circumstances, not be allotted the number ofOrdinary Shares for which they have applied.

The results of the Issue will be announced by the Company, on or around 9 March 2011 by way of anannouncement through a Regulated Information Service.

Monies received in respect of unsuccessful applications (or to the extent scaled back) will be returnedwithout interest at the risk of the applicant to the applicant from whom the money was received.

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PART 8

TAXATION

1. GENERAL

The statements on taxation below are intended to be a general summary of certain tax consequences thatmay arise in relation to the Company and Shareholders. This is not a comprehensive summary of alltechnical aspects of the structure and is not intended to constitute legal or tax advice to investors.Prospective investors should familiarise themselves with, and where appropriate should consult their ownprofessional advisers on, the overall tax consequences of investing in the Company. The statements relateto investors acquiring Ordinary Shares for investment purposes only, and not for the purposes of anytrade. As is the case with any investment, there can be no guarantee that the tax position or proposed taxposition prevailing at the time an investment in the Company is made will endure indefinitely. The taxconsequences for each investor of investing in the Company may depend upon the investor’s own taxposition and upon the relevant laws of any jurisdiction to which the investor is subject.

2. GUERNSEY TAXATION

The Company

The Company has applied for exempt status for Guernsey tax purposes. In return for the payment of afee, currently £600, a registered closed-ended investment scheme, such as the Company, is able to applyannually for exempt status for Guernsey tax purposes. If exempt status is granted, the Company will notbe considered resident in Guernsey for Guernsey income tax purposes. A company that has exemptstatus for Guernsey tax purposes is exempt from tax in Guernsey on both bank deposit interest and anyincome that does not have its source in Guernsey. It is not anticipated that any income other than bankinterest will arise in Guernsey and therefore the Company is not expected to incur any additional liabilityto Guernsey tax.

In response to the review carried out by the European Union Code of Conduct Group, the State ofGuernsey abolished exempt status for the majority of companies with effect from January 2008 and hasintroduced a zero rate of tax for companies carrying on all but a few specified types of activity. However,because investment funds including closed-ended investment companies, such as the Company, were notone of the regimes in Guernsey that were classified by the European Union Code of Conduct Group asbeing harmful, investment funds including closed-ended investment companies continue to be able toapply for exempt status for Guernsey tax purposes after 31 December 2007. Therefore, the Company willbe entitled to apply, and intends to continue applying, for tax exempt status in Guernsey.

In keeping with its ongoing commitment to meeting international standards, the State of Guernsey iscurrently undertaking a review of its tax regime with the expectation of implementing any requiredrevisions to the regime in the period between 2012 and 2015. At this point in time, the key features of anyrevised regime have yet to be determined. It is currently not anticipated that there will be any change tothe current exemption for investment funds and as such the Company is expected to be able to remain taxexempt.

Guernsey currently does not levy taxes upon capital inheritances, capital gains, gifts, sales or turnover,nor are there any estate duties, save for an ad valorem fee for the grant of probate or letters ofadministration. No stamp duty is chargeable in Guernsey on the issue, transfer, or redemption of shares.

Shareholders

Shareholders will receive dividends without deduction of Guernsey income tax. Any Shareholders whoare resident for tax purposes in Guernsey, Alderney or Herm will incur Guernsey income tax on anydividends paid on Ordinary Shares owned by them but will suffer no deduction of tax by the Companyfrom any such dividends payable by the Company where the Company is granted exempt status. TheCompany is required to provide details of distributions made to Shareholders resident in the Islands ofGuernsey, Alderney and Herm to the Administrator of Income Tax in Guernsey.

Guernsey has introduced measures that are the same as the EU Savings Tax Directive. However, payingagents located in Guernsey are not required to operate the measures on payments made by closed endedinvestment companies such as the Company.

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3. UNITED KINGDOM

The statements below relate to the UK tax implications of investing in the Company for (unlessspecifically stated otherwise) an individual who is resident, ordinarily resident and domiciled in the UK.The tax consequences may differ for investors who are not resident or ordinarily resident in the UK orare not domiciled in the UK for tax purposes. Investors and prospective investors should seek their ownprofessional advice as to this, as well as to any other relevant laws and regulations in the jurisdiction inwhich they are resident or domiciled for tax purposes. The statements are based on current tax legislationand HMRC practice, both of which are subject to change at any time, possibly with retrospective effect.The statements below apply in respect of investors who hold the Ordinary Shares as an investment andnot as part of a trade such as dealings in securities.

Taxation of the Company

The Directors intend to conduct the affairs of the Company in such a manner as to minimise, so far asthey consider reasonably practicable, taxation suffered by the Company. This will include conducting theaffairs of the Company to seek to ensure that it does not become resident in the UK for taxationpurposes. Accordingly, and provided the Company does not carry on a trade in the UK (whether or notthrough a permanent establishment situated therein) and is not centrally managed and controlled in theUK, the Company should not be subject to UK income tax or corporation tax other than on UKsource income.

Taxation of individuals

This paragraph provides general guidance for individual Shareholders who are UK resident andordinarily resident for UK tax purposes and who hold Ordinary Shares as investments and not astrading stock.

Individual Shareholders resident, ordinarily resident and domiciled in the UK will be liable to UKincome tax at their applicable marginal rates on dividend distributions made by the Company.Shareholders holding minority interests in the Company (being less than 10 per cent of the issued sharecapital) should be entitled to a non-refundable tax credit in respect of the dividend equal to one ninth ofthe dividend received. As at the date of this Prospectus, the marginal rates of income tax (including thenon-refundable tax credit) on dividend distributions made by the Company are: basic rate income taxpayers: 10 per cent, higher rate income tax payers: 25 per cent, and additional rate income tax payers: 36.1per cent.

UK Offshore Funds Rules

Following receipt of a non-statutory clearance from HMRC, the Directors consider that the Companyshould not constitute an ‘‘offshore fund’’ for the purposes of Part 8 of the Taxation (International andOther Provisions) Act 2010. This is because there can be no expectation that an investor will be able torealise his investment at or close to NAV, other than on an eventual winding up of the Company. Inaddition, all income received by the Company, after deduction for reasonable expenses, will be requiredto be paid to the Shareholders. "Income" is not defined for these purposes. It is generally held to be cashincome. The Company should, therefore, pay out everything it receives from the Master Fund. TheMaster Fund is a non-reporting fund under the UK’s offshore fund rules, and as such, everything that theMaster Fund (or more precisely the Cayman Company, as the Master Fund is "transparent" for UK taxpurposes) pays out (which would include interest on underlying investments, profits realised on sales ofassets, PIK interest, fees, and offshore income gains, but not returns of share capital) should be incomefor these purposes.

It follows that whatever income is received from the Master Fund by the Company should, to the extentpermissible under Guernsey corporate laws (and after deduction of reasonable expenses), be distributedto investors in the Company. Dividend distributions to Shareholders would be subject to income tax inaccordance with the Shareholder’s circumstances and at the rates set out above. The Company willundertake an exercise to determine whether what it has received is capital or income by reference to whatthe Cayman Company has received on the underlying Investments, such that income will be distributed asincome and returns of capital invested will, insofar as possible, be returned through a return of sharecapital (which should not be subject to tax).

On this basis, Shareholders should be subject to capital gains tax in accordance with their personalcircumstances on the disposal of the Ordinary Shares. Capital gains tax is payable at 18 per cent for basic

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rate taxpayers and 28 per cent for higher rate taxpayers. UK tax resident individual Shareholders mayalso benefit from an annual exempt amount of £10,100 for the tax year 2010/11.

Transfer of Assets Abroad

Individual Shareholders should be aware of the provisions of Chapter II, Part XVIII of the Income TaxesAct 2007, which may in certain circumstances render them liable to UK income tax in respect ofundistributed income of the Company.

Close Company Provisions

Individual Shareholders should be aware that, if they hold or are treated as holding more than 10 per centof the Ordinary Shares in the Company and the Company would be treated as a ‘‘close’’ company if itwere resident in the UK, gains which are capital gains for the purposes of UK tax accruing to theCompany may be attributed to them if such gains are not distributed, pursuant to Section 13 Taxation ofChargeable Gains Act 1992.

Transactions in Securities

The attention of Shareholders is drawn to anti-avoidance legislation in Chapter 1, Part 13 of the IncomeTax Act 2007 that could apply if Shareholders are seeking to obtain tax advantages in prescribedconditions.

UK taxation of UK companies

Shareholders who are companies resident in the UK for UK taxation purposes may be able to rely onlegislation in Chapter 3 Part 9 of the Corporation Tax Act 2009 which exempts certain dividends from thecharge to UK corporation tax where certain conditions are met.

Controlled foreign companies (CFCs)

UK resident companies should note that where they (or they together with connected persons) have aninterest in the Company such that 25 per cent or more of the Company’s profits may be apportioned tothem, the provisions of Chapter IV Part XVII of the Income and Corporation Taxes Act 1988 in respectof controlled foreign companies could apply such that they may be liable to UK corporation tax in respectof their share of the Company’s undistributed profits. These provisions will only apply if the Company iscontrolled by UK residents. Investors should note that the controlled foreign companies regime is thesubject of ongoing consultation by the UK government and it is anticipated that legislation to introducefurther changes to the regime will be introduced by the Finance Bill 2012.

Stamp Duty and Stamp Duty Reserve Tax (‘‘SDRT’’)

No UK stamp duty or SDRT will be payable on the issue of the Ordinary Shares. UK stamp duty (at therate of 0.5 per cent of the amount of the value of the consideration for the transfer rounded up wherenecessary to the nearest £5) is payable on any instrument of transfer of Ordinary Shares executed within,or in certain cases brought into, the UK. Provided that all instruments effecting any transfer and allmatters or things done in relation to the transfer are not executed or performed in the UK, there will beno UK stamp duty payable on the transfer. Provided that the Ordinary Shares are not registered in anyregister of the Company kept in the UK and no Ordinary Shares are paired with any shares issued by acompany incorporated in the United Kingdom, any agreement to transfer Ordinary Shares should not besubject to UK stamp duty or SDRT.

If you are in any doubt as to your tax position you should consult your professional adviser.

ISAs/SIPPs

Investors who wish to hold investments as part of an ISA or SIPP should take their own tax advice inrelation to the eligibility of the Ordinary Shares for ISAs and SIPPs.

Ordinary Shares acquired through the offer for subscription should be eligible for inclusion in a stocksand shares ISA subject to applicable subscription limits. The annual ISA investment allowance is £10,200for the tax year 2010/11.

Ordinary Shares should be eligible for inclusion in a SIPP, subject to the discretion of the trustee orrequirements of the SIPP provider.

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PART 9

ADDITIONAL INFORMATION ON THE COMPANY

1. INCORPORATION AND STATUS OF THE COMPANY

1.1 The Company was incorporated in Guernsey on 7 January 2011 under the provisions of theGuernsey Companies Law with registered number 52878 and has been declared by the GFSC to bea registered close-ended investment scheme pursuant to the Protection of Investors (Bailiwick ofGuernsey) Law, 1987, as amended, and the Registered Collective Investment Scheme Rules 2008issued by the GFSC.

1.2 The Company’s legal and commercial name is Duet Real Estate Finance Limited.

1.3 The registered and head office of the Company, the business address of the Directors and theaddress at which its register of members is kept is Regency Court, Glategny Esplanade, St PeterPort, Guernsey GY1 1WW. The Company is domiciled in Guernsey. The telephone number of theCompany’s registered office is +44 (0) 1481 723450.

1.4 The Directors confirm that the Company has not commenced operations and that no financialstatements of the Company have been drawn up since the Company’s incorporation on 7 January2011. The Company’s accounting period will end on 31 December of each year, with the first suchfinancial period commencing on incorporation of the Company and ending on 31 December 2011.

1.5 Save for its entry into the material contracts summarised in paragraph 8 of this Part 9 and certainnon-material contracts, the Company has not yet commenced operations or incurred borrowingssince its incorporation.

1.6 PricewaterhouseCoopers CI LLP has been the only auditor of the Company since its incorporation.PricewaterhouseCoopers CI LLP is a member of the Institute of Chartered Accountants in Englandand Wales. The annual report and financial statements of the Company will be prepared accordingto IFRS and in accordance with the requirements of the Guernsey Companies Law.

1.7 The Company, as a registered collective investment scheme under the Registered CollectiveInvestment Scheme Rules 2008, is regulated by the GFSC. The Company is not regulated by theFSA or any other equivalent regulatory authority.

2. SHARE CAPITAL OF THE COMPANY

2.1 As at the date of incorporation of the Company (and as at the date of this document) the sharecapital of the Company was (and is) comprised of an unlimited number of Ordinary Shares and theissued share capital of the Company was (and is) one Ordinary Share, held by Hirzel Limited. IfAdmission had taken place on the date of incorporation (and assuming that 100 million OrdinaryShares had been issued pursuant to the Placing and Offer for Subscription), the Placing and Offerfor Subscription would have increased the net assets of the Company by £98 million and would havebeen earnings neutral.

2.2 The issued share capital of the Company immediately following Admission will constitute the oneOrdinary Share referred to in paragraph 2.1 above together with the Ordinary Shares, which will notexceed 200 million Ordinary Shares, issued pursuant to the Issue.

2.3 By resolutions passed on 18 February 2011, it was resolved:

2.3.1 to adopt the articles of the incoporation that are summarised in paragraph 3 below as the newarticles of incorporation of the Company;

2.3.2 that the Directors be empowered to allot or make offers or agreements to allot equitysecurities (as defined in the Articles) for cash as if the pre-emption rights contained in theArticles in respect of such equity securities did not apply to any such allotment, provided thatthis power shall be limited to:

(a) the allotment of up to 200 million Ordinary Shares pursuant to the Placing and the Offerfor Subscription;

(b) the allotment of equity securities in connection with an offer of such securities by way ofa rights issue (as defined in the Articles); and

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(c) otherwise than pursuant to the authorities described in sub-paragraphs 2.3.2 (a) and (b)above, the allotment of up to such number of Ordinary Shares as is equal to 9.99 per centof the number of Ordinary Shares in issue immediately following Admission,

and such authority will, unless previously revoked or varied, expire at the conclusion of thefirst annual general meeting of the Company, save that the Company may, before such expiry,make an offer or agreement which would or might require Ordinary Shares to be allotted aftersuch expiry and the Directors may allot equity securities in pursuance of any such offer oragreement as if this power had not expired; and

2.3.3 that the Company be generally and unconditionally authorised to make market purchases of amaximum number of Ordinary Shares equal to 14.99 per cent of the number of OrdinaryShares in issue immediately following Admission, such authority to expire, unless previouslyrevoked or varied, at the conclusion of the first annual general meeting of the Company(except in relation to the purchase of Ordinary Shares the contract for which was concludedbefore the expiry of said authority or which will or may be executed wholly or partly after suchexpiry). The maximum price payable, exclusive of any expenses, for each Ordinary Share shallbe an amount equal to the higher of (i) 105 per cent of the average of the middle marketquotations for an Ordinary Share (as derived from the London Stock Exchange Daily OfficialList) for the five trading days immediately preceding the day on which the Ordinary Share iscontracted to be purchased and (ii) the amount stipulated by Article 5(1) of the Buy-back andStabilisation Regulation 2003. The minimum price payable shall be 1 pence per OrdinaryShare.

2.4 As at 17 February 2011 (being the latest practicable date prior to the date of this document) theCompany does not hold any Ordinary Shares in treasury and no Ordinary Shares are held by or onbehalf of the Company itself or by subsidiaries of the Company.

2.5 Save for the issue of Ordinary Shares pursuant to the Issue, the Company has no present intentionto issue any of the unissued Ordinary Shares in the share capital of the Company.

2.6 The Company does not have in issue any securities not representing share capital.

2.7 No Ordinary Shares are currently in issue with a fixed date on which entitlement to a dividend arisesor with a time limit after which entitlement to a dividend lapses and there are no arrangements inforce whereby future dividends are waived or agreed to be waived.

2.8 Save as disclosed in this paragraph 2, there has been no issue of share or loan capital of theCompany since the Company’s incorporation and (other than pursuant to the Issue) no such issuesare proposed.

2.9 Save pursuant to the Placing Agreement (which is summarised in paragraph 6 of this Part 9 of thisdocument), no commissions, discounts, brokerages or other special terms have been granted by theCompany in connection with the issue or sale of any share or loan capital of the Company since theCompany’s incorporation.

2.10 No share or loan capital of the Company is under option or has been agreed, conditionally orunconditionally, to be put under option, nor will any such share or loan capital be under option oragreed, conditionally or unconditionally, to be put under option at Admission.

2.11 Other than pursuant to the Issue, none of the Ordinary Shares have been sold or are available inwhole or in part to the public in conjunction with the application for the Ordinary Shares to beadmitted to the premium listing segment of the Official List.

2.12 The Ordinary Shares will be in registered form. No temporary documents of title will be issued andprior to the issue of definitive certificates transfers will be certified against the register. It is expectedthat definitive share certificates for the Ordinary Shares not to be held through CREST will beposted to allottees by the week commencing 21 March 2011. Ordinary Shares to be held throughCREST will be credited to CREST accounts on Admission.

2.13 No convertible securities, exchangeable securities or securities with warrants have been issued bythe Company.

2.14 No person has voting rights that differ from those of other Shareholders.

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3. ARTICLES OF INCORPORATION

The Articles of Incorporation contain, inter alia, the following material provisions:

3.1 Objects

The Memorandum and Articles do not limit the objects of the Company.

3.2 Voting rights

Subject to the rights or restrictions referred to in paragraph 3.3 below, and subject to any specialrights or restrictions as to voting for the time being attached to any shares, on a show of hands (a)every member who (being an individual) is present in person or (being a corporation) is present by aduly authorised representative shall have one vote; and (b) every proxy appointed by a membershall have one vote save that every proxy appointed by one or more members to vote for theresolution and by one or more other members to vote against the resolution, has one vote for andone vote against.

3.3 Restrictions on voting

Unless the Board otherwise decides, a member of the Company shall not be entitled to vote, eitherin person or by proxy, at any general meeting of the Company or at any seperate general meeting ofthe holders of any class of shares in the Company in respect of any share held by him unless all callsand other amounts presently payable by him in respect of that share have been paid.

A member of the Company shall not, if the Directors determine, be entitled to be present or to voteat general meetings of the Company or to exercise any other rights of membership if he, or anotherperson appearing to be interested in the relevant shares, has failed to comply with a notice requiringdisclosure of interests in shares given under Article 36 of the Articles within 14 days.

3.4 Dividends

The Company may, by ordinary resolution, declare a dividend to be paid to the members, accordingto their respective rights and interests therein, but no dividend shall exceed the amountrecommended by the Board. The Board may pay such interim dividends as appear to the Boardto be justified by the financial position of the Company. No dividend or other monies payable by theCompany on or in respect of any Ordinary Share shall bear interest as against the Company unlessotherwise provided by the rights attaching to the Ordinary Share.

The Ordinary Shares carry the right to receive all income from the Company’s Investments after (ifthe Directors so determine) deducting reasonable expenses so that the requirements of section357(7) of the Taxation (International and other Provisions) Act 2010 are met.

The Directors may, if authorised by an ordinary resolution of the Company, offer the holders of anyparticular class of shares in the Company the right to elect to receive further shares (whether or notof that class), credited as fully paid, instead of cash in respect of all or part of any dividend specifiedby the ordinary resolution.

The Board may fix a date as the record date by reference to which a dividend will be declared orpaid or a distribution, allotment or issue made, and that date may be before, on or after the date onwhich the dividend, distribution, allotment or issue is declared.

A dividend unclaimed for a period of 12 years after having been declared or became due forpayment shall be forfeited and cease to remain owing by the Company.

3.5 Return of capital

If the Company is in liquidation, the liquidator may, with the sanction of a special resolution of theCompany and any other sanction required by law, divide among the members in specie the whole orany part of the assets of the Company and may, for that purpose, value any assets and determinehow the division shall be carried out as between the members or different classes of members. Theliquidator may, with the same sanction, vest the whole or any part of the assets in trustees on trustsfor the benefit of the members as the liquidator, with the same sanction, thinks fit but no membershall be compelled to accept any assets on which there is any liability.

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3.6 B Shares

The Company may from time to time issue redeemable shares of no par value (‘‘B Shares’’). BShares may be issued only to existing holders of Ordinary Shares pro rata to their holdings ofOrdinary Shares at the time of such issue. The Board may issue fractional B Shares. The B Sharesshall be non-transferable and shall be redeemable at the option of the Board on such terms as theBoard shall determine.

On a redemption of a B Share, the Board shall have the power to divide in specie the whole or anypart of the assets of the relevant value (which shall be conclusively determined by the Board in goodfaith) of the Company and appropriate such assets in satisfaction of the redemption price and anyother sums payable on redemption as provided in the Articles and provided any such appropriationdoes not materially prejudice the interests of the remaining members.

B Shares shall not carry any right to any dividends, any other income distributions, or any capitaldistributions of the Company other than as expressly permitted under the Articles. The B Sharesshall not entitle any holder thereof to any surplus assets of the Company remaining after payment ofall the creditors of the Company apart from a distribution in respect of any capital paid up on theB Shares which shall rank behind any amounts due in respect of other classes of shares and suchdistribution shall be distributed pro rata.

B Shares shall not carry any right to receive notice of, or attend or vote at, any general meeting ofthe Company or any right to vote on written resolutions of the Company.

3.7 Variation of rights

Any rights attaching to a class of shares in the Company may be varied in such manner (if any) asmay be provided by those rights or with the written consent of the holders of three-quarters innumber of the issued shares of that class (excluding any shares of that class held as treasury shares)or with the sanction of a special resolution passed at a separate general meeting of the holders of therelevant class. The quorum for the separate general meeting shall be two persons holding, orrepresenting by proxy, not less than one-third in number of the issued shares of the relevant class(excluding any shares of that class held as treasury shares).

3.8 Transfer of shares

Subject to the restrictions set out in this paragraph, any member may transfer all or any of his sharesin the Company in any manner which is permitted by the Statutes (as defined in the Articles) or inany other manner which is from time to time approved by the Board.

The instrument of transfer of a share in the Company shall be signed by or on behalf of thetransferor and, unless the share is fully paid up, by or on behalf of the transferee. The transferor isdeemed to remain the holder of the shares concerned until the name of the transferee is entered inthe register of members in respect of those shares. All transfers of uncertificated shares shall bemade by means of the relevant system or in any other manner which is permitted by the Statutes orthe CREST Regulations (each as defined in the Articles) and is from time to time approved by theBoard.

The Directors may at their discretion and without giving a reason, refuse to register any transfer ofany share which is not fully paid on which the Company has a lien provided, in the case of a sharethat has been admitted to the Official List, this does not prevent dealings in the share from takingplace on an open and proper basis. The Directors may also decline to register any transfer of sharesin certificated form if: (a) it is in respect of more than one class of share; (b) it is in favour of morethan four joint transferees; and (c) having been delivered for registration to the Office (as defined inthe Articles) or such other place (outside the United Kingdom) as the board may decide, it is notaccompanied by the certificate for the share to which it relates and such other evidence as the boardmay reasonably require to prove title of the transferor and the due execution by him of the transferor, if the transfer is executed by some other person on his behalf, the authority of that person todo so.

The Directors may, pursuant to the provisions of the Articles relating to disclosure of interests,decline to register a transfer in respect of shares which are the subject of a notice given pursuant tothe Articles and in respect of which the required information has not been received by the Companywithin 14 days after service of the notice.

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The registration of transfers of shares or of transfers of any class of shares may be suspended at suchtimes and for such periods as the Directors may determine, either generally or in respect of aparticular class of share except that, in respect of any shares which are participating shares held inan Uncertificated System (as defined in the Articles), the registration of transfers may not besuspended without the consent of the Approved Operator (as defined in the Articles).

In respect of any allotment of any share the Directors shall have the same right to decline toapprove the registration of any renouncee of any allottee as if the application to allot and therenunciation were a transfer of a share under the Articles. Save as aforesaid, the Articles contain norestrictions as to the free transferability of fully paid shares.

3.9 Pre-emption rights

There are no provisions under Guernsey Companies Law equivalent to section 561 of the UKCompanies Act 2006 which confer pre-emption rights on existing shareholders in connection withthe allotment of equity securities for cash or otherwise, but similar pre-emption rights (with certainexceptions) are contained within the Articles.

The Articles provide that, unless otherwise authorised by an extraordinary resolution, the Companyshall not allot equity securities (as defined in the Articles) on any terms unless (i) the Company hasfirst made an offer to each person who holds equity securities in the Company to allot to him, on thesame or more favourable terms, such proportion of those equity securities that is as nearly aspracticable (fractions being disregarded) equal to the proportion in number held by the relevantperson of the Ordinary Shares; and (ii) the period, which shall not be less than 21 clear days, duringwhich any offer referred to in (i) above may be accepted has expired or the Company has receivednotice of the acceptance or refusal of every offer made. A reference to the allotment of equitysecurities includes the grant of a right to subscribe for, or to convert any securities into, equitysecurities in the Company but does not include the allotment of any equity securities pursuant tosuch a right.

The pre-emption rights set out above shall not apply to:

(a) a particular allotment of equity securities if these are, or are to be, wholly or partly paid up orallotted otherwise than in cash or are allotted in whole or in part otherwise than for cash; or

(b) the allotment of equity securities which would, apart from a renunciation or assignment of theright of their allotment, be held under an employee share scheme;

(c) the allotment of bonus shares in the Company; or

(d) the allotment and issue of B Shares.

3.10 Disclosure of interests in shares

The provisions of Chapter 5 of the Disclosure and Transparency Rules (as amended from time totime) (‘‘DTR 5’’) of the UK Financial Services Authority Handbook apply to the Company on thebasis that the Company is a ‘‘non-UK issuer’’, as such term is defined in DTR 5. As such, a person isrequired to notify the Company of the percentage of voting rights it holds as a shareholder or holdsor is deemed to hold through the direct or indirect holding of financial instruments falling withinDTR 5 if, as a result of an acquisition or disposal of shares (or financial instruments), the percentageof voting rights reaches, exceeds or falls below the relevant percentage thresholds being, in the caseof a non-UK issuer, 5, 10, 15, 20, 25 30, 50 and 75 per cent Pursuant to the Articles, DTR 5 isdeemed to apply to the Company as though the Company were a ‘‘UK issuer’’, as such term isdefined by DTR 5. As such, the relevant percentage thresholds that apply to the Company are 3, 4,5, 6, 7, 8, 9, 10 per cent and each 1 per cent threshold thereafter up to 100 per cent notwithstandingthat in the absence of the Articles such thresholds would not apply to the Company.

There are no provisions under Guernsey Companies Law, that apply to the Company, equivalent tothose contained in Part 22 of the UK Companies Act 2006 (Disclosure of Interests in Shares).Accordingly, in order to make provision for the disclosure of interests, the Articles containprovisions which require members, in certain circumstances, to disclose interests in the shares ofthe Company.

The Company has the right, by service of notice in writing, to require a registered member todisclose to the Company the nature of his interest in shares in the Company held at such time or at

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any time in the previous three years including the identity of any person, other than the member,who has any interest in the shares held by the member, and the nature of such interest.

A member will be required to respond within 14 days of receipt of the notice. The sanctionsapplicable if a member is in default of his obligation to respond to such notice include the memberbeing no longer entitled to exercise voting rights attaching to the shares held by that member,dividends payable on the member’s shares being withheld and transfers of shares being refusedregistration, in each case, until such time as the member complies with the obligation to respond.

3.11 Alteration of capital and purchase of own shares

Alteration of capital

The Company may, by ordinary resolution:

. consolidate and divide all or any of its share capital into shares of larger amounts than itsexisting shares;

. subdivide all or any of its shares into shares of a smaller amount than is fixed by itsmemorandum, provided that the proportion between the amount paid and the amount, if any,unpaid on each reduced share shall be the same as it was in the case of the share from whichthe reduced share is derived;

. cancel shares which, at the date of the passing of the resolution have not been taken up oragreed to be taken up by any person, and diminish the amount of its share capital by theamount of the shares so cancelled;

. convert all or any of its shares which are expressed in a particular currency or former currencyinto shares of a different currency, the conversion being effected at the rate of exchange(calculated to not less than 3 significant figures) current on the date of the resolution or onsuch other day as may be specified therein; and

. where its share capital is expressed in a particular currency or former currency, denominate orredenominate it, whether by expressing its amount in units or subdivisions of that currency orformer currency, or otherwise.

Purchase of own shares

Subject to the provisions of the Statutes (as defined in the Articles), the Company may purchase allor any of its shares of any class, including any redeemable shares and may hold such shares astreasury shares or cancel them. Pursuant to the Guernsey Companies Law, the Company may holdup to 10 per cent of its issued share capital in treasury when Ordinary Shares have been purchasedby the Company.

3.12 General meetings

Annual general meetings

The requirement for the Company to hold an annual general meeting may be waived if themembers pass a waiver resolution to this effect and if such waiver resolution remains valid inaccordance with the Guernsey Companies Law. A waiver resolution is a resolution passed by amajority of not less than 90 per cent of members. Otherwise, the Company shall in each calendaryear hold a general meeting as its annual general meeting at such time and place outside the UK asmay be determined by the Directors provided that, so long as the Company shall hold its first annualgeneral meeting within a period of 18 months beginning on the date of its incorporation, theCompany need not hold an annual general meeting in the year of its incorporation or in thefollowing year. Not more than 15 months may elapse between one annual general meeting and thenext.

Convening of general meetings

All meetings, other than annual general meetings, shall be called general meetings. The Board mayconvene a general meeting whenever it thinks fit. All general meetings shall take place outside theUK. A general meeting shall also be convened by the Board on the requisition of members pursuantto the provisions of Guernsey Companies Law or, in default, may be convened by suchrequisitionsists, as provided by the Statutes (as defined in the Articles). The Board shall complywith the provisions of the Statutes (as defined in the Articles) regarding the giving and the

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circulation, on the requisition of members, of notices of resolutions and of statements with respectto matters relating to any resolution to be proposed or business to be dealt with at any generalmeeting of the Company.

Notice of general meetings

A general meeting shall be called by not less than fourteen clear days’ notice. A general meetingmay be called by shorter notice than otherwise required if all the members entitled to attend andvote so agree.

Notice of general meetings shall specify the place outside the UK, the time and date of the meeting,the general nature of any business to be dealt with at the meeting and information in respect ofresolutions which are to be proposed as special resolutions and waiver resolutions, and in the case ofan annual general meeting, shall specify the meeting as such.

Subject to the provisions of the Articles, and to any restrictions imposed on any shares, notice ofevery general meeting shall be given to all members, to the auditors (if any) and to every Directorand every alternate Director registered as such.

In every notice calling a meeting of the Company there shall appear a statement informing amember of his rights to appoint one or more proxies to attend and vote at that meeting instead ofhim.

Quorum

No business shall be transacted at any general meeting, except the adjournment of the meeting,unless a quorum of members is present at the time when the meeting proceeds to business.

A quorum of members shall consist of not less than two members present but so that not less thantwo individuals will constitute the quorum, provided that, if at any time all of the issued shares inthe Company are held by one member such quorum shall consist of that member present.

If within 15 minutes from the time appointed for the holding of a general meeting a quorum is notpresent, the meeting, if convened on the requisition of members, shall be dissolved. In any othercase, it shall stand adjourned to a day 10 clear days after the original meeting (or, if that day is not abusiness day, to the next business day) and the same time and place, as the original meeting, or tosuch later business day, and at such other time and place outside the UK, as the Board may decideand in the latter case not less than seven clear days’ notice of the adjourned meeting shall be givenin any manner in which notice of a meeting may lawfully be given for the time being. If at anadjourned meeting a quorum is not present within 15 minutes from the time fixed for holding themeeting, the meeting shall be dissolved.

Chairman

At each general meeting, the chairman of the Board or, if he is absent or unwilling, the deputychairman (if any) of the Board or (if more than one deputy chairman is present and willing) thedeputy chairman who has been longest in such office or, if no deputy chairman is present andwilling, then one of the other Directors who is appointed for the purpose by the Board or (failingappointment by the Board), by the members present, shall preside as chairman of the meeting, but ifno Director is present within 15 minutes after the time fixed for holding the meeting or, if none ofthe Directors present is willing to preside, the members present and entitled to vote shall chooseone of their number to preside as chairman of the meeting.

Directors entitled to attend and speak

Whether or not he is a member, a Director shall be entitled to attend and speak at any generalmeeting of the Company and at any separate general meeting of the holders of any class of shares ofthe Company.

Adjournment

With the consent of any meeting at which a quorum is present, the chairman of the meeting may(and if so directed by the meeting shall) adjourn the meeting from time to time or sine die and fromplace to place outside the UK.

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In addition, the chairman of the meeting may at any time, without the consent of the meeting,adjourn the meeting (whether or not it has commenced or a quorum is present) to another time and/or place outside the UK if, in his opinion, it would facilitate the conduct of the business of themeeting to do so, notwithstanding that by reason of such adjournment some members may beunable to be present at the adjourned meeting.

Method of voting and demand for poll

At a general meeting a resolution put to the vote of the meeting shall be decided on a show ofhands, unless (before or immediately after the declaration of the result of the show of hands or onthe withdrawal of any other demand for a poll) a poll is demanded by:

(a) the chairman of the meeting;

(b) not less than five members having the right to vote on the resolution;

(c) a member or members representing in aggregate not less than 10 per cent of the total votingrights of all the members having the right to vote on the resolution (excluding any voting rightsattached to any shares in the Company held as treasury shares),

and a demand for a poll by a person as proxy for a member shall be as valid as if the demand weremade by the member himself.

Taking a poll

If a poll is demanded (and the demand is not withdrawn), it shall be taken at such time (either at themeeting at which the poll is demanded or within 30 days after the meeting), at such place outside theUK and in such manner as the chairman of the meeting shall direct and he may appoint scrutineers(who need not be members).

Proxies

A proxy need not be a member of the Company and a member may appoint more than one proxy inrelation to a meeting to attend and to speak and to vote on the same occasion provided that eachproxy is appointed to exercise the rights attached to a different share or shares held by a member.

3.13 Directors

Number and residence

Unless otherwise determined by ordinary resolution of the Company, the number of Directors(other than alternate directors) shall be not less than two but there shall be no maximum number ofDirectors. A majority of the directors (including alternate directors) must be resident for taxpurposes outside the UK.

Remuneration

The Directors (other than any Director who for the time being holds an executive office ofemployment with the Company or a subsidiary of the Company) shall be paid out of the funds of theCompany by way of remuneration for their services as Directors. The aggregate of such fees shallnot exceed £125,000 per annum (or such larger sum as the Company may, by ordinary resolution,determine) as the Directors may decide to be divided among them in such proportion and manneras they may agree or, failing agreement, equally. Any fee payable to the Directors under theArticles shall be distinct from any remuneration or other amounts payable to a Director under otherprovisions of the Articles and shall accrue from day to day.

The Directors may be paid all reasonable travelling, hotel and other expenses properly incurred inconnection with the exercise of their powers and discharge of their duties as Directors includingexpenses incurred in travelling to and from and attending meetings of the Board, committeemeetings, general meetings and separate meetings of the holders of any class of securities of theCompany.

Retirement of Directors

At each annual general meeting, any Director who has been appointed by the Board since theprevious annual meeting and any Director selected to retire by rotation pursuant to the Articlesshall retire from office.

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Retirement of Directors by rotation

At each annual general meeting of the Company, one-third of the Directors (excluding any Directorwho has been appointed by the Directors since the previous annual general meeting) or, if theirnumber is not an integral multiple of three, the number nearest to one-third, but not exceedingone-third, shall retire from office. In addition, each Director shall retire from office at the thirdannual general meeting after he was appointed or reappointed, if he would not otherwise fall withinthe Directors to retire by rotation.

The Directors to retire shall be those Directors who, at the date of the notice of the meeting, havebeen longest in office since their last appointment or re-appointment but, as between persons whobecame or were last re-appointed Directors on the same day, those to retire shall (unless theyotherwise agree among themselves) be determined by lot.

The Directors to retire on each occasion shall be determined (both as to number or identity) by thecomposition of the Board on the day which is 14 days prior to the date of the notice convening theannual general meeting and no Directors shall be required to retire or be relieved from retiring byreason of any change in the number or identity of the Directors after that time but the before theclose of the meeting.

A retiring Director shall be eligible for re-appointment and (unless he is removed from office or hisoffice is vacated in accordance with the Articles) shall retain office until the close of the meeting atwhich he retires or (if earlier) when a resolution is passed at that meeting not to fill the vacancy or toappoint another person in his place or the resolution to re-appoint him is put to the meetingand lost.

If at any meeting at which the appointment of a Director ought to take place the office vacated bya retiring Director is not filled, the retiring Director, if willing to act, shall be deemed to bere-appointed, unless at the meeting a resolution is passed not to fill the vacancy or to appointanother person in his place or unless the resolution to re-appoint him is put to the meeting and lost.

Executive Directors

The Board may appoint one or more Directors to hold any executive office or employment underthe Company for such period (subject to the Statutes (as defined in the Articles)) and on such termsas the Board may determine.

A Director appointed to any executive office or employment shall automatically cease to hold thatoffice if he ceases to be a Director.

Directors’ interests

A Director shall not be entitled to vote on a resolution (or attend or count in the quorum at thoseparts of a meeting regarding such resolution) relating to a transaction or arrangement with theCompany in which he is interested, save where the other Directors resolve that the Directorconcerned should be entitled to do so where they are satisfied that the Director’s interest cannotreasonably be regarded as likely to give rise to a conflict of interest or save in any of the followingcircumstances:

(a) the giving of any guarantee, security or indemnity in respect of (i) money lent or obligationsincurred by such Director or by any other person at the request of or for the benefit of theCompany (or any of its subsidiary undertakings) or in respect of (ii) a debt or obligation of theCompany (or any of its subsidiary undertakings) for which such Director has assumedresponsibility, in whole or in part, under a guarantee or an indemnity or by the giving ofsecurity;

(b) any contract concerning an offer of shares, debentures or other securities of or by theCompany (or any of its subsidiary undertakings) for subscription or purchase in which offersuch Director is or may be entitled to participate as a holder of securities or such Director is oris to be interested as a participant in the underwriting or sub-underwriting thereof;

(c) any contract in which such Director is interested by virtue of his interest in shares, debenturesor other securities of the Company or otherwise in or through the Company;

(d) any contract concerning any other company in which such Director is interested, directly orindirectly, in 1 per cent or more either of its equity share capital or of its voting rights;

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(e) any contract relating to an arrangement for the benefit of the employees of the Company (orany of its subsidiary undertakings) which does not award such Director any privilege or benefitnot generally awarded to the employees to whom the arrangement relates;

(f) any contract concerning the adoption, modification or operation of a pension fund orretirement, death or disability benefits scheme which relates to both Directors and employeesof the Company and/or any of its subsidiary undertakings;

(g) any contract concerning the adoption, modification or operation of an employees’ sharescheme; and

(h) any proposal concerning the purchase or maintenance of insurance for the benefit of personsincluding Directors.

Subject to the Statutes and to the nature and monetary value or, if such value is not quantifiable, theextent of the interest of a Director being duly declared, a contract entered into by or on behalf ofthe Company in which any Director is any way interested shall not be avoided nor shall anyDirector be liable to account to the Company for any benefit realised as a result of the contract.

A Director shall not vote, or be counted in the quorum at a meeting, in respect of any resolution ofconcerning his own appointment (including fixing or varying its terms), or the termination of hisown appointment as the holder of any office or place of profit with the Company or any othercompany in which the Company is interested.

Where proposals are under consideration concerning the appointment (including fixing or varyingits terms) or the termination of the appointment of two or more Directors to offices or places ofprofit with the Company or any other company in which the Company is interested, a separateresolution may be put in relation to each Director and in that case, each Director concerned (if nototherwise debarred from voting) is entitled to vote.

Authorisation of conflicts of interest

Where a situation occurs or is anticipated to occur which gives rise or may give rise to a conflict ofinterest (excluding a conflict of interest arising in relation to a transaction or arrangement with theCompany) on the part of any Director (‘‘Conflicted Director’’) (other than a situation which cannotreasonably be regarded as likely to give rise to a conflict of interest), the matter shall be referred tothe Directors other than the Conflicted Director (the ‘‘Non-Conflicted Directors’’).

The Non-Conflicted Directors shall meet to consider the matter as soon as possible after the matteris referred to them and they have received all relevant particulars relating to the situation. Thequorum for a meeting of the Non-Conflicted Directors shall be the same as for a meeting ofthe Board.

Subject to compliance with any rules of the Guernsey Financial Services Commission to which theCompany is subject, the Non-Conflicted Directors have authority to authorise any matter whichgives rise to the conflict of interest concerned on such terms as they think fit.

Powers of the Board

The business of the Company shall be managed by the Board which may exercise all the powers ofthe Company, subject to the provisions of the Statutes, the Memorandum and the Articles. Nospecial resolution or alteration of the Memorandum or of the Articles shall invalidate any prior actof the Board which would have been valid if the resolution had not been passed or alteration hadnot been made.

Borrowing powers

Subject to the provisions of the Statutes, the Board may exercise all the powers of the Company toborrow money and to mortgage or charge all or any part of its undertaking, property, assets (bothpresent and future) and uncalled capital and to issue debentures and other securities, whetheroutright or as collateral security for any debt, liability or obligation of the Company or of any thirdparty.

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Indemnity of officers

Insofar as the Statutes (as defined in the Articles) allow, each current or former officer of theCompany shall be indemnified out of the assets of the Company against any loss or liability incurredby him by reason of being or having been such an officer.

The Board may, without sanction of the Company in general meeting, authorise the purchase ormaintenance by the Company for any officer or former officer of the Company of any suchinsurance as is permitted by the Statutes (as defined in the Articles) in respect of any liability whichwould otherwise attach to such officer or former officer.

Board meetings

The Board may meet for the despatch of business, adjourn and otherwise regulate its meetings as itthinks fit provided that no meetings of Directors shall be held in the UK. Any decision reached orresolution passed by the Directors at any meeting which is held in the UK shall be invalid and ofno effect.

Quorum

The quorum necessary for the transaction of the business of the Board may be fixed by the Boardand, unless so fixed at any other number, shall be two. Subject to the provisions of the Articles, anyDirector who ceases to be a Director at a Board meeting may continue to be present and to act as aDirector and be counted in the quorum until the termination of the Board meeting if no otherDirector objects and if otherwise a quorum of Directors would not be present.

There shall be no quorum unless a majority of directors in attendance at a Board meeting (includingany alternate director and including any director who is attending the meeting by telephone orvideo conference) are outside the UK at the time of the meeting. No Director attending the meetingfrom the UK by telephone or other means shall count towards the quorum.

Voting

Questions arising at any meeting shall be determined by a majority of votes. In the case of anequality of votes, neither the chairman of the meeting nor any other person shall have a second orcasting vote.

3.14 CREST

CREST is a paperless settlement procedure enabling securities to be evidenced otherwise than by acertificate and transferred otherwise than by a written instrument. The Company has applied for theOrdinary Shares to be admitted to CREST and it is expected that the Ordinary Shares will be soadmitted, and accordingly enabled for settlement in CREST, as soon as practicable after Admissionhas occurred.

4. DIRECTORS’ INTERESTS

4.1 It is not expected that any of the Directors will have any interest in any Ordinary Sharesimmediately following Admission.

4.2 No Director has any interest in any transactions which are or were unusual in their nature orconditions or which are or were significant to the business of the Company and which were effectedby the Company in the current or immediately preceding financial year or which were effectedduring an earlier financial year and which remain in any respect outstanding or unperformed.

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4.3 The Directors currently hold, and have during the five years preceding the date of this documentheld, the following directorships, partnerships or have been a member of the senior management:

Name Name of company/partnershipPosition still

held (Y/N)

Quentin Burgess Alternative Property Income Venture S.C.A. YAPIV General Partner S.a.r.l. YAlternative Property Income ELP Subco S.a.r.l. YAPIV S.C.S. YEuropean Logistics YEuropean Logistics Feeder S.C.A. YEuropean Logistics Income Venture S.C.A. YLogistic Investment Holding S.a.r.l. YEOIV Management Company S.A. YEuropean Office Income Venture YEuropean Retail Venture S.A. YEuropean Retail Income Venture SCA YEuropean Retail Investment Holding S.a.r.l. YEuropean Retail Investment Holding II S.a.r.l. YEuropean Retail Venture II S.A. YEuropean Retail Income Venture II S.C.A. YEuropean Retail Income Venture II Feeder S.C.A. YEIP Luxembourg Management Company S.a.r.l. YEIP Participation S1 S.a.r.l. YEIP Participation S2 S.a.r.l. YDV III General Partner S.A. YDevelopment Venture III SCA YCommercial Real Estate Loans S.C.A. YEuropean Hotel SA YEuropean Hotel Venture SA YAlternative Property Income Venture (General Partner)Ltd

Y

MML Dublin Mortgage Loans YAlternative Property Income Venture (Scotland) Ltd YChelwood Vachery Residents Management Limited YArgent Development Consortium Limited NIPD General Partner Limited NIPD Properties Limited NIndustrial Development Holdings Limited N

John Falla LCF Edmond de Rothschild (C.I.) Limited YLCF Edmond de Rothschild Holdings (C.I.) Limited YLCF Edmond de Rothschild Asset Management (C.I.)Limited

Y

Treasury Investments (C.I.) Limited YPriquam Advisory Limited YCTBR Holding Limited YGuernsey Yacht Club (GYC) NGuernsey Yacht Club, LBG N

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Name Name of company/partnershipPosition still

held (Y/N)

David Staples Gottex Fund Management Holdings Limited YApax Europe IV GP Co Limited YApax Europe V GP Co Limited YApax Europe VI GP Co Limited YApax Europe VII GP Co Limited YApax Europe VII Founder GP Co Limited YApax Europe VII Co-Investment GP Co Limited YHirzel IV PTC Limited YMedicX Fund Limited YAberdeen Private Equity Fund Limited YSignet Global Fixed Income Strategies Limited YHenderson Far East Income Limited Y1st Credit (Guernsey) Limited NGlebe Central Cross Limited NPremier Renewable Energy Limited NPre-X Capital Guernsey PCC Limited N

4.4 David Staples was a director of Glebe Central Cross Limited and its two subsidiaries, TCR1Limited and TCR2 Limited. These companies were placed into members’ voluntary liquidation inNovember 2010. Mr Staples was also a director of Premier Renewable Energy Fund Limited. Thiscompany was placed into a members’ voluntary liquidation in December 2010. Mr Staples was alsoa director of Pre-X Capital Guernsey PCC Limited. This company was also placed into a members’voluntary liquidation in December 2010. All of these liquidations were subject to Guernsey law.

4.5 Save as disclosed above, none of the Directors has at any time within the last five years precedingthe date of this document:

. been a member of the administrative, management or supervisory bodies or a partner of anycompany or partnership;

. had any convictions (whether spent or unspent) in relation to offences involving fraud ordishonesty;

. been the subject of any official public incrimination and/or sanctions by statutory or regulatoryauthorities (including designated professional bodies) or been disqualified by a court fromacting as a director of a company or from acting in the management or conduct of the affairs ofany company;

. been a director or senior manager of a company which has been put into receivership,compulsory liquidation, administration, company voluntary arrangement or any compositionor arrangement with its creditors generally or any class of its creditors; or

. been the subject of any bankruptcy or been subject to an individual voluntary arrangement ora bankruptcy restrictions order.

5. DIRECTORS’ REMUNERATION AND LETTERS OF APPOINTMENT

All the Directors are non-executive directors. The aggregate remuneration (including contingent ordeferred compensation and benefits in kind but excluding bonuses) of the Directors in respect of thecurrent financial year (being the period from incorporation of the Company to 31 December 2011) underthe arrangements in force at the date of this document) is expected to be approximately £60,000.

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Each of the Directors has entered into a letter of appointment with the Company. The annual feespayable to each Director pursuant to those letters of appointment are as follows:

NameAnnual Fee

£

Quentin Burgess (Chairman) 30,000John Falla 20,000David Staples 25,000*

*The fees payable to Mr Staples include the sum of £5,000 per year which is payable in consideration of Mr Staples acting as the chairman of theCompany’s audit committee.

In addition to the annual fees referred to above, each of the Directors will receive, conditional uponAdmission, a fee of £5,000 in respect of the services performed by him in connection with the Issue andAdmission. Each of the Directors will also be entitled to receive an additional fee of £5,000 in respect ofhis services in relation to any material transaction undertaken by the Company and will be entitled to areasonable additional fee in relation to any services provided to the Company that are not currentlyenvisaged and any time commitment required in relation to his role in excess of that currently envisaged.

Each of the Directors has been appointed for an initial period ending on the first anniversary ofAdmission. The appointment of each of the Directors may be terminated on not less than three monthsnotice, such notice to expire not before the first anniversary of Admission. The Directors will not beentitled to any benefits upon termination of their appointment under the terms of their agreements withthe Company.

None of the Directors is entitled to any pension, retirement or similar benefits.

6. PLACING ARRANGEMENTS

Under the Placing Agreement, the Placing Agent has agreed (conditional, inter alia, on Admissionbecoming effective not later than 8.00 a.m. on 14 March 2011 (or such other date as the Company and thePlacing Agent agree (not being later than 14 April 2011)) as agent for the Company to use its reasonableendeavours to procure subscribers for Ordinary Shares pursuant to the Placing.

Under the Placing Agreement:

(a) the Company has agreed to pay the Placing Agent an advisory fee equal to 0.35 per cent of the totalOffer Price of all of the Ordinary Shares issued under the Placing and the Offer for Subscription;and

(b) the Company has agreed to pay the Placing Agent a commission equal to a maximum of 1.4 per centof the total Offer Price of all of the Ordinary Shares issued under the Placing and the Offer forSubscription,

together in each case with any applicable VAT.

The Company will pay certain other costs and expenses (including any applicable VAT) of, or incidentalto, the Issue including all fees and expenses payable in connection with Admission, expenses of theCompany Registrar, printing and advertising expenses, postage and all other legal, accounting and otherprofessional fees and expenses.

The Placing Agreement contains warranties given by the Company, the Investment Adviser and (inrespect of certain matters only) the Directors to the Placing Agent as to the accuracy of the informationcontained in this document and other matters relating to the Company and its business, and also containsindemnities given by the Company to the Placing Agent in a form customary for this type of agreement.The Placing Agent is entitled to terminate the Placing Agreement in certain specified circumstances priorto Admission.

7. THE CITY CODE

Mandatory Takeover Bids

The City Code applies to all takeover and merger transactions in relation to the Company and operatesprincipally to ensure that shareholders are treated fairly, are not denied an opportunity to decide on themerits of a takeover and to ensure that shareholders of the same class are afforded equivalent treatment.The City Code provides an orderly framework within which takeovers are conducted and the Panel onTakeovers and Mergers has now been placed on a statutory footing.

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The City Code is based upon a number of general principles which are essentially statements of standardsof commercial behaviour. General Principle One states that all holders of securities of an offereecompany of the same class must be afforded equivalent treatment and if a person acquires control of acompany, the other holders of securities must be protected. This is reinforced by Rule 9 of the City Codewhich requires a person, together with persons acting in concert with him, who acquires shares carryingvoting rights which amount to 30 per cent or more of the voting rights to make a general offer. ‘‘Votingrights’’ for these purposes means all the voting rights attributable to the share capital of a company whichare currently exercisable at a general meeting. A general offer will also be required where a person who,together with persons acting in concert with him, holds not less than 30 per cent but not more than50 per cent of the voting rights, acquires additional shares which increase his percentage of the votingrights. Unless the Panel consents, the offer must be made to all other shareholders, be in cash (or have acash alternative) and cannot be conditional on anything other than the securing of acceptances which willresult in the offeror and persons acting in concert with him holding shares carrying more than 50 per centof the voting rights.

8. MATERIAL CONTRACTS

The following are the only contracts (not being contracts entered into in the ordinary course of business)which have been entered into by the Company since its incorporation or which are expected to be enteredinto prior to Admission and which are, or may be, material to the Company:

8.1 Placing Agreement

The Placing Agreement, as described in paragraph 6 above.

8.2 The Investment Adviser Contribution Agreement

Under the Investment Adviser Contribution Agreement, the Investment Adviser has agreed toreimburse the Company (or pay certain of its expenses) in the event that the deductions from thenet proceeds in relation to Issue expenses, the Subscription Premium and an amount retained by theCompany for working capital purposes are greater than 2 per cent of the gross Issue proceeds, suchthat the Available Net Proceeds will be at least an amount equal to 98 per cent of the gross Issueproceeds.

8.3 Commitment Letter

The Company and the Master Fund have agreed in the Commitment Letter that conditional onAdmission occurring, (i) the Company will commit to invest the Available Net Proceeds in theMaster Fund by entering into a Deed of Adherence, (ii) the Company will pay to the Master Fundthe Subscription Premium in respect of its committed investment in the Master Fund and (iii) theMaster Fund will admit the Company as a Limited Partner.

8.4 Deed of Adherence

Conditional upon Admission occurring, the Company will enter into a Deed of Adherence,pursuant to which it will become bound by the terms of the Limited Partnership Agreement as aLimited Partner. Information in relation to the Limited Partnership Agreement is set out inparagraph 2.1 of Part 10.

8.5 The Company Investment Advisory Agreement

The Investment Adviser has been appointed by the Company with effect from Admission toprovide investment advisory services to the Company pursuant to the terms of the CompanyInvestment Advisory Agreement.

The Investment Adviser will advise the Directors to enable them to make informed decisions forthe Company, advise on funding requirements of the Company (including advice and assistance inany equity/further fund raising process), oversee and arrange borrowings for the Company withinthe gearing limits set out in this document and will provide other investment advisory services asdetailed in the Company Investment Advisory Agreement. The fee payable by the Company to theInvestment Adviser for such services is £25,000 per annum payable by quarterly instalments inadvance on each of 31 March, 30 June, 30 September and 31 December each year.

Included in the fee arrangement described above, the Investment Adviser will also, upon request bythe Company, provide advice to the Company which is similar in scope and/or nature to advice

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already provided or in the course of being provided to the Master Fund pursuant to the MasterFund Investment Advisory Agreement.

Save as provided below in respect of advice given in respect of the assets pertaining to an in speciedistribution received by the Company, if the Investment Adviser is requested by the Company toprovide advice to the Company (subject to the Investment Adviser being competent to provide suchadvice) that falls outside the advisory services specifically listed in the Company InvestmentAdvisory Agreement, or outside of advice being already provided or in the course of being providedto the Master Fund pursuant to the Master Fund Investment Advisory Agreement, then suchadditional advice will be provided as agreed in advance in writing between the Investment Adviserand the Company.

The appointment of the Investment Adviser is not exclusive and the Company may appoint a thirdparty adviser to provide it with investment advisory services at its discretion (including such servicesalready provided by the Investment Adviser pursuant to the Company Investment AdvisoryAgreement).

Termination

The Company Investment Advisory Agreement shall commence on Admission and, save for certaincircumstances, will terminate on the same date as the date on which the Master Fund InvestmentAdvisory Agreement terminates or expires (save in respect of advice to be given relating to in speciedistributions received by the Company from the Master Fund, as described below). The CompanyInvestment Advisory Agreement shall also terminate on the occurrence of certain specified events,including if the Company and/or the Investment Adviser enter into liquidation. Either party mayterminate the Company Investment Advisory Agreement in the event of a material and unremediedbreach by the other party.

Indemnity and extent of liability

The Investment Adviser shall not, in the absence of fraud, gross negligence or wilful default on itspart or on the part of its directors, employees or agents, be liable for any loss, damage, cost, claim orexpenses sustained or suffered by the Company as a result, or in the course of, the discharge of itsduties pursuant to the Company Investment Advisory Agreement. In addition, the Company hasagreed to indemnify the Investment Adviser, its employees, directors and agents from and againstany and all liabilities, losses, damages, penalties, actions, judgments, suits, costs, expenses ordisbursements of any kind or nature whatsoever (other than those resulting from fraud, grossnegligence, or wilful default on the part of the Investment Adviser or its employees) incurred inperforming its obligations or duties pursuant to the Company Investment Advisory Agreement.

Conflicts of Interest

The Directors do not currently envisage a conflict arising between the duties of the InvestmentAdviser to the Company and to the Master Fund respectively. However, in the event that any suchconflict does arise, the Board will, if required, obtain advice from an independent third party adviserin place of the Investment Adviser in relation to the relevant matter. The Investment Adviser willseek to ensure that any such conflict is resolved fairly and in good faith.

Professional Indemnity Insurance

The Investment Adviser will, subject to such insurance being available in the market at commercialrates, maintain professional indemnity insurance to cover each and every professional liabilitywhich may arise under the Company Investment Advisory Agreement, with a limit of indemnity notless than £5,000,000 in respect of each and every claim.

In specie distributions

In the event that the Master Fund pays an in specie distribution to the Company, the Company willhave the right (but not the obligation) to receive investment advice from the Investment Adviser inrespect of the asset to which such in specie distribution relates, including in relation to themanagement and realisation of such asset. The fee to be paid by the Company to the InvestmentAdviser for such advisory services shall be an amount per annum equal to 1.5 per cent of theacquisition cost to the Master Fund of the asset or assets that is/are the subject of the in speciedistribution. An appointment to advise on such in specie distribution shall be terminable by the

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Company on written notice to the Investment Adviser and by the Investment Adviser on 180 days’written notice to the Company. The appointment to provide advice in respect of such an asset willalso terminate if the asset is realised by the Company.

8.6 The Company Administration Agreement

The Administrator has been appointed pursuant to the Company Administration Agreementbetween the Company and the Administrator to provide accounting, company secretarial, andadministration services to the Company.

The Company Administration Agreement provides for the payment by the Company of the feesand charges of the Administrator. The administration fee payable by the Company to theAdministrator is an annual fee of £62,000 payable quarterly in advance together with a fee of£16,500 payable on Admission. The Company is also required to reimburse the Administrator inrespect of all reasonable and properly evidenced out of pocket expenses properly incurred by theAdministrator in the performance of its duties under the Company Administration Agreement.

The Company Administration Agreement contains provisions whereby the Company indemnifiesand holds harmless the Administrator from and against all actions, proceedings, claims, anddemands (including costs and expenses incidental thereto, including legal and professionalexpenses) which may be made against, suffered or incurred by the Administrator in respect ofany direct loss or damage suffered or alleged to have been suffered in connection with theperformance or non-performance by the Administrator of the duties and obligations of theAdministrator under the Company Administration Agreement otherwise than as a result of theAdministrator’s negligence, fraud, wilful default, breach of the Company AdministrationAgreement, breach of the laws of the Island of Guernsey, breach of the Rules (as defined in theCompany Administration Agreement), or breach of the rules of any regulatory body to which theAdministrator, its delegates, employees, or agents are subject.

The Company Administration Agreement is terminable, inter alia, (a) upon not less than ninetydays’ notice in writing or (b) immediately upon the occurrence of certain events including theinsolvency of the Company or the Administrator, the Administrator ceasing to be licensed inGuernsey to act as such, or a party committing a material breach of the Company AdministrationAgreement (where such breach has not been remedied within thirty days of notice being given).

8.7 The Company Share Registration Services Agreement

The Company Registrar has been appointed pursuant to the Company Share Registration ServicesAgreement to provide certain share registration and online services to the Company.

The Company Share Registration Services Agreement provides for the payment by the Company ofthe fees and charges of the Company Registrar.

Fees payable by the Company pursuant to the Company Share Registration Services Agreementinclude (a) a basic registration fee of £2.00 per holder of Ordinary Shares appearing on the registerduring the fee year, with a minimum charge per annum of £10,000; and (b) £0.35 for anyinter-CREST and £5.00 for non-CREST transfers over an initial allowance of 200 transfers.

The Company Share Registration Services Agreement contains provisions whereby the Companyindemnifies the Company Registrar, its affiliates and their directors, officers, employees and agentsfrom and against any and all losses, damages, liabilities, professional fees (including but not limitedto legal fees), court costs and expenses resulting or arising from the Company’s breach of theCompany Share Registration Services Agreement. In addition, any third-party claims, actions,proceedings, investigations or litigation relating to or arising from or in connection with theCompany Share Registration Services Agreement or the services contemplated therein areincluded, except to the extent such losses as set out in this paragraph are determined to haveresulted solely from the negligence, fraud or wilful default of the indemnified party seeking theindemnity.

The Company Share Registration Services Agreement is terminable, inter alia (a) upon threemonths’ written notice in the event of a disagreement over any increase of fees; (b) upon service ofwritten notice if the other party commits a material breach of its obligations under the CompanyShare Registration Services Agreement which that party has failed to remedy within 45 days ofreceipt of a written notice to do so from the first party; or (c) upon service of written notice if a

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resolution is passed or an order made for the winding-up, dissolution or administration of the otherparty.

8.8 The Company Receiving Agent Services Agreement

The Company Receiving Agent has been appointed pursuant to the Company Receiving AgentServices Agreement to provide certain receiving agent services to the Company.

The Company Receiving Agent Services Agreement provides for the payment by the Company ofthe fees and charges of the Company Receiving Agent.

Fees payable by the Company pursuant to the Company Receiving Agent Services Agreementinclude (a) professional advisory fees of £175 per hour, subject to a minimum of £2,000; (b)processing fees per item processed, subject to a minimum aggregate processing fee of £5,000; and (c)various other fees in relation to certain matters including with regard to opening of premises onnon-business days (£5,000 per day).

The Company Receiving Agent Services Agreement contains provisions whereby the Companyindemnifies the Company Receiving Agent, its affiliates and their directors, officers, employees andagents from and against any and all losses, damages, liabilities, professional fees (including but notlimited to legal fees), court costs and expenses resulting or arising from the Company’s breach of theCompany Receiving Agent Services Agreement. In addition, any third-party claims, actions,proceedings, investigations or litigation relating to or arising from or in connection with thisAgreement or the services contemplated therein are included, except to the extent such losses as setout in this paragraph are determined to have resulted solely from the negligence, fraud or wilfuldefault of the indemnified party seeking the indemnity.

The Company shall also indemnify the Company Receiving Agent for any liabilities it may suffer inconnection with any change to the application criteria or to the terms of the Offer for Subscriptionafter this document is published.

The Company Receiving Agent Services Agreement is terminable, inter alia (a) if the other partycommits a material breach of its obligations under the Company Receiving Agent ServicesAgreement which that party has failed to remedy within 14 days of receipt of a written notice to doso from the first party; or (b) if a resolution is passed or an order made for the winding-up,dissolution or administration of the other party.

9. RELATED PARTY TRANSACTIONS

The Company has not entered into any related party transactions since its incorporation.

10. WORKING CAPITAL

The Company is of the opinion that, taking into account the Minimum Net Proceeds, the working capitalof the Company is sufficient for its present requirements, that is for at least the next 12 months from thedate of this document.

11. PROPERTY, PLANT AND EQUIPMENT

The Company has no existing or planned material tangible fixed assets.

12. LITIGATION

There are no governmental, legal or arbitration proceedings (including any such proceedings which arepending or threatened of which the Company is aware), during the 12 month period prior to the date ofpublication of this document, which may have, or have had since the date of its incorporation to the dateof this document, a significant effect on the Company’s financial position or profitability.

13. INVESTMENT RESTRICTIONS

The Company is required to manage and invest its assets in accordance with its investment objective andpolicy which is set out in paragraph 2 of Part 1 of this document. The Company is not subject to any otherinvestment restrictions.

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14. THIRD PARTY INFORMATION

Where third party information has been referenced in this document, the source of that third partyinformation has been disclosed. Where information contained in this document has been sourced from athird party, the Company confirms that such information has been accurately reproduced and, as far asthe Company is aware and able to ascertain from information published by such third parties, no factshave been omitted which would render the reproduced information inaccurate or misleading.

15. CAPITALISATION AND INDEBTEDNESS

As at the date of this document (save for the Company’s contingent indebtedness under the PlacingAgreement, the Company Administration Agreement, the Company Receiving Agent ServicesAgreement and the Company Share Registration Services Agreement as set out in paragraphs 6, 8.6,8.7 and 8.8 of this Part 9 of this document, and professional advisers’ fees and the Directors’ letters ofappointment set out in paragraph 5 of this Part 9), the Company has no guaranteed, secured,unguaranteed or unsecured debt and no indirect or contingent indebtedness.

The following table shows the capitalisation of the Company as at 7 January 2011 (being the date of itsincorporation):

Shareholders’ equity (£) as at 7 January 2011Share capital 1Legal reserve NilOther reserves NilTotal 1

16. GENERAL

16.1 There has been no significant change in the financial or trading position of the Company since thedate of its incorporation.

16.2 The estimated costs and expenses relating to the Issue payable by the Company are estimated toamount to £2.2 million. As a result of the Investment Adviser’s commitment to reimburse or meetsuch costs and expenses as described in this document, the total Available Net Proceeds, assumingthat the Company raises a target gross amount in the sum of £100 million, will be at least £98 million(taking into account the Investment Adviser Contribution).

16.3 In the opinion of the Directors, the minimum amount which must be raised by the allotment ofOrdinary Shares pursuant to the Issue is £25 million, which will be applied as follows:

16.3.1 costs and expenses payable by the Company under the Issue £0.4 million;

16.3.2 an amount equal to £0.1 million in order to provide sufficient funds to meet the Company’songoing expenses and running costs; and

16.3.3 commitment to invest in the Master Fund.

16.4 Oriel Securities Limited is registered in England and Wales under number 04373759 and itsregistered office is at 125 Wood Street, London EC2V 7AN. Oriel Securities Limited is regulatedby the Financial Services Authority and is acting in the capacity of Sponsor and Placing Agent tothe Company.

16.5 Oriel Securities Limited has given, and has not withdrawn, its written consent to the issue of thisdocument with the inclusion of its name and references to it in the form and context in whichthey appear.

16.6 Duet Private Equity Limited has given, and has not withdrawn, its written consent to the issue ofthis document with the inclusion of its name and references to it in the form and context in whichthey appear.

16.7 There are no patents or other intellectual property rights, licences, industrial, commercial orfinancial contracts or new manufacturing processes which are material to the Company’s businessor profitability.

16.8 As described in paragraph 2.1 above, as at 17 February 2011 (being the latest practicable date priorto the date of this document) the issued and fully paid share capital of the Company was oneOrdinary Share. If the Issue proceeds, the Company will issue not less than 25 million new Ordinary

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Shares and not more than 200 million new Ordinary Shares and the holders of the existing OrdinaryShares will be diluted accordingly.

16.9 The Ordinary Shares are not listed on any other market for securities.

16.10 The ISIN for the Ordinary Shares is GG00B628S547.

16.11 As at 17 February 2011 (being the latest practicable date before the publication of this document)there have been no public takeover bids in respect of the Company’s share capital since itsincorporation.

16.12 The Company is not aware of any person or persons who, immediately following Admission,directly or indirectly, jointly or severally, could exercise control over the Company, nor is it awareof any arrangements, the operation of which may at a subsequent date result in a change of controlof the Company.

16.13 The Master Fund has undertaken to the Company (i) that the Master Fund’s investment policies areconsistent with the Company’s investment policy set out in paragraph 2 of Part 4 and paragraph 2and Part 1 of this document, (ii) that the investment policies of the Master Fund provide forspreading investment risk and (iii) that the investment policies of the Master Fund will not beamended in such as way as would not spread investment risk.

17. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the Memorandum and the Articles of Incorporation will be available for inspection duringnormal business hours on any day (except Saturdays, Sundays, bank and public holidays) free of charge tothe public at the offices of the Company and at the offices of Berwin Leighton Paisner LLP, AdelaideHouse, London Bridge, London EC4R 9HA from the date of this document until the first anniversary ofAdmission.

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PART 10

ADDITIONAL INFORMATION ON THE MASTER FUND

1. INCORPORATION AND STATUS OF THE MASTER FUND

1.1 The Master Fund is an exempted limited partnership registered under the Exempted LimitedPartnership Law (2007 Revision) in the Cayman Islands with registered number QH-31003.

1.2 The Master Fund’s legal and commercial name is European Real Estate Debt Fund L.P..

1.3 The registered and head office of the Master Fund is at Harbour Centre, PO Box 1348,North Church Street, Grand Cayman, KY1-1108, Cayman Islands. The Master Fund is domiciled inthe Cayman Islands. The telephone number of the Master Fund’s registered office is+1 345 949 4123.

1.4 PricewaterhouseCoopers Accountants NV has been the only auditor of the Master Fund since itsincorporation. PricewaterhouseCoopers Accountants NV is a member of the Royal NIVRA(Koninklijk Nederlands Instituaat van Registeraccountants). The annual report and financialstatements of the Master Fund will be prepared according to IFRS.

1.5 The Master Fund is not regulated by the FSA or any other equivalent regulatory authority.

2. MATERIAL CONTRACTS

The following are the only contracts (not being contracts entered into in the ordinary course of business)which have been entered into by the Master Fund or which are expected to be entered into prior toAdmission and which are, or may be, material to the Company or the Master Fund:

2.1 Limited Partnership Agreement

The Limited Partnership Agreement governs, among other things, capital contributions into, loansto, investment parameters of, distributions by and conduct of the Master Fund. Set out below is asummary of the principal provisions of the Limited Partnership Agreement.

Issuance of Interests and adjustments

Where a new Limited Partner is admitted to the Master Fund after the Initial Closing Date, andsums have previously been drawn down from existing Limited Partners, such new Limited Partnershall pay on its first drawdown date an amount equal to:

(a) the amount notified to such new Limited Partner by the General Partner as being necessary toequalise (in percentage terms) the net amount drawn down from all Limited Partners (otherthan amounts drawn down from Limited Partners to fund the Advisory Fee) after taking intoaccount any amounts previously distributed to Limited Partners. The amounts payable by thenew Limited Partner pursuant to (a), will be applied by the General Partner as soon aspracticable after receipt from the new Limited Partner, so that all Limited Partners (whetherexisting or new) have the same percentage of their commitment drawn down by the MasterFund;

plus:

(b) a subscription premium (‘‘Subscription Premium’’) equal to the greater of:

(i) an amount equal to A x B, where:

A equals interest at 10 per cent per annum on each amount drawn down prior toadmission of the new Limited Partner from the date of each relevant drawdown to thefirst drawdown date of such new Limited Partner; and

B equals the new Limited Partner’s percentage share of total commitments of all theLimited Partners immediately following admission of such new Limited Partner to theMaster Fund; and

(ii) an amount equal to C x D, where:

C equals the difference between the market value of the Investments at the date ofacquisition of such Investments and the market value of such Investments as calculated

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at the end of the quarter prior to the issue of the first drawdown notice to such newLimited Partner; and

D equals the new Limited Partner’s percentage share of total commitments of allLimited Partners immediately following admission of the new Limited Partner to theMaster Fund.

The Subscription Premium will be distributed to the existing Limited Partners and not retained bythe Master Fund. The amounts referred to in (a) will be treated as a partial repayment of existingloans and will be available for further calls. The amounts in (b) will not be treated as repayment ofexisting loans, will not be available for further calls and will not be treated as a distribution.

Commitments – Capital Contributions and Loan

The commitments comprise of loan and capital in the ratio of 99.999 per cent to 0.001 per cent.

The capital contribution shall not be returned until the termination of the Master Fund.

Each Limited Partner will advance loans to the Master Fund at times requested by the GeneralPartner giving at least 15 Business Days’ prior written notice.

Investment Period

The Master Fund may make commitments to investment opportunities up to the date falling30 months from the Initial Closing Date or such earlier date as the General Partner may determineprovided that at such earlier date at least 90 per cent of total commitments have been invested orcommitted for investment and/or used or reserved for advisory fees and expenses and/or reservedfor Follow-On Investments. The Investment Period may be extended by the General Partner for aperiod of up to six months.

Any commitments not drawn down within the Investment Period will be cancelled except to theextent necessary: (i) to pay ongoing advisory fees and operating expenses of the Master Fund; (ii) tomake investments pursuant to contractual obligations existing at the end of the Investment Period;and (iii) for Follow-On Investments (in addition to any included in (ii)) up to a maximum amount of15 per cent of total commitments.

Prohibited Investments

If an Investment, which if made, would violate either a statute, law, governmental regulation, oradministrative guideline imposed on a Limited Partner and such Limited Partner has notified theGeneral Partner, the General Partner shall use all reasonable endeavours to procure that theMaster Fund disposes of such Investment as soon as reasonably practicable.

Limited Liability

Assuming that a Limited Partner does not participate in the conduct, management or control of theMaster Fund’s business, such Limited Partner’s liability will be limited to the amount of capitalcontribution together with such Limited Partner’s outstanding loan it is obliged to contribute to theMaster Fund.

Management by the General Partner

The exercise by the General Partner of any and all powers and authority granted to it are subject tothe restrictions set forth in the Limited Partnership Agreement.

Advisory Fee

The Investment Adviser receives an annual Advisory Fee of 2 per cent (plus VAT if applicable) perannum of total commitments, payable by the Cayman Company quarterly in advance from theInitial Closing Date to the end of the Investment Period. The Advisory Fee is calculated on thebasis of aggregate commitments as at the Final Closing Date.

After the end of the Investment Period, the Advisory Fee shall be 2 per cent (plus VAT ifapplicable) per annum of the total acquisition cost of all Investments which remain unrealised andwhich have not been written off, calculated by reference to the opening balance of the quarter priorto that in which the Advisory Fee is charged.

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The Advisory Fee is paid to the Investment Adviser quarterly in advance from the Initial ClosingDate until the termination of the Master Fund. If the Cayman Company has insufficient income andgains available to pay the Advisory Fee, a corresponding amount will be advanced by the MasterFund out of the Master Fund’s assets to the Cayman Company to pay the Investment Adviser onaccount of future income and gains. If future income and gains are insufficient, the amountsadvanced to the Cayman Company will be written off upon termination of the Master Fund.

Any Limited Partner that makes a commitment of £25 million or more shall be entitled to a rebateof its Advisory Fee such that it will pay an Advisory Fee of 1.5 per cent per annum. In addition, theInvestment Adviser may, at its sole discretion agree with any Limited Partner other rebatearrangements as it deems appropriate. Such a rebated fee arrangement may be effected by nettingoff the rebated amount against a Limited Partner’s drawdown obligations.

Key Individual and suspension of investment powers

The ‘‘Key Individual’’ is Dale Lattanzio or any other person or persons that the General Partnermay elect during the Investment Period as approved by consent of Limited Partners holding morethan 75 per cent of the value of the Master Fund (‘‘Special Consent’’). The Advisory Committeemay approve the appointment of one or more replacements for the exiting Key Individual.

If, prior to the expiry of the Investment Period, the Key Individual ceases to be employed by theInvestment Adviser and has not been replaced by an approved replacement, the General Partnershall notify the Advisory Committee accordingly. Further, in such circumstances, the investmentpowers of the Master Fund may be suspended for a period of 180 days (a ‘‘Suspension Period’’)(save for Investments to which the Master Fund is contractually committed or which are Follow-OnInvestments) by consent of Limited Partners holding more than 50 per cent of the value of theMaster Fund (‘‘Majority Consent‘‘) passed within 30 Business Days after the date of that notice. ASuspension Period may be terminated at any time by a further Majority Consent or when theAdvisory Committee approves a replacement to the relevant Key Individual. Within 20 BusinessDays after the end of a Suspension Period, the Investment Period may be terminated bySpecial Consent.

Distributions

Under the Limited Partnership Agreement, distributions to Limited Partners will be made asdetermined by the General Partner. The General Partner will not be permitted to cause the MasterFund to make a distribution if the Master Fund does not have sufficient cash available to make thedistribution, the distribution would render the Master Fund insolvent or if, in the opinion of theGeneral Partner, the distribution would or might reasonably be expected to leave the Master Fundwith insufficient funds to meet any future contingent obligations.

Any net income, net income losses, capital gains and capital gains losses shall be allocated to theLimited Partners pro rata according to their respective Interests.

Proceeds that are available for distribution shall be distributed in the following proportions andorder of priority (‘‘Distribution Waterfall’’):

(a) first, 100 per cent to the Limited Partners pro rata to their respective commitments untilLimited Partners have received distributions in aggregate equal to the amounts drawn downfrom them (to the extent not previously distributed);

(b) second, 100 per cent to the Limited Partners pro rata their respective commitments until eachLimited Partner has received an amount equal to the Preferred Return on the amounts drawndown from such Limited Partner;

(c) third, 40 per cent to the Limited Partners, pro rata to their respective commitments, and60 per cent to the Special Limited Investor until the cumulative distributions to the SpecialLimited Investor made under this paragraph (c) equal 20 per cent of the total amountsdistributed under paragraph (b) above and this paragraph (c); and

(d) fourthly, 80 per cent to the Limited Partners pro rata to their respective commitments and20 per cent to the Special Limited Investor.

At the end of the life of the Master Fund any funds remaining will be distributed. The GeneralPartner anticipates the distribution being made in cash. The General Partner may, in its discretion,distribute all or any of the Master Fund assets in specie. Where reasonably practicable each Limited

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Partner will be offered the choice as to whether to receive the Master Fund assets in specie or ascash.

The Special Limited Investor will escrow 50 per cent of amounts distributed to it pursuant to theDistribution Waterfall (less an amount required to meet any tax liability of the Special LimitedInvestor in relation to its Carried Interest entitlement). At the end of the life of the Master Fund, ifLimited Partners have not received distributions equal to the greater of (i) their drawn downcommitments and their Preferred Return; and (ii) their drawn down commitments plus an amountequal to 80 per cent of the excess of all distributions made to them and the Special Limited Investorover the aggregate amount of the drawn down commitment from Limited Partners, the escrowamount will be drawn and paid to Limited Partners (but not to the Special Limited Investor) tomeet the required shortfall amount. However if the escrow amount is insufficient to meet theshortfall the Special Limited Investor will not be required to make up any remaining shortfall.

Assignment of Interests

Limited Partners may transfer their Interests with the prior written consent of the General Partner,whose consent may be withheld in its sole discretion. Transfers of all or part of an Interest to anAssociate of a Limited Partner are permitted provided that (i) the Associate of such LimitedPartner is either, in the reasonable opinion of the General Partner, of similar financial standing tothe Limited Partner or the Limited Partner provides a guarantee for any part of the commitmentthat remains undrawn or is capable of being redrawn (ii) the Associate of such Limited Partnerenters into a deed of adherence in a form satisfactory to the General Partner and (iii) if the personto which the Interest was transferred ceases to be an Associate of the transferring Limited Partnerthe Interest shall be immediately transferred back to the transferring Limited Partner and theGeneral Partner may withhold its consent where it reasonably determines that the transfer mightresult in the Master Fund incurring a tax liability.

Termination and Extension of the life of the Master Fund

The Master Fund will terminate upon the earlier to occur of (i) 22 December 2014, (ii) the service ofa notice by the General Partner of the bankruptcy, insolvency, dissolution, liquidation, removal,withdrawal or expulsion of the General Partner (unless the Limited Partners vote by MajorityConsent to replace the General Partner and continue the Master Fund), (iii) notice served on theGeneral Partner following a non-appealable judgement by a court of law of a conscious andmaterial breach of the Limited Partnership Agreement, fraud, wilful illegal acts, wilful default orgross negligence by the General Partner or the Investment Adviser which results in the MasterFund and/or the Limited Partners suffering material financial disadvantage, (iv) the service of noticeby the General Partner that all Investments have been realised and the realisation proceeds havebeen distributed, (v) the agreement of the General Partner and Limited Partners by SpecialConsent, (vi) notice served on the General Partner by approval of a Special Consent, (vii) theservice of notice by the General Partner that the continuation of the Master Fund has becomeunlawful, or impractical or inadvisable.

In the case of (vi): (i) the Investment Adviser shall be entitled to resign and, in addition to fees dueto it under the Master Fund Investment Advisory Agreement, will be entitled compensation equalto the Advisory Fee for a six month period; (ii) the Special Limited Investor shall be paid an amountequal to all amounts that would be due to it under the Distribution Waterfall, the value of suchassets being determined at market value (such payment not to be subject to escrow or clawbackarrangement); and (iii) the Co-Sponsor and Management Investor shall be paid an amount equal totheir commitments to the Master Fund.

The life of the Master Fund may be extended at the discretion of the General Partner for amaximum of two years and one month by the addition of a one year period and a one year and onemonth period.

Liquidation and Distribution of Proceeds

Upon liquidation of the Master Fund, the General Partner will act as the liquidating trustee unlessthe Master Fund was terminated by (ii) or (iii) above in which case the Limited Partners byMajority Consent may direct otherwise. If the General Partner is acting as the liquidating trustee, itwill be entitled to receive remuneration in an amount equal to 1 per cent per annum of the total

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acquisition costs of Investments assets that remain within the Master Fund for acting in suchcapacity.

The liquidating trustee may dispose of the assets of the Master Fund on the best terms available.Alternatively, the liquidating trustee may, in its discretion, distribute all or any of the Master Fundassets in specie. Where reasonably practicable each Limited Partner will be offered the choice as towhether to receive the Master Fund assets in specie or as cash.

Neither the General Partner nor the Investment Adviser will be personally liable for the return ofthe capital contributions or loans of Limited Partners.

Financial Statements and Reports

Under the Limited Partnership Agreement, the General Partner is required to prepare financialstatements in accordance with IFRS on an annual basis. The Master Fund’s accounting referencedate is 31 December. The Master Fund’s first accounting period commenced on 22 December 2009(the date the Master Fund commenced operations).

The General Partner shall cause such financial statements to be audited by a firm of internationallyrecognised chartered accountants within 90 Business Days of 31 December each year. Each LimitedPartner will receive audited annual financial statements for the Master Fund.

Within 60 days of the end of each period of three months ending on the last day of 31 March,30 June, 30 September and 31 December in each year, the General Partner shall prepare and sendto each Limited Partner a report comprising a statement of the Investments, details of theInvestments purchased, sold and otherwise disposed of during the relevant period and details of allborrowings entered into on behalf of the Master Fund and all guarantees, indemnities, covenantsand undertakings given in favour of third parties on behalf of the Master Fund. The reports willinclude the General Partner’s quarterly valuations of Investments. Each Limited Partner will alsoreceive a quarterly individual statement showing its financial position in respect of its interest.

The General Partner will send to each Limited Partner the audited annual accounts for the MasterFund as soon as reasonably possible and shall use its best endeavours to deliver such audited annualaccounts within 180 days of the end of the financial year of the Master Fund.

Meetings

The Limited Partnership Agreement provides that the General Partner will organise an annualmeeting of the Limited Partners and will organise meetings of the Limited Partners at such time asthe General Partner, the Investment Adviser, Advisory Committee or Limited Partnersrepresenting 75 per cent of Commitments may determine. Each annual meeting will be heldwithin 15 months of the previous annual meeting. The General Partner will present a report on theprogress of the Master Fund at the meeting.

No Management or Control; Voting Rights

The Limited Partners, in their capacities as such, may not take part in the management of thebusiness and affairs of the Master Fund and do not have any right or authority to act for or to bindthe Master Fund or to take part or interfere in the conduct or management of the Master Fund.

Under the Limited Partnership Agreement, the Limited Partners may by a Majority Consent:

. terminate the Limited Partnership Agreement for a cause event (which includes a consciousand material breach, fraud, wilful illegal acts, wilful default or gross negligence by the GeneralPartner or the Investment Adviser) which results in the Master Fund and/or the LimitedPartners suffering material financial disadvantage;

. suspend the General Partner’s ability to issue a drawdown notice if the Key Individual ceasesto be employed by the Investment Adviser; or

. block certain amendments to the Limited Partnership Agreement as described under‘‘Amendment of the Limited Partnership Agreement’’.

Under the Limited Partnership Agreement, the General Partner may not take certain key actions inwithout the approval of a Special Consent.

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The Advisory Committee

Each Limited Partner which makes a commitment of £25 million or more in the Master Fund mayappoint one member to the Advisory Committee. The General Partner may use its discretion toallow Limited Partners with a commitment of less than £25 million to appoint a member to theAdvisory Committee. Non-investors may be appointed as members of the Advisory Committee bythe General Partner, provided that each such appointment is first approved by the existing LimitedPartner members of the Advisory Committee.

The Advisory Committee’s role is to oversee the activities of the Investment Adviser and theMaster Fund. The Advisory Committee will provide such advice and counsel as is requested by theMaster Fund in connection with adherence to and departures from the Master Fund’s investmentpolicy and restrictions, borrowings, potential conflicts of interest, adherence to the Debt Strategyand Hedging Policy and review any valuation of the Investments or proposed investment of theMaster Fund.

The Advisory Committee has no decision making powers vis-a-vis the Master Fund. The AdvisoryCommittee will be formerly established after the Final Closing Date.

Investment Committee

The General Partner has established an Investment Committee to review, on behalf of LimitedPartners, proposed investments within defined parameters put forward by the Investment Adviserand to decide whether the Investment Adviser’s recommendations or acquisitions or disposals ofInvestments can be submitted to the Master Fund. The Investment Committee will have at least twomembers including, at all times, the Key Individual and an individual appointed by the SeedInvestor. Dale Lattanzio (as the Key Individual) and Andrew Walker (as the individual appointedby the Seed Investor) have been appointed to the Investment Committee. The General Partner mayappoint further members of the Investment Committee. All votes of the Investment Committee aredecided by majority consent provided that the Investment Adviser or Seed Investor may veto adecision of the Investment Committee.

Indemnification; Limitation on Liability

Under the Limited Partnership Agreement the Master Fund is required to indemnify the GeneralPartner, the Special Limited Investor, the Investment Adviser and the Investment Committee, theirrespective associates, director, officers, shareholders, partners, agents, consultants and employeesand members of the Advisory Committee against all claims, liabilities, costs or expenses incurred byan indemnified person by reason of their holding such positions, except resulting from theindemnified person’s bad faith, fraud, gross negligence or wilful misconduct, reckless disregard,wilful breach which results in the Master Fund and/or Limited Partners suffering material financialdisadvantage.

Amendment of the Limited Partnership Agreement

The General Partner may with a Majority Consent amend or waive any provision of the LimitedPartnership Agreement provided that no variation shall be made which shall amend the terms of thevariation clause, which imposes upon any Limited Partner any obligation to make any furtherpayment to the Master Fund beyond the amount of its commitment; or which would in thereasonable opinion of the General Partner otherwise adversely affect the rights and interestsgranted to Limited Partners as a whole, without the affirmative consent of each Limited Partner soaffected.

Governing Law

The Limited Partnership Agreement is governed by and will be construed in accordance with thelaws of the Cayman Islands.

2.2 Master Fund Administration Agreement

The Administrator has been appointed, pursuant to the Master Fund Administration Agreement, toprovide administration and accounting services to the Master Fund.

The Master Fund Administration Agreement provides for the payment by the Master Fund of a feeor fees and expenses as may be agreed to in writing by the Master Fund and the Administrator.

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The Master Fund Administration Agreement contains provisions whereby the Master Fundindemnifies, defends and holds harmless the Administrator from and against all taxes, charges,expenses, assessments, claims and liabilities arising directly or indirectly from any action oromission to act which the Administrator takes in connection with the provision of the services to theMaster Fund except to the extent that any liability has resulted from the fraud, wilful misfeasance,bad faith, negligence or reckless disregard in the performance of the Administrator’s obligationsand activities under the Master Fund Administration Agreement.

The Master Fund Administration Agreement is terminable upon sixty (60) days’ written notice byeither the Master Fund or the Administrator.

2.3 Cayman Company Administration Agreement

The Administrator has been appointed, pursuant to the Cayman Company AdministrationAgreement, to provide administration and accounting services to the Cayman Company.

The Cayman Company Administration Agreement provides for the payment by the CaymanCompany of a fee or fees and expenses as may be agreed to in writing by the Cayman Company andthe Administrator.

The Cayman Company Administration Agreement contains provisions whereby the CaymanCompany indemnifies, defends and holds harmless the Administrator from and against all taxes,charges, expenses, assessments, claims and liabilities arising directly or indirectly from any action oromission to act which the Administrator takes in connection with the provision of the services to theCayman Company except to the extent that any liability has resulted from the fraud, wilfulmisfeasance, bad faith, negligence or reckless disregard in the performance of the Administrator’sobligations and activities under the Cayman Company Administration Agreement.

The Cayman Company Administration Agreement is terminable upon sixty (60) days’ writtennotice by either the Cayman Company or the Administrator.

2.4 Master Fund Cash Custodian Agreement

The Custodian has been appointed, pursuant to the Master Fund Cash Custodian Agreement, to actas cash custodian of the Master Fund. The Master Fund Cash Custodian Agreement containsprovisions whereby the Master Fund indemnifies and holds harmless the Custodian save where suchcircumstances arise as a result of the wilful misfeasance, bad faith, negligence or reckless disregardin the performance of the Custodian’s duties and actions under the Master Fund Cash CustodianAgreement.

The Master Fund Cash Custodian Agreement provides for the payment by the Master Fund of a feeor fees and expenses as may be agreed to in writing by the Master Fund and the Custodian.

The Master Fund Cash Custodian Agreement is terminable upon sixty (60) days’ written notice byeither the Master Fund or the Custodian.

2.5 Cayman Company Cash Custodian Agreement

The Custodian has been appointed, pursuant to the Cayman Company Cash Custodian Agreement,to act as cash custodian of the Cayman Company. The Cayman Company Cash CustodianAgreement contains provisions whereby the Cayman Company indemnifies and holds harmless theCustodian save where such circumstances arise as a result of the wilful misfeasance, bad faith,negligence or reckless disregard in the performance of the Custodian’s duties and actions under theCayman Company Cash Custodian Agreement.

The Cayman Company Cash Custodian Agreement provides for the payment by the CaymanCompany of a fee or fees and expenses as may be agreed to in writing by the Cayman Company andthe Custodian.

The Cayman Company Cash Custodian Agreement is terminable upon sixty (60) days’ writtennotice by either the Cayman Company or the Custodian.

2.6 Luxembourg Company Custodian Agreement

The Custodian has been appointed, pursuant to the Luxembourg Company Custodian Agreement,to act as custodian of the Luxembourg Company. The Luxembourg Company CustodianAgreement contains provisions whereby the Luxembourg Company indemnifies and holds

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harmless the Custodian save where such circumstances arise as a result of the wilful misfeasance,bad faith, negligence or reckless disregard in the performance of the Custodian’s duties and actionsunder the Luxembourg Company Custodian Agreement.

The Luxembourg Company Custodian Agreement provides for the payment by the LuxembourgCompany of a fee or fees and expenses as may be agreed to in writing by the Luxembourg Companyand the Custodian. The Luxembourg Company Custodian Agreement is terminable upon sixty (60)days’ written notice by either the Luxembourg Company or the Custodian.

2.7 Master Fund Investment Advisory Agreement

The Investment Adviser was appointed as the investment adviser of the Master Fund on11 December 2009 pursuant to the Master Fund Investment Advisory Agreement. The Master FundInvestment Advisory Agreement was amended on 18 February 2011.

Under the Master Fund Investment Advisory Agreement, the Investment Adviser provides certaininvestment advisory services, including:

(a) recommending the investment strategy for the Master Fund and updating the strategy fromtime to time as requested by the Master Fund;

(b) recommending and regularly review the Master Fund’s investment policy;

(c) attending board meetings (as spectators only) of the General Partner and the CaymanCompany as required; and

(d) providing such other advice as the Master Fund or the Cayman Company may request.

In addition, the Investment Adviser will be responsible for the following:

(a) preparing and implementing an annual business plan for the Master Fund;

(b) procuring accounting and financial reporting services of the Master Fund (such services to becarried out by the Administrator);

(c) maintaining legal, regulatory and taxation obligations of the Master Fund (such services to becarried out by the Administrator); and

(d) preparing a quarterly report on the progress of the Master Fund and the Investments.

Furthermore, the Investment Adviser will:

(a) identify potential Investments;

(b) perform due diligence, including but not limited to, financial, technical and market projectionsfor all Investments;

(c) source financing and prepare the entering into of any debt financing by the Master Fund;

(d) make Investment acquisitions or disposals; and

(e) provide asset management advice in respect of the Investments.

It is a provision of the Master Fund Investment Advisory Agreement that Dale Lattanzio,Rob Clayton and Cyrus Korat dedicate substantially all their employment time to the provision ofinvestment advisory services to the Master Fund. Tue Sando will dedicate up to 50 per cent of hisemployment time to the provision of investment advisory services to the Master Fund.

Term

The Master Fund Investment Advisory Agreement is for a term corresponding to the term of theMaster Fund unless terminated earlier by the insolvency of the Master Fund or the InvestmentAdviser or if the Investment Adviser commits an act of fraud or is guilty of gross negligence orwilful default. The Master Fund Investment Advisory Agreement may be terminated by theCayman Company or Master Fund (in each case with a Special Consent) or by the InvestmentAdviser giving written notice to the others following a material breach by a party which is notrectified within 90 days of notice.

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Indemnity and extent of liability

The Investment Adviser will not, in the absence of gross negligence, wilful default or fraud on itspart be liable for any loss or damage or cost, claim or expense suffered by the Master Fund orarising from and depreciation in the value of the Investments or income derived from theInvestments. In addition, the Master Fund and Cayman Company indemnify the InvestmentAdviser and its directors, employees and agents against all or any actions, proceedings, claims,demands and liabilities (other than those resulting from gross negligence, wilful default or fraud onthe part of the Investment Adviser or its directors, employees or agents) arising out of the properperformance of the Investment Adviser’s duties pursuant to the Master Fund Investment AdvisoryAgreement.

Fees

During the Investment Period the Investment Adviser receives an Advisory Fee of 2 per cent (plusVAT if applicable) per annum of total commitments. The Advisory Fee shall be calculated on thebasis of total commitments at the Final Closing Date. After the end of the Investment Period, theAdvisory Fee shall be 2 per cent (plus VAT if applicable) per annum of the total acquisition cost ofall Investments which remain unrealised prior to the start of the relevant financial year and whichhave not been written off, calculated by reference to the opening balance of the quarter prior to thatin which the Advisory Fee is charged.

Any Limited Partner that makes a commitment of £25 million or more to the Master Fund shallreceive a rebate from the Investment Adviser such that its effective Advisory Fee in respect of itscommitment shall be 1.5% per annum. The Investment Adviser may, in its sole discretion, agreewith any Limited Partner other rebate arrangements as it deems appropriate. Such a rebated feearrangement may be effected by netting off the rebated amount against a Limited Partner’sdrawdown obligations.

The Advisory Fee is paid to the Investment Adviser quarterly in advance on 31 March, 30 June,30 September and 31 December.

Exclusivity and Non-compete

Neither the Investment Adviser nor any Associate of the Investment Adviser may invest in, adviseor manage another fund with an investment policy and restrictions that are substantially similar tothe Investment Policy and Restrictions (a ‘‘Successor Fund’’) until the earlier of: (i) such time as atleast 75 per cent of commitments have been drawn down or committed, (ii) following the end of theInvestment Period, (iii) Special Consent being given, or (iv) the termination of the Master Fund.

Once the date referred to above has passed, the Investment Adviser undertakes to ensure that anyinvestment opportunity which is suitable for both the Master Fund and a Successor Fund will beoffered to the Master Fund. To the extent that an investment opportunity remains availablefollowing investment by the Master Fund or having been offered to the Master Fund to the extent itwas declined then the Investment Adviser may offer such investment opportunity to a SuccessorFund.

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3. THE DIRECTORS OF THE GENERAL PARTNER

3.1 The directors of the General Partner currently hold, and have during the five years preceding thedate of this document held, the following directorships, partnerships or have been a member of thesenior management:

Name Name of company/partnershipPosition still held

(Y/N)

Tue Sando Duet Alternative Investments (UK) Limited YUrban Pots Limited YFundao Ltd YEuropean Real Estate Debt Fund (GP) Limited YDurum (GP2) Limited NDuet Alternative Investments Limited YDuet Commodities Fund Limited NDuet Commodities Fund Master Fund SPC NDuet Alternative Investments Malta Ltd YDuet Alternative Investments Malta Holding Ltd YDuet Synthetic Loan Fund Limited N

Andrew Walker Forum European Realty Income GP Limited YForum European Realty Income II GP Limited YForum European Realty Income III GP Limited YBruin I S.a.r.l YForum Holdings Limited YForum Partners Investment Management LLC YForum Partners Europe (UK) LLP YChambertin S.a.r.l YConstantia S.a.r.l YFERI S.a.r.l YMontalcino S.a.r.l YNoir I S.a.r.l YVerde I S.a.r.l YWiltshire Realty Investments LLC YWIAG Wohnimmobilien AG YZublin Immobiliere France SA YZublin Immobiliere Holding AG YNew River Retail YRoxhill Developments Limited YAffine S.A. Y

3.2 Save as disclosed above, none of the directors of the General Partner has at any time within the lastfive years preceding the date of this document:

. been a member of the administrative, management or supervisory bodies or a partner of anycompany or partnership;

. had any convictions (whether spent or unspent) in relation to offences involving fraud ordishonesty;

. been the subject of any official public incrimination and/or sanctions by statutory or regulatoryauthorities (including designated professional bodies) or been disqualified by a court fromacting as a director of a company or from acting in the management or conduct of the affairs ofany company;

. been a director or senior manager of a company which has been put into receivership,compulsory liquidation, administration, company voluntary arrangement or any compositionor arrangement with its creditors generally or any class of its creditors; or

. been the subject of any bankruptcy or been subject to an individual voluntary arrangement ora bankruptcy restrictions order.

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3.3 There are no service agreements governing the appointment of the directors of the General Partner.The directors of the General Partner do not receive any remuneration or any pension, retirement orsimilar benefits in relation to their functions as directors of the General Partner.

4. RELATED PARTY TRANSACTIONS

For details of related party transactions relating to the Master Fund, please refer to note 17 to the auditedconsolidated financial statements of the Master Fund for the period ended 31 December 2010 in Part 11of this document. There are no other related party transactions that the Master Fund has entered intosince its incorporation.

5. LITIGATION

There are no governmental, legal or arbitration proceedings (including any such proceedings which arepending or threatened of which the Master Fund is aware), during the 12 month period prior to the dateof publication of this document, which may have, or have had since the date of its incorporation to thedate of this document, a significant effect on the Master Fund’s financial position or profitability.

6. INVESTMENT RESTRICTIONS

The Master Fund is required to manage and invest its assets in accordance with its published investmentpolicy and strategy. The investment policy and strategy of the Master Fund is summarised in paragraphs 2and 3 of Part 4 of this document. The investment policy and strategy of the Master Fund may be amendedfrom time to time by the Limited Partners. The Master Fund is not subject to any other investmentrestrictions.

7. GENERAL

7.1 Since 31 December 2010, the Master Fund has drawn down, in aggregate, a net amount of£15,825,399 from Limited Partners pursuant to their commitments and has made investments, inaggregate, of £27,700,000. There has otherwise been no significant change in the financial or tradingposition of the Master Fund since 31 December 2010.

7.2 There are no corporate governance codes that apply to limited partnerships incorporated in theCayman Islands and therefore to the Master Fund.

7.3 Typical investors in the Master Fund are institutional and other sophisticated investors.

8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the consolidated financial statements of the Master Fund that are reproduced in Part 11 of thisdocument will be available for inspection during normal business hours on any day (except Saturdays,Sundays, bank and public holidays) free of charge to the public at the offices of the Company and at theoffices of Berwin Leighton Paisner LLP, Adelaide House, London Bridge, London EC4R 9HA from thedate of this document until the first anniversary of Admission.

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PART 11

FINANCIAL INFORMATION

Consolidated financial statements of the Master Fund set out below represent the financial statements ofthe Master Fund as published and the audit opinion thereon for the period ended 31 December 2010. Theconsolidated financial statements were audited by PricewaterhouseCoopers Accountants NV.

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THIS PAGE IS INTENTIONALLY LEFT BLANK

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EUROPEAN REAL ESTATE DEBT FUND L.P.

A CAYMAN ISLANDS LIMITED PARTNERSHIP

AUDITED CONSOLIDATED FINANCIAL STATEMENTSFOR THE PERIOD FROM 22 DECEMBER 2009 (COMMENCEMENT OF OPERATIONS) TO

31 DECEMBER 2010

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Table of Contents Page No.

General Information 2

Directors’ Report 3

Consolidated Statement of Financial Position 5

Consolidated Statement of Comprehensive Income 6

Consolidated Statement of Changes in Equity 7

Consolidated Statement of Cash Flows 8

Notes to the Financial Statements 9

Independent Auditors’ Report 25

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

General Information

Directors of the General Partner Investment Advisor

Dale Lattanzio Duet Private Equity Limited

Mark Pearson 27 Hill Street

London W1J 5LP

United Kingdom

Independent Auditors Registered Office

PricewaterhouseCoopers Accountants N.V. P.O. Box1348, North Church Street,

Fascinatio Boulevard 350 George Town, Grand Cayman KY1-1108,

3065 WB Rotterdam Cayman Islands

The Netherlands

Administrator Legal Adviser to the Fund

BNYMellon Investment Servicing (International) Limited* Berwin Leighton Paisner LLP

Riverside Two Adelaide House

Sir John Rogerson's Quay London Bridge

Grand Canal Dock London EC4R 9HA

Dublin 2 United Kingdom

Ireland

Prime Broker & Custodian

BNYMellon International Bank Limited*

Riverside Two

Sir John Rogerson's Quay

Grand Canal Dock

Dublin 2

Ireland

*In July 2010 PNC Global Investment Servicing (Europe) Limited changed its name to BNY Mellon InvestmentServicing (International) Limited and PNC International Bank Limited changed its name to BNY Mellon InternationalBank Limited.

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Directors’ ReportFor the Year ended December 31, 2010

The Directors submit herewith their annual report together with the audited consolidated financial statements for the periodfrom 22 December 2009 (commencement of operations) to 31 December 2010 of the European Real Estate Debt Fund LP(the “Partnership”).

Principal Activities and Review of the Business

The Partnership is structured as an exempted limited partnership registered in the Cayman Islands. The Partnership wasestablished on 2 January 2009 and raised GB£91.55m of commitments in its first close on 22 December 2009. ThePartnership commenced operations on 22 December 2009, and raised a further GB£10.845 million in its second close on 23December 2010, bringing the total Partnership commitments to GB£102.4 million.

The Partnership makes new loans as well as buying existing loans and bonds collateralised by European commercial realestate. Investments are in debt instruments which benefit from the protection of being a secured loan or bond. TheseInvestments are intended to be held for the medium to long term with a view to realising interest income and possible longterm capital gain.

The Partnership targets a Gross IRR of 15 per cent or greater per annum, with a cash income component providing for a netdistribution to Limited Partners in excess of 7 per cent per annum. The cash income component reflects the anticipated cashcoupon the Partnership expects to receive on its investments once fully invested.

The Partnership has made four investments since it commenced operations totalling GB£35.4m of which one has beenrealised at a profit of GB£1.085m, representing an IRR in respect of that investment of 23.9 per cent.

Principal Risks and Uncertainties

The principal risks and uncertainties faced by the Partnership are market price, interest rate, foreign currency, liquidity andcredit/counterparty risk. These are detailed in note 3.

Proper Books of Account

The Directors believe that they have complied with the regulations with regards to books of account by engaging the servicesof BNY Global Investment Servicing (International) Limited, which provides administration services to the Partnership.Services include providing the Partnership with such assistance and systems necessary for the maintenance of all corporaterecords and books of account. The books of account of the Company are maintained at Riverside Two, Sir John Rogerson’sQuay, Grand Canal Dock, Dublin 2, Ireland.

Results and Dividends

The results for the year are set out in the Profit and Loss Account. The Directors do not propose to pay a dividend at thistime.

Directors

The names of the persons who were Directors at year end are set out on page 2.

Directors’ and Secretary’s Interests

The Directors and Secretary, and their families had no interests in the Shares of the Company at December 31, 2010.

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Directors’ Report (Continued)For the Year ended December 31, 2010

Subsequent Events

Post balance sheet events are outlined in note 17 of the financial statements.

Independent Auditor

PWC have expressed their willingness to continue in office.

Approved on behalf of the Directors of the General Partner:

Dale Lattanzio Mark PearsonDirector Director

Date: 27 January 2011

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Consolidated Statement of Financial Position as at 31 December 2010

Note 31 December 2010

GB£

Assets

Cash and cash equivalents 2,10 14,539,768

Restricted cash account 2,11 2,341,525

Financial assets at fair value through profit or loss 2,4,8 12,574,216

Loans and receivables 5 16,673,580

Contributions receivable 12 4,950,131

Interest receivable 374,042

Other receivables and prepayments 6 387,188

Total assets 51,840,450

Partners' Capital

General Partner Capital 100

Special Limited Partner 200

Limited Partner Capital 46,359,385

Total Partners' Capital 46,359,685

Liabilities

Financial liabilities at fair value through profit or loss 2,4,8 317,948

Contributions repayable 12 4,770,554

Administration fee payable 13 48,000

Advisory fee payable 13 179,576

Other accrued expenses 164,687

Total liabilities 5,480,765

Total Partners' Capital and liabilities 51,840,450

The accompanying notes are an integral part of the financial statements.

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Consolidated Statement of Comprehensive Income for the period from 22 December 2009 (commencement ofoperations) to 31 December 2010

2010

Note GB£

Income

Interest income 7 685,728

Net gain on financial assets at fair value through profit or loss 9 1,637,964

Total net income 2,323,692

Expenses

Net loss on financial liabilities at fair value through profit or loss 9 (117,428)

Administration and custodian fee 13 (115,703)

Advisory fee 13 (1,074,144)

Audit, legal and professional fees (46,000)Directors emoluments 16 (10,230)

Set-up costs 2 (685,099)

Derivative interest payment 3 (104,909)

Other expenses (143,873)

Total operating expenses (2,297,386)

Other comprehensive income -

Total comprehensive income 26,306

The accompanying notes are an integral part of the financial statements.

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Statement of Changes in Partners’ Capital to holders of Redeemable Shares for the period from 22 December 2009(commencement of operations) to 31 December 2010

Note General Partner Special Limited Partner Limited Partner Total

GB£ GB£ GB£ GB£

Partners’ Capital at beginning of year - - - -

Capital contributions 17 100 200 51,103,633 51,103,933

Reallocation capital withdrawn 12 - - (4,770,554) (4,770,554)

Allocation of net gain for the year

Pro-rata allocation - - 26,306 26,306

- - 26,306 26,306

Partners’ Capital at end of year 100 200 46,359,385 46,359,685

The accompanying notes are an integral part of the financial statements.

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Consolidated Statement of Cash Flows for the period ended 31 December 2010

Note 2010

GB£

Cash flows from operating activities

Net increase in partners' capital resulting from operations 26,306

Adjustments for:

Interest income (685,728)

Interest expense 107,287

Total cashflowfrom operating activities after adjustments (552,135)

Cash flowfrom operating activities before working capital changes

Net increase in restricted cash accounts (2,341,525)

Net increase in financial assets and liabilities at fair value through profit or loss (12,256,268)

Net increase in loans and receivables (16,673,580)

Net increase in other receivables and prepayments (387,188)

Net increase in administration fee payable 48,000

Net increase in advisory fee payable 179,576

Net increase in other accrued expenses 59,778

Total cash flow from operating activities before working capital changes (31,371,207)

Net cash used in operating activities (31,923,342)

Cash from operating activities

Interest received 311,686

Net cash used in operating activities (31,611,656)

Cash flows from financing activities

Interest paid (2,378)

Contributions receivable 12 (4,950,131)

Contributions repayable 12 4,770,554

Capital Contributions 17 46,333,379Net cash flows used in financing activities 46,151,424

Net increase in cash and cash equivalents 14,539,768

Cash and cash equivalents, beginning of period -

Cash and cash equivalents, end of period 14,539,768

The accompanying notes are an integral part of the financial statements.

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Notes to the Consolidated Financial Statements

1. Organisation

The European Real Estate Debt Fund L.P. (the “Partnership”), is a Cayman Islands registered limited partnership,incorporated on 2 January 2009 and commenced operations on 22 December 2009.

European Real Estate Fund (GP) Limited, (the “General Partner a Cayman Islands limited company, isGeneral Partner to the Partnership.

The Partnership has two subsidiaries as at December 31, 2010, the European Real Estate Debt Fund (Cayman) Ltd (the“Cayman Company”), a Cayman Islands registered limited company, incorporated on 4 December 2008 and theEuropean Real Estate Debt Fund S.à-r.l (the “Luxembourg Company”), a Luxembourg registered limited companyincorporated on 11 November 2009.

The Luxembourg Company is a wholly owned subsidiary of the Cayman Company, which is a wholly ownedsubsidiary of the Partnership. In addition and in order to meet the needs of certain Investors, feeder vehicles may alsobe created. The structure of the Partnership will allow participation in the Partnership by Investors, either directly orindirectly through feeder vehicles that may be established to meet specific legal, tax and regulatory needs of certaininvestors.

On 11 December 2009, the Partnership entered into a GB£400,000,000 loan facility with the Cayman Company, whichcan be used in whole or in part to fund lending by the Cayman Company to the Luxembourg Company and for generalcorporate purposes. As of 31 December 2010, the Cayman Company had drawn down GB£44,653,225 of the Partnershiploan facility, and the Luxembourg Company had drawn down GB£43,526,208 of the Cayman Company loan facility.

The Partnership’s strategy is to invest in and provide debt for commercial real estate primarily in the UK and Germanyand additionally in the rest of the EU, Norway and Switzerland. The Partnership will purchase existing loans and bondsat a discount from current lenders/owners as well as providing new financing directly to borrowers possibly inconjunction with other senior lenders. The Partnership might also participate in equity upside through hybrid structureswhilst benefiting from the downside protection of being a secured loan provider.

The General Partner has established an Investment Committee to review proposed transactions in order to assist thePartnership in making investment decisions. The Investment Committee will convene when required forapproving/declining new debt investments proposed by the Investment Advisor, extraordinary items and the ongoingmonitoring of the Partnership, and will convene, at least quarterly during the time up to the date falling 30 months fromthe first date the Partnership accepts applications and admit investors, or such earlier date as may be determined by thePartnership after at least 90% of the aggregate commitments have been invested, committed, allocated or reserved, (the“Investment Period”) to: (i) ensure adherence to the Partnership’s objectives, (ii) to review investments and strategy,(iii) to review Partnership performance, including quarterly performance, cash-flows and budgets, (iv) to reviewindicators and market commentary of European property markets and outlooks on underlying real estate sectors. TheGeneral Partner may extend the Investment Period by up to six months.

The Advisory Committee’s role is to oversee the activities of the Investment Advisor and the Partnership. It shall meetwhen requested by the Partnership, the Investment Committee or by any Investor (but, in any event, at least once inevery calendar year) to carry out, amongst others, the following tasks: (i) to review any amendments to the investmentobjective, borrowings or other material terms of the Partnership’s investment strategy and to make recommendationswith respect thereto to the Investment Advisor and the Partnership, (ii) to review any potential conflict between theInvestment Advisor, or any of its respective Associates and the Partnership and between the Partnership and any otherfund managed by the Investment Advisor, or any of its Associates, (iii) to review the Investment Advisor’s and GeneralPartner’s adherence to the Partnership documents and the debt strategy, (iv) to review any valuation of the investmentsand any investment proposal it may wish to review.

The function of the Advisory Committee is to consult with the Partnership in relation to the above matters. TheInvestors agree that the Advisory Committee’s decisions are of an advisory nature only and the Partnership shall not berequired to follow any advice or recommendation of the Advisory Committee. In particular the Advisory Committee

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Notes to the Consolidated Financial Statements

1. Organisation (continued)

Once the Partnership has been closed to investors, at least 70% of the Partnership’s total investments will be invested inthe largest and most mature real estate markets in Western Europe, being the UK and Germany. The remainder (if any)will be invested elsewhere in the EU, Norway and Switzerland.

The Partnership will terminate five years from the Initial Closing Date unless extended at the discretion of the GeneralPartner for a maximum of two years and one month by the addition of a one year period and a one year and one monthperiod.

2. Significant accounting policies

The principal accounting policies applied in the preparation of the Partnership’s financial statements are set out below.These policies have been consistently applied to all the years presented, unless otherwise stated.

Basis of preparation

The consolidated financial statements have been prepared in accordance with International Financial ReportingStandards (“IFRS”). The consolidated financial statements have been prepared under the historical cost convention, asmodified by the revaluation of financial assets and financial liabilities (including derivative financial instruments) at fairvalue through profit or loss.

The preparation of consolidated financial statements in accordance with International Financial Reporting Standardsrequires the Directors to make certain critical accounting estimates and judgements that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and thereported amounts of income and expenses during the year. Actual results could differ from those estimates.

The Consolidated Statement of Financial Position presents assets and liabilities in decreasing order of liquidity and doesnot distinguish between current and non-current items.

Basis of consolidation

The Partnership has adopted IAS 27: Consolidated and Separate Financial Statements. These annual audited consolidatedfinancial statements consolidate the financial statements of the Partnership. The Partnership has consolidated its interest inthe Cayman Company and the Luxembourg Company on the basis that it has the power to exercise control over bothoperations. All intercompany transactions and balances between the Partnership, Cayman Company and LuxembourgCompany have been eliminated.

Foreign currency translation

(a) Functional and presentation currency

Items included in the Partnership’s financial statements are measured using the currency of the primaryeconomic environment in which it operates (the ‘functional currency’). This is the UK Pound, which reflects thePartnership’s investor commitments that are in GB£. The Board of Directors considers the UK Pound as thecurrency that most faithfully represents the economic effects of the underlying transactions, events andconditions. The presentation currency is the same as the functional currency in these financial statements.

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Notes to the Consolidated Financial Statements (continued)

2. Significant accounting policies (continued)

Foreign currency translation (continued)

(b) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing atthe dates of the transactions. Foreign exchange gains and losses resulting from the settlement of suchtransactions and from the translation at year-end exchange rates of monetary assets and liabilities denominatedin foreign currencies are recognised in the Consolidated Statement of Comprehensive Income account. Proceedsfrom subscriptions and amounts paid on redemption of redeemable shares are translated using the exchangerates prevailing at the dates of the transactions. Translation differences on non-monetary financial assets andliabilities held at fair value through profit or loss are recognised in the Consolidated Statement ofComprehensive Income as part of the net gain/loss on financial assets and liabilities at fair value through profitor loss.

Financial assets and liabilities at fair value through profit or loss

The Partnership has designated its investments in debt instruments and derivatives as financial assets or financialliabilities at fair value through profit or loss at inception.

(i) Financial assets and liabilities held for trading

Financial assets and liabilities are classified as held for trading if it is acquired or incurred principally for thepurpose of selling or repurchasing in the near term. These also include derivatives such as forward contracts asthe Partnership does not designate any derivatives as hedges in a hedging relationship.

(ii) Financial assets and liabilities designated at fair value through profit or loss at inception

Financial assets and liabilities designated at fair value through profit or loss at inception are financialinstruments that are not classified as held for trading but are managed, and their performance is evaluated on afair value basis in accordance with the Partnership’s documented investment strategy. These includecommercial real estate debt. Short sales are classified as financial liabilities at fair value through profit or loss.

(b) Recognition and derecognition

Regular purchases and sales of investments are recognised on the trade date - the date on which the Partnership commitsto purchase or sell the assets. Financial assets and liabilities at fair value through profit or loss at inception are initiallymeasured at fair value with transaction costs for such instruments being recognised directly as expense in theConsolidated Statement of Comprehensive Income.

Financial assets are derecognised when the rights to receive cash flows from the assets have expired or the Partnershiphas transferred substantially all risks and rewards of ownership.

Subsequent to initial recognition, all financial assets and financial liabilities at fair value through profit or loss aremeasured at fair value. Gains and losses arising from changes in the fair value of the ‘financial assets or financialliabilities at fair value through profit or loss’ category are presented in the Consolidated Statement of ComprehensiveIncome within net gains and losses in fair value of financial assets and liabilities at fair value through profit or loss in theperiod in which they arise.

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Notes to the Consolidated Financial Statements (continued)

2. Significant accounting policies (continued)

Financial assets and liabilities at fair value through profit or loss (continued)

(c) Measurement

Subsequent to initial recognition, all financial assets and liabilities at fair value through profit or loss are measured atfair value with changes in their fair value recognised in the Consolidated Statement of Comprehensive Income in theyear in which they arise.

(i) Commercial Mortgage Backed Securities

The Investment Advisor will ascribe a valuation for each asset quarterly. Market values will be used wherevisible markets exist. Loans directly to borrowers for which no markets exists will be valued at amortised cost.Third party valuations, market levels and other valuation sources will be reviewed and audited as part of theannual audit.

(ii) Forward Currency Contracts

A forward currency contract is a commitment between the Partnership and a counterparty to make or takedelivery of a fixed amount of a specified foreign currency at a predetermined future date at a specific price. Ateach valuation, the difference between the contract price and the current forward rate for contracts of the samematurity is used to calculate the unrealised gain or loss of the Partnership’s forward currency contracts. Theunrealised gain or loss on forward currency contracts is calculated by reference to the difference between thecontracted rate and the market rate to close out such contracts and is included in the Consolidated Statement ofFinancial Position and in the Consolidated Statement of Comprehensive Income, as are all such realised gainsand losses.

(d) Fair value estimation

The fair value of financial assets and liabilities traded in active markets (such as publicly traded derivatives and tradingsecurities) are based on quoted market prices at the balance sheet date. The quoted market price used for financial assetsis the current bid price while the appropriate quoted market price for financial liabilities is the current asking price. Whenthe Partnership holds derivatives with offsetting market risks, it uses bid prices as a basis for establishing fair values forthe offsetting risk.

Restricted cash accountCash collateral provided by the Partnership is identified in the Consolidated Statement of Financial Position as restrictedcash account. Initial restricted cash deposits are made upon entering into swap interest rate contracts and are generallymade in cash or cash equivalents. Variations in restricted cash payments are made or received on traded swaps as dailyappreciation or depreciation occurs.

For collateral other than cash, if the party to whom the collateral is provided has the right by contract or custom to sell orrepledge the collateral, the Partnership classifies that asset in its Consolidated Statement of Financial Position separatelyfrom other assets and identifies the asset as pledged collateral. Where the party to whom the collateral is provided doesnot have the right to sell or repledge, a disclosure of the collateral provided is made in the notes to the financialstatements.

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Notes to the Consolidated Financial Statements (continued)

2. Significant accounting policies (continued)

Financial assets and liabilities at fair value through profit or loss (continued)

Interest Income and expensesInterest income is recorded on an effective interest basis. It includes interest income from cash and cash equivalents, ondebt securities at fair value though profit or loss and loans held to maturity. Expenses are recorded on an accrual basis.

Cash and cash equivalentsCash comprises cash on hand and bank overdraft. Cash equivalents are short term, highly liquid investments withoriginal maturities of 3 months or less that are readily convertible to known amounts of cash and which are subject toinsignificant changes in value, and are held for the purpose of the meeting short-term cash commitments rather than forinvestments or other purposes. Bank overdrafts are shown in current liabilities in the Consolidated Statement of financialPosition.

Offsetting financial instrumentsFinancial assets and liabilities are offset and the net amount reported in the Consolidated Statement of Financial Positionwhen there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis,or realise the asset and settle the liability simultaneously.

TaxationThe Partnership is exempt from all forms of taxation in the Cayman Islands, including income, capital gains andwithholding taxes. In jurisdictions other than the Cayman Islands, in some cases foreign taxes (withholding or capitalgains) will be withheld at source on certain interest received by the Partnership.

Set-up costsThe initial set up costs will be borne by the Fund, provided that the Fund will not pay more than £1m.

3. Risk Associated with Financial Instruments

The Partnership is exposed to market risk (including currency risk, interest rate risk and price risk), credit risk andliquidity risk arising from the financial instruments it holds. The risk exposure of the Partnership, is set out as follows:

The Partnership maintains active trading positions in a variety of derivative and non-derivative financial instruments asdictated by its investment management strategy.

The Partnership’s investing activities expose it to various types of risk that are associated with the financial instrumentsand markets in which it invests. The most important types of financial risk to which the Partnership is exposed to aremarket risk, credit risk and liquidity risk. Market risk includes currency risk, interest rate risk and market price risk.

The Partnership has investment guidelines that set out its overall business strategies, its tolerance for risk and its generalrisk management philosophy and has established processes to monitor and control economic hedging transactions in atimely and accurate manner. The Partnership’s accounting policies in relation to derivatives are set out in Note 2.

The Partnership maintains positions in derivative and non-derivative financial instruments as dictated by its investmentmanagement strategy. The primary objective of the Partnership is to generate superior absolute risk adjusted returns. ThePartnership seeks to provide partners with gross returns of 15% + per annum, with an income component of between 5-8% per annum, primarily through investing in commercial real estate debt in Europe.

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Notes to the Consolidated Financial Statements (continued)

3. Risk Associated with Financial Instruments (continued)

The Partnership’s assets and liabilities comprise financial instruments which include:

Loan assets. These are held with the Partnership’s investment objectives and policies; Commercial mortgage backed securities. These are held with the Partnership’s investment objectives and policies; Borrowings, the main purpose of which is to raise finance for the Partnership’s investment activities; Cash, liquid resources and short-term debtors and creditors that arise directly from its investment activities; and Derivative transactions which the Partnership enters into principally forward currency contracts, the purpose of which

is to manage the currency risk arising from the Partnership’s investment activities.

The nature and extent of the financial instruments outstanding at the Consolidated Statement of Financial Position dateand the risk management policies employed by the Partnership are discussed below. There can be no assurance that thePartnership will achieve its investment objective.

Market price riskMarket price risk arises mainly from uncertainty about future prices of financial instruments held. It represents thepotential loss the Partnership might suffer through holding market positions in the face of price movements. The keydrivers for changes in the market price of investments are changes in the actual or perceived value of the real estateassets securing investments. The Investment Advisor attempts to reduce this risk through careful underwriting andtransaction selection to focus on better quality deals that it feels will be less susceptible to negative market movements.

The Partnership’s overall market positions are managed on a weekly basis by the Investment Advisor and are monitoredon a quarterly basis by the Board of Directors.

At 31 December 2010, the fair value of financial assets and related derivatives exposed to price risk amounts toGB£28,929,848.

2010

GB£

Net notional exposure for commercial mortgage backed securities 12,574,216

Net notional exposure for loans 16,673,580

Net notional exposure for forward currency contracts

Date Amount Bought Amount Sold Contract Rate

10 June 2011 GB£5,140,396.80 EUR6,039,000 0.8512 (39,459)

20 January 2015 GB£2,823,150 EUR3,300,000 0.8555 (46,754)

20 January 2015 GB£11,439,280 EUR13,420,000 0.8524 (231,735)

Total exposure to price risk 28,929,848

The Partnership is exposed to price risk from its holding of commercial mortgage backed securities If pricesincreased/(decreased) by 10%, with all other variables held constant, net assets would increase /(decrease) byGB£1,257,422.

Interest riskThe Partnership holds cash balances, loans and commercial mortgage backed securities which are interest bearing. Assuch the Partnership is exposed to risks associated with the effects of fluctuations in the prevailing levels of marketinterest rates on its holdings. The instruments in which the Partnership invests are largely not very interest rate sensitive.Loans generally carry a high rate of cash pay interest reducing their sensitivity to interest rates, whilst the commercialmortgage backed securities carry floating rates of interest that are generally reset quarterly. The Investment Advisor mayseek to hedge any floating rate coupons to fixed rate via swaps in order to reduce the variability of its income.

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Notes to the Consolidated Financial Statements (continued)

3. Risk Associated with Financial Instruments (continued)

Interest risk (continued)

The interest rate profile of the Partnership’s investments at 31 December 2010 was:

More than Non-interest

On Demand 1-5 years 5 years bearing Total

GB£ GB£ GB£ GB£ GB£

Assets

Cash and cash equivalents 14,539,768 - - - 14,539,768Restricted cash account 2,341,525 - - - 2,341,525

Financial assets at fair value through

profit or loss

- 12,574,216 - - 12,574,216

Loans and receivables - 16,673,580 - - 16,673,580Contributions receivable - - - 4,950,131 4,950,131

Interest receivable 374,042 - - - 374,042

Other receivables and prepayments - - - 387,188 387,188

Total assets 17,255,335 29,247,796 - 5,337,319 51,840,450

Liabilities

Financial liabilities at fair value through

profit or loss

- - - (317,948) (317,948)

Contributions payable - - - (4,770,554) (4,770,554)

Administration fee payable - - - (48,000) (48,000)

Advisory fee payable - - - (179,576) (179,576)

Other accrued expenses - - - (164,687) (164,687)

Total liabilities - - - (5,480,765) (5,480,765)

Total interest sensitivity gap 17,255,335 29,247,796 - (143,446) 46,359,685

If interest rates had been 100 basis points higher and all other variables were held constant, the Partnership’s results for ayear would decrease by GB£166,736 only taking into consideration interest on the Danish loan.

Currency riskThe Partnership invests in securities and other investments that are denominated in currencies other than the functionalcurrency of the Partnership. Accordingly, the value of the Partnership’s assets may be affected favourably orunfavourably by fluctuations in the currency rates and therefore the Partnership will necessarily be subject to foreignexchange risks.

Balances in non-functional currencies typically occur on the realisation of gains/loss on the investments.

The Partnership’s overall currency risk is managed on a weekly basis by the Investment Advisor. In compliance with thePartnership’s offering document the Board of Directors are ultimately responsible for controlling the risk.

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Notes to the Consolidated Financial Statements (continued)

3. Risk Associated with Financial Instruments (continued)

The tables below summarises the Partnership’s exposure to currency risks as of 31 December 2010:

Monetary assets Non-monetary assets Forwards currency Net exposure

Currency GB£ GB£ GB£ GB£

Euro 10,542 16,673,580 (19,402,755) (2,718,633)Total 10,542 16,673,580 (19,402,755) (2,718,633)

Credit riskCredit risk within the fund is largely related to the tenants that occupy the properties that form the security for the fundsreal estate loan investments. Investments are generally structured as loans to bankruptcy remote SPV’s that own theproperties the Investments are secured against. In this context the borrower is the SPV and their resources to service thefinance provided by the fund come from the lease cashflows paid by the buildings tenants and the value of the real estateitself. Actual counterparty risk for the fund is solely related to its derivate hedging counterparties. It is the Partnership’spolicy to enter into financial instruments with a range of reputable counterparties. Therefore the Partnership does notexpect to incur material credit losses on its financial instruments.

The Partnership’s maximum exposure to credit risk (not taking into account the value of any restricted cash or othersecurity held) in the event that counterparties fail to perform their obligation as of 31 December 2010 in relation to eachclass of recognised financial assets, other than derivatives, is the carrying amount of those assets as indicated in theNotes 3 and 5

With respect to derivative financial instruments, credit risk arises from the potential failure of counterparties to meettheir obligations under the contract or arrangement.

The Partnership is not restricted from dealing with any particular counterparty or from concentrating any or all of itstransactions with one counterparty, subject to the investment restrictions in the private placement memorandum.

The investments of the Partnership have no credit ratings.

The Partnership may be adversely impacted by an increase in its credit exposure related to investing, financing, and otheractivities. The Partnership is exposed to the potential for credit-related losses that can occur as a result of an individual,counterparty or issuer being unable or unwilling to honour its contractual obligations. These credit exposures exist withinfinancing relationships, commitments, derivatives and other transactions. These exposures may arise, for example, froma decline in the financial condition of a counterparty, from entering into swap or other derivative contracts under whichcounterparties have obligations to make payments to us, from a decrease in the value of securities of third parties that thePartnership holds as collateral, or from extending credit through guarantees or other arrangements. As the Partnership’scredit exposure increases, it could have an adverse effect on the Partnership’s business and profitability if materialunexpected credit losses occur.

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Notes to the Consolidated Financial Statements (continued)

3. Risk Associated with Financial Instruments (continued)

Credit risk (continued)

Real Estate Value RiskThe fund’s investments are principally exposed to changes in the value of the underlying real estate that forms thesecurity for its investments. The value of real estate is affected by a number of different variables including generaleconomic factors such as employment, interest rates and inflation, aswell as property specific issues such as the level ofrent, tenant defaults and the supply and demand for comparable properties. The Investment Adviser analyses theappropriate amount of leverage applicable to different property types by determining the riskiness of the property and itscashflows. The amount of leverage can be expressed as the loan to value ratio (the “LTV"). This ratio compares the totalamount of debt outstanding against a property versus the market value of the property. Thus a property worth £100mmthat has £60mm of debt outstanding secured against it, has an LTV ratio of 60%. The funds’ typical investments have anLTV ratio of between 70% to 75%, with an absolute maximum of 80%.

In accordance with the Partnership’s policy, the Investment Advisor monitors the Partnership’s credit position on a dailybasis, and the Board of Directors reviews it on a quarterly basis.

Liquidity riskThe Partnership invests mainly in illiquid assets. The main liquidity requirements of the Partnership are related to anyrestricted cash requirements for its derivative hedges. The fund is a closed end fund with no ability for the investors toredeem their committed capital.

In accordance with the Partnership’s Policy, the Investment Advisor monitors the Partnership’s liquidity position on adaily basis and the Board of Directors review it on a quarterly basis.

The table below analyses the Partnership’s financial liabilities and net settled derivative financial liabilities into relevantmaturity groupings based on the remaining period at the Consolidated Statement of Financial Position date to thecontractual maturity date. The amounts in the table are the contractual undiscounted cash flows. Balances due within 12months equal their carrying balances, as the impact of discounting is not significant.

31 December 2010 Less than 1 3 Months to 1 Year -

Month 1-3 Months 1 Year 5 Years

GB£ GB£ GB£ GB£ GB£

Financial liabilities at fair value

through profit or loss - - (39,459) (278,489) (317,948)Contributions repayable (4,770,554) - - - (4,770,554)

Administration fee payable - (48,000) - - (48,000)

Advisory fee payable - (179,576) - - (179,576)Other accrued expenses (164,687) - - - (164,687)

Total financial liabilities (4,935,241) (227,576) - - (5,480,765)

Total 2010

In order to maintain a diversified portfolio the Investment Advisor calculates and monitors on a frequent basis thePartnership’s exposure to industry sectors and more general combinations of those sectors.

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Notes to the Consolidated Financial Statements (continued)

4. Fair value of financial instruments

The following table shows financial instruments recognised at fair value, analysed between those whose fair value isbased on:

Quoted prices in active markets for identical assets or liabilities (Level 1);

Those involving inputs other than quoted prices included in Level 1 that are observable for the asset or liability,either directly (as prices) or indirectly (derived from prices) (Level 2); and

Those with inputs for the asset or liability that are not based on observable market data (unobservable inputs)(Level 3).

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determinedon the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, thesignificance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement usesobservable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requiresjudgement, considering factors specific to the asset or liability.

The determination of what constitutes ‘observable’ requires significant judgement by the Partnership. The Partnershipconsiders observable data to be that market data that is readily available, regularly distributed or updated, reliable andverifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

The following table analyses within the fair value hierarchy the Partnership’s financial assets and liabilities (by class)measured at fair value at 31 December 2010.

Level 1 Level 2 Level 3 Total

GB£ GB£ GB£ GB£

Held for Trading

Commercial Mortgage Backed Securities - 12,574,216 - 12,574,216- 12,574,216 - 12,574,216

Level 1 Level 2 Level 3 Total

GB£ GB£ GB£ GB£

Held for Trading

Forward Currency Contracts - (317,948) - (317,948)- (317,948) - (317,948)

Financial liabilities at fair value through profit

or loss

Financial assets at fair value through profit or

loss

Financial Liabilities at Fair Value as at 31 December 2010

Financial Assets at Fair Value as at 31 December 2010

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Notes to the Consolidated Financial Statements (continued)

4. Fair value of financial instruments (continued)

Financial instruments that trade in markets that are not considered to be active but are valued based on quoted marketprices, dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2.These include money market funds and over-the-counter derivatives (e.g. forward foreign currency contracts). As Level2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuationsmay be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available marketinformation.

During the year there were no transfers between Level 1 and Level 2.

5. Loans and receivables

Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an activemarket are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effectiveinterest method, less any impairment. Interest income is recognised by applying the effective interest rate, except forshort term receivables when the recognition of interest would be immaterial. The foreign exchange gains on Loans areclassified within net loss on currency exchange transactions in the Consolidated Statement of Comprehensive Income.

The Partnership entered into a loan facility agreement with Solstra Investments A/S on 19 October 2010. As of 31December 2010 the amount loaned to Solstra Investments A/S was GB£16,471,835. There was a foreign exchange gainon this loan of GB£201,745 The interest on the loan is 9% per annum and the PIK interest rate was 5% per annum. Theinterest payment dates are on 15 January, 15 April, 15 July and 15 October of each year. The loan matures on the 15January 2015. The loan has full mortgage security below the senior debt and the senior swap counterparty. It also has afirst ranking share pledge on the company holding the asset.

Currently there are two Commercial mortgage backed securities held with maturities expected to be in 2013.

6. Other receivables and prepayments

The following is a breakdown of other receivables and prepayments as at 31 December 2010.

2010

GB£

Investment arrangement fee 166,736

Management Fee 214,696Directors fee 5,756

Total other receivables and prepayables 387,188

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Notes to the Consolidated Financial Statements (continued)

7. Interest income

2010

GB£

Bank interest 1,077

Interest on Loan 250,265PIK Interest on Loan 79,942

Debt securities at fair value through profit or loss:

- Held for trading 354,444

Total interest income 685,728

8. Financial assets and liabilities at fair value through profit or loss

2010

GB£

Financial assets at fair value through profit or loss

Held for trading- Debt investments 12,574,216

Total designated at fair value through profit or loss 12,574,216

Net financial assets at fair value through profit or loss 12,574,216

2010

GB£

Financial liabilities at fair value through profit or loss

Held for trading

- Derivative contracts (317,948)

Total held for trading (317,948)

Total financial liabilities at fair value through profit or loss (317,948)

Total financial assets and liabilities at fair value through profit or loss 12,256,268

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Notes to the Consolidated Financial Statements (continued)

9. Net changes in fair value on financial assets and liabilities at fair value through profit or loss

2010

GB£

Net realised gain on financial assets at fair value through profit or loss 1,083,522

Net unrealised gain on financial assets at fair value through profit or loss 670,385Net unrealised gain on foreign loan 201,745

Net unrealised loss on forward currency contracts (317,948)

Net unrealised loss on foreign currencies (117,168)

Net gain on financial assets at fair value through profit or loss 1,520,536

10. Cash and cash equivalents

2010

GB£Cash and cash equivalents comprises of the following cash balances:

Cash balance held with BNYMellon International Bank Limited 14,528,105

Cash balance held with Dexia 11,66314,539,768

11. Restricted cash2010

GBP

Restricted cash account comprises of the following balances:

Restricted cash account held with Barclays Bank plc 2,341,525

2,341,525

Restricted cash account balances represent the restricted cash deposit amounts held with the respective broker. The netbalance of cash held in the restricted cash accounts must be able to meet any restricted cash requirements. Restrictedcash requirements are dependent on derivative exposure.

12. Contributions receivable and repayable

When an additional Limited Partner is admitted to the Partnership after the Initial Closing Date and sums havepreviously been drawn down from Limited Partners on or after the Initial Closing Date but prior to the first drawdowndate in respect of the additional Limited Partner, then such additional Limited Partner will contribute to the Partnershipon its first drawdown date an amount:

(a) as being necessary to equalise (in percentage terms) the net amount drawn down from all Limited Partners aftertaking into account any amounts distributed to prior Limited Partners; plus

(b) a subscription premium (“Subscription Premium”) equal to the greater of:

(i) 10% per annum from the date of each relevant drawdown to the first drawdown date of the additional LimitedPartner, based on the amount of that additional commitment; or

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Notes to the Consolidated Financial Statements (continued)

12. Contributions receivable and repayable (continued)

(ii) the difference between the market value of the Partnership’s investments at the date of acquisition of suchinvestment and the market value of the investments at the relevant closing date, applied pro-rata to the amount of theadditional Commitment; plus

As at 31 December 2010, the amount a contributions receivable was GB£4,950,131 and contributions repayable wasGB£4,770,554

13. Fees and expenses

Administration fees

The Administrator is entitled to a fee paid out of the capital called of the Partnership. The fee will be calculated dailybased upon the Partnership’s capital called and paid monthly in arrears. The minimum monthly fee shall be GB£8,000per month, excluding out-of-pocket expenses.

The fee is charged as follows:

0.08% of the first GB£200 million of capital called;

0.06% of the next GB£150 million of capital called;0.045% of capital called in excess of GB£250 million.

The Administrator will receive a financial statement production fee of GB£5,000 per set.

Administration fees (continued)

The amount charged during the period 22 December 2009 (commencement of operations) until 31 December 2010 wasGB£98,630 of which GB£48,000 remained outstanding at 31 December 2010.

Advisory fees

During the Investment Period, the Investment Advisor has receive an Advisory Fee of no more than 2% per annum oftotal contributions, thereafter the Investment Advisor will receive no more than 2% per annum of the aggregate of drawndown contributions.

The amount charged during the period was GB£1,074,144 of which GB£179,576 remained outstanding at 31 December2010.

15. Distributions

The Partnership will make distributions of income (if any) quarterly, or more frequently at the discretion of thePartnership.

16. Exchange rates

The following exchange rates were used to translate assets and liabilities into GB£ at 31 December 2010:

Exchange Rates 2010

Euro 1.1670

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Notes to the Consolidated Financial Statements (continued)

17. Transactions with related parties

Dale Lattanzio, an employee of the Investment Advisor is also a member of the Investment Committee.

The General Partner is a related party to the Partnership

The Directors of the Cayman Company are David Bree and Ronan Guilfoyle.

The Directors of the Luxembourg Company are Peter Dickinson, Neil Ross, Geneviève Blauen-Ardendt and MarcSchmit.

The aggregate emoluments of the Directors (including expenses) for the period was GB£10,230 of which GB£Nil wasoutstanding as at 31 December 2010.

18. Contributions and Withdrawals

Contributions from prospective Investors must be for a minimum of GB£1million provided that the Partnership may, atits sole discretion, accept contributions below GB£1million.

The General Partner may call for contributions to be drawn down, when required, from Investors at any time during theInvestment Period and, in certain circumstances, thereafter with a minimum of 10 Business Days written notice.Investors will make contributions and receive distributions denominated in Pounds Sterling. Failure to meet a notice ofdrawdown in full will result in interest charges on the unpaid amount at 8% per annum. If an Investor fails to remedy thedefault within 15 Business Days after service of the notice the Partnership may sell the defaulting Investor’s shares in thePartnership or cause it to forfeit its shares in the Partnership.

The Partnership may make contributions to investment opportunities at any time following the first date of application(the “Initial Closing Date”) up to the date falling 30 months from the Initial Closing Date or such earlier date as thePartnership may determine provided that at such date at least 90% of total contributions have been invested or committedfor investment and/or used or reserved for Advisory Fees and expenses and/or reserved for Follow-On Investments. TheInvestment Period may be extended by the General Partner for a period of up to six months.

Any contributions not drawn down within the Investment Period will be cancelled except to the extent necessary: (i) topay ongoing Advisory Fees and operating expenses of the Partnership; (ii) to make investments pursuant to contractualobligations existing at the end of the Investment Period; and (iii) for Follow-On Investments (in addition to any includedin (ii)) in existing investments/debt securities up to a maximum amount of 15% of total contributions.

Once Initial Closing proceeds are deployed the Partnership will be free to distribute the Partnership’s net realised incomeand capital gains to Investors as deemed appropriate, subject to appropriate provision being made for the Partnership’sexpenses and liabilities. Tax paid or withheld by the Partnership in respect of an Investor will be deemed to have beendistributed to that Investor.

The Partnership will make distributions of income (if any) quarterly, or more frequently at the discretion of thePartnership. Capital distributions will be made as soon as reasonably practicable after receipt of the relevant cashproceeds by the Partnership.

The Partnership will terminate five years from the Initial Closing Date unless extended at the discretion of the GeneralPartner for a maximum of two years and one month by the addition of a one year period and a one year and one monthperiod.

19. Commitments and contingent liabilities

As at 31 December 2010, the Partnership did not have any significant commitments or contingent liabilities, other thanthe commitment disclosed in note 20.

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Notes to the Consolidated Financial Statements (continued)

20. Subsequent events

On 19 January 2011 a loan against an office property located in Canary Wharf was funded for GB£15,400,000. Theinterest rate on the loan is 6.5% per annum and the PIK interest rate is 6.75% per annum. The interest payment dates are15 January, 15 April, 15 July and 15 October of each year. The loan matures on 6 July 2015. There is a second rankingmortgage security on the asset and first ranking share charge on the company that owns the asset.

21. Approval

The Annual Report and Consolidated Financial Statements were approved by the directors on 27 January 2011.

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EUROPEAN REAL ESTATE DEBT FUND L.P.A Cayman Islands Limited Partnership

Independent auditor’s report

To: the General and Limited Partners of European Real Estate Debt Fund L.P.

Report on the consolidated financial statements

We have audited the accompanying consolidated financial statements 2010 which are part of the financial statements ofEuropean Real Estate Debt Fund L.P., Cayman Islands, which comprise the consolidated statement of financial position as at31 December 2010, the consolidated statements of comprehensive income, changes in equity and cash flows for the year thenended and the notes, comprising a summary of significant accounting policies and other explanatory information.

Board of Directors’ responsibilityThe Board of Directors is responsible for the preparation and fair presentation of these consolidated financial statements inaccordance with International Financial Reporting Standards as adopted by the European Union. Furthermore, the Board ofDirectors is responsible for such internal control as is necessary to enable the preparation of the consolidated financialstatements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibilityOur responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted ouraudit in accordance with the International Standards on Auditing. This requires that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidatedfinancial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks ofmaterial misstatement of the consolidated financial statements, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the company’s preparation and fair presentation of theconsolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for thepurpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors,as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion with respect to the consolidated financial statementsIn our opinion, the consolidated financial statements give a true and fair view of the financial position of European RealEstate Debt Fund L.P. as at 31 December 2010, and of its result and its cash flows for the period 22 December 2009(commencement of operations) to 31 December 2010 in accordance with International Financial Reporting Standards asadopted by the European Union.

Rotterdam, 27 January 2011PricewaterhouseCoopers Accountants N.V.

Original has been signed by F.J. van Groenestein RA

118

DEFINITIONS

The following definitions apply throughout this Prospectus unless the context otherwise requires:

‘‘Additional Partnership’’ means any further limited partnership or other investment vehiclebeing subject to substantially the same terms as the Master Fund(save in respect of any applicable tax, legal or regulatoryconsiderations), which has been, or may be, established andincluded in the Master Fund as a parallel co-investment vehicle

‘‘Administrator’’ means, in relation to the Master Fund, BNY Mellon InvestmentServices (International) Limited, and in relation to the Company,International Administration (Guernsey) Limited or such otheradministrator as may be appointed from time to time by theCompany or the Master Fund, as the context may require

‘‘Admission’’ means admission of the Ordinary Shares to be issued pursuant to theIssue to the premium listing segment of the Official List and totrading on the London Stock Exchange’s main market for listedsecurities, as the context may require

‘‘Advisory Committee’’ means an advisory committee appointed by the General Partner asdescribed in Part 4 of this document

‘‘Advisory Fee’’ means the fees charged to and received by the Investment Adviserfrom the Master Fund in relation to providing advisory, managementor other similar services

‘‘AIC’’ means the Association of Investment Companies

‘‘AIC Code’’ means the AIC’s Code of Corporate Governance, as amended fromtime to time

‘‘Application Form’’ means the application form attached to this Prospectus for use inconnection with the Offer for Subscription

‘‘Articles of Incorporation’’ or‘‘Articles’’

means the articles of incorporation of the Company in force fromtime to time

‘‘Associate’’ means a body corporate which, in relation to the body corporateconcerned, is a holding company, subsidiary of such holdingcompany, or a subsidiary of the person concerned or of suchholding company, or a person directly or indirectly controlled bythem (excluding portfolio companies)

‘‘Assumptions’’ means (i) an Issue of up to £100 million; (ii) commitments by LimitedPartners prior to the Issue of £117.4; (iii) the CMBS portfolio of theMaster Fund being valued as at 15 February 2011 (being the latestpracticable date prior to the date of this document) and (iv) theremaining Investments of the Master Fund being valued at costtogether with interest accrued

‘‘Auditors’’ means, in relation to the Master Fund, PricewaterhouseCoopersAccountants NV or, in relation to the Company,PricewaterhouseCoopers CI LLP, or such auditor (who shall besuitably qualified) as may be appointed from time to time by theCompany or the Master Fund, as the context may require

119

‘‘Available Net Proceeds’’ means an amount equal to at least 98 per cent of the gross Issueproceeds, being the gross Issue proceeds less (i) the costs andexpenses associated with the Issue, (ii) the Subscription Premiumpayable by the Company and (iii) such sum as shall be retained bythe Company in respect of its anticipated working capitalrequirements, but after adding back the Investment AdviserContribution (if any)

‘‘Board’’ or‘‘Board of Directors’’

means the board of directors of the Company

‘‘Business Day’’ means any day (other than a Saturday, Sunday or public holiday)when banks are open for business in the Cayman Islands, Guernsey,London and Luxembourg

‘‘Capita Registrars’’ a trading name of Capita Registrars Limited

‘‘Carried Interest’’ means any sums payable to the Special Limited Investor pursuant tothe Distribution Waterfall, as described in sub-paragraphs (c) and (d)of Part 4, paragraph 6.

‘‘Cayman Company’’ means European Real Estate Debt Fund (Cayman) Limited, alimited company registered in the Cayman Islands, which is a whollyowned subsidiary of the Master Fund

‘‘Cayman CompanyAdministration Agreement’’

means the agreement dated 22 December 2009 between the CaymanCompany and the Administrator, a summary of which is contained inparagraph 2.3 of Part 10 of this document

‘‘Cayman Company CashCustodian Agreement’’

means the cash custodian agreement dated 22 December 2009between the Cayman Company and the Custodian, details of whichare set out in paragraph 2.5 of Part 10 of this Prospectus

‘‘certificated’’ or‘‘in certificated form’’

means certificated form, that is not in CREST

‘‘City Code’’ means the City Code on Takeovers and Mergers

‘‘CMBS’’ means commercial mortgage backed securities

‘‘Co-Sponsor’’ means Durum L.P., an exempt limited partnership incorporated inthe Cayman Islands, being a co-investment vehicle of Duet Groupand Forum Partners

‘‘Commitment’’ means the commitments given by the Company and the Master Fundpursuant to the Commitment Letter

‘‘Commitment Letter’’ means the letter dated 18 February 2011 between the Company andthe Master Fund, a summary of which is contained in paragraph 8.3of Part 9 of this document

‘‘Company’’ means Duet Real Estate Finance Limited

‘‘Company AdministrationAgreement’’

means the administration agreement dated 18 February 2011between the Company and the Administrator, details of which areset out in paragraph 8.6 of Part 9 of this document

‘‘Company Investment AdvisoryAgreement’’

means the investment advisory agreement dated 18 February 2011between the Company and the Investment Adviser, details of whichare set out in paragraph 8.5 of Part 9 of this document

‘‘Company Receiving Agent’’ Capita Registrars

‘‘Company Receiving AgentServices Agreement’’

means the receiving agent services agreement dated 18 February2011 between the Company and the Company Receiving Agent,details of which are set out in paragraph 8.8 Part 9 of this document

‘‘Company Registrar’’ Capita Registrars (Guernsey) Limited

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‘‘Company Share RegistrationServices Agreement’’

means the share registration services agreement dated 18 February2011 between the Company and the Company Registrar, details ofwhich are set out in paragraph 8.7 Part 9 of this document

‘‘CREST’’ means the computerised settlement system operated by EuroclearUK and Ireland Limited which facilitates the transfer of title toshares in uncertificated form

‘‘Custodian’’ means BNY Mellon International Bank Limited or such other thirdparty custodian appointed by the Master Fund

‘‘Debt Strategy’’ means the debt strategy of the Master Fund as set out in paragraph 2of Part 4 of this document

‘‘Deed of Adherence’’ means a deed of adherence pursuant to which a person agrees to bebound by the terms of the Limited Partnership Agreement as aLimited Partner

‘‘Director’’ means a director of the Company from time to time

‘‘Duet Group’’ means Duet Holdings S.A. and its Associates

‘‘Disclosure and TransparencyRules’’

means the disclosure and transparency rules made by the FSA underPart VI of FSMA

‘‘Distribution Waterfall’’ means the distribution waterfall of the Master Fund as summarised inparagraph 6 of Part 4 of this document and paragraph 2.1 of Part 10of this document

‘‘DPEL’’ means Duet Private Equity Limited

‘‘Euros’’ means the currency of the member states of the EU that haveadopted the single currency in accordance with the Treatyestablishing the European Community (signed in Rome 1957) asamended by the Treaty of European Union (signed in Maastricht on7 February 1993)

‘‘Final Closing Date’’ means the last date upon which a Limited Partner:

(a) is admitted to the Master Fund or any of the AdditionalPartnerships; or

(b) increases its commitment to the Master Fund or any of theAdditional Partnerships,

which date in any event shall not be later than 22 June 2011 or (i)such later date being no later than 60 days after such date if theGeneral Partner considers such extension is necessary to admit up totwo additional Limited Partners in such period; or (ii) such later dateas may be agreed between the General Partner and the LimitedPartners by consent of Limited Partners holding more than75 per cent of the value of the Master Fund

‘‘Follow-On Investments’’ means Investments made by the Master Fund which are intended topreserve, protect or enhance the value of the existing Investments bythe Master Fund and/or which are being sold by the seller of anexisting Investment (or an Associate of such person)

‘‘Forum Partners’’ means Forum Partners Investment Management LLC

‘‘FRI’’ means full repairing and insuring

‘‘FSA’’ or ‘‘Financial ServicesAuthority’’

means the Financial Services Authority of the United Kingdom in itscapacity as the competent authority for the purposes of FSMA

‘‘FSMA’’ means the Financial Services and Markets Act 2000 of the UnitedKingdom, as amended

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‘‘General Partner’’ means European Real Estate Debt Fund (GP) Limited, a limitedcompany incorporated in the Cayman Islands in its capacity asgeneral partner of the Master Fund

‘‘GFSC’’ means the Guernsey Financial Services Commission

‘‘Gross IRR’’ means the IRR before the deduction of fees, expenses anddistributions to investors in the Master Fund pursuant to theDistribution Waterfall

‘‘Guernsey Companies Law’’ means the Companies (Guernsey) Law, 2008 (as amended)

‘‘ICR’’ means the interest cover ratio, being the ratio of rental income lessany unrecoverable operating costs to interest payable under therelevant finance documents

‘‘IFRS’’ means the International Financial Reporting Standards (includingInternational Accounting Standards)

‘‘Initial Closing Date’’ means 22 December 2009

‘‘Interest’’ means an interest of a Limited Partner in the Master Fund

‘‘Investment Adviser’’ means DPEL, being the investment adviser to the Company and theMaster Fund, as the context may require, or other such company asmay be appointed as investment adviser from time to time

‘‘Investment AdviserContribution’’

means the sum payable (if any) by the Investment Adviser to theCompany under the Investment Adviser Contribution Agreement

‘‘Investment AdviserContribution Agreement’’

means the agreement dated 18 February 2011 between theInvestment Adviser and the Company, details of which are set outin paragraph 8.2 of Part 9 of this document

‘‘Investment Committee’’ means a committee established by the General Partner to review, onbehalf of Limited Partners, proposed investments within definedparameters and to decide whether the Investment Adviser’srecommendation of acquisitions or disposals of Investments can besubmitted to the Cayman Company and then the LuxembourgCompany for consideration

‘‘Investment Company Act’’ the United States Investment Company Act of 1940, as amended

‘‘Investment Period’’ means the period in which the Master Fund may make commitmentsto investment opportunities as described in paragraph 9 of Part 4

‘‘Investments’’ means any investments of whatsoever nature made by the MasterFund

‘‘IRR’’ means the internal rate of return, a (positive) annual discount ratewhich, when applied to the subscriptions and distribution cashflowsbetween the Limited Partners and the Master Fund and discountedannually, produces a net present value of those cashflows equal tozero

‘‘Issue’’ means the issue of Ordinary Shares pursuant to the Placing and theOffer for Subscription

‘‘Key Individual’’ means Dale Lattanzio or any other person or persons that during theInvestment Period the General Partner may elect, with LimitedPartners’ special consent or the Advisory Committee may elect to actas a replacement for the Key Individual

‘‘Limited Partner’’ each person that has been accepted by the General Partner andwhich has been admitted as a limited partner of the Master Fund andwhich following Admission will include the Company

‘‘Limited PartnershipAgreement’’

means the limited partnership agreement relating to the Master Funddated 22 December 2009 (as amended on 18 February 2011)

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‘‘Listing Rules’’ means the listing rules made by the UK Listing Authority undersection 73A of FSMA

‘‘London Stock Exchange’’ means London Stock Exchange plc

‘‘LTV’’ means loan to value

‘‘Luxembourg Company’’ means European Real Estate Debt S.a.r.L., a limited companyregistered in Luxembourg, which is a wholly owned indirectsubsidiary of the Master Fund

‘‘Luxembourg CompanyCustodian Agreement’’

means the custodian agreement dated 22 December 2009 betweenthe Luxembourg Company and the Custodian, details of which areset out in paragraph 2.6 of Part 10 of this Prospectus

‘‘Management Investor’’ means Execs Investment LLP, a limited liability partnershipincorporated in England

‘‘Master Fund’’ means European Real Estate Debt Fund L.P., an exempted limitedpartnership registered in the Cayman Islands

‘‘Master Fund AdministrationAgreement’’

means the administration agreement dated 22 December 2009between the Master Fund and the Administrator, details of whichare set out in paragraph 2.2 of Part 10 of this document

‘‘Master Fund Agreements’’ means the agreements constituting the Master Fund and anyadditional vehicles which make up the Master Fund, as amendedand restated from time to time

‘‘Master Fund Cash CustodianAgreement’’

means the cash custodian agreement dated 22 December 2009between the Master Fund and the Custodian, details of which are setout in paragraph 2.4 of Part 10 of this Prospectus

‘‘Master Fund InvestmentAdvisory Agreement’’

means the investment advisory agreement dated 11 December 2009(as amended on 18 February 2011) between the Master Fund and theInvestment Adviser, details of which are set out in paragraph 2.7 ofPart 10 of this Prospectus

‘‘Master Fund Target Size’’ means £300 million or such higher amount as the General Partnermay determine

‘‘Memorandum’’ means the memorandum of incorporation of the Company in forcefrom time to time

‘‘Minimum Net Proceeds’’ means £25 million

‘‘NAV’’ or ‘‘Net Asset Value’’ means the value of the assets of the Company less its liabilities asdetermined in accordance with the procedure set out in paragraph 9of Part 1 of this Prospectus in the paragraph entitled ‘‘NAVPublication and Valuation’’

‘‘Offer for Subscription’’ or‘‘Offer’’

means the offer for subscription to the public in the UK of theOrdinary Shares on the terms set out in this Prospectus

‘‘Offer Price’’ means 100 pence per Ordinary Share

‘‘Official List’’ means the official list of the UK Listing Authority

‘‘Ordinary Shares’’ means ordinary shares of no par value each in the Company

‘‘Panel’’ means the Panel on Takeovers and Mergers

‘‘Placing’’ means the placing of Ordinary Shares pursuant to the PlacingAgreement, details of which are set out in paragraph 6 of Part 9 ofthis Prospectus

‘‘Placing Agreement’’ means the placing agreement dated 18 February 2011 between theCompany, the Placing Agent, the Investment Adviser and theDirectors, details of which are set out in paragraph 8 of Part 9 of thisProspectus

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‘‘Pound Sterling’’ means the lawful currency of the United Kingdom

‘‘Preferred Return’’ means an amount representing a return equal to 8 per cent perannum calculated on a daily basis on the amount of a LimitedPartner’s commitment, compounded annually from the draw downdate for the relevant commitment until repayment, together withinterest on any unpaid amounts of Preferred Return which shallaccrue at the rate of 8 per cent per annum (calculated daily andcompounded) until paid

‘‘Principals’’ means Dale Lattanzio, Rob Clayton and Cyrus Korat

‘‘Prospectus’’ means this document, which constitutes a prospectus relating to theCompany in accordance with the Prospectus Rules

‘‘Prospectus Rules’’ means the rules made for the purposes of Part VI of FSMA inrelation to offers of securities to the public and admission ofsecurities to trading on a regulated market

‘‘Quarter Month’’ means March, June, September and December

‘‘Realised Investments’’ means Investments which have been realised

‘‘Regulated InformationService’’

means a regulated information service approved by the FSA and onthe list of Regulatory Information Services maintained by the FSA

‘‘Securities Act’’ means the United States Securities Act of 1933 (as amended)

‘‘Seed Investor’’ means Forum European Realty Income III, L.P., further details inrelation to which are set out in Part 6 of this Prospectus

‘‘Shareholders’’ means holders of Ordinary Shares in the capital of the Company

‘‘Special Limited Investor’’ means European Real Estate Debt Fund (SLI) L.P., an exemptedlimited partnership registered in the Cayman Islands that is entitledto the Carried Interest of the Master Fund under the Master FundAgreements

‘‘Sponsor’’ or ‘‘Placing Agent’’ means Oriel Securities Limited

‘‘Subscription Premium’’ means the premium to be paid by a Limited Partner who is admittedto the Master Fund after the Initial Closing Date in addition to andby reference to the amount it has agreed to invest in the Master Fundas calculated in accordance with the Limited Partnership Agreementas detailed in paragraph 2.1 of Part 10 of this document

‘‘UK Corporate GovernanceCode’’

means the UK Corporate Governance Code published in June 2010by the Financial Reporting Council

‘‘UK Listing Authority’’ means the FSA acting in its capacity as the competent authority forthe purposes of Part VI of FSMA

‘‘United Kingdom’’ or ‘‘UK’’ means the United Kingdom of Great Britain and Northern Ireland

‘‘US’’ or ‘‘United States’’ means the United States of America, its states, territories andpossessions, including the District of Columbia

‘‘Valuation Date’’ means the last Business Day of each Quarter Month (or such otherday as the Directors may determine)

‘‘VAT’’ means value added tax

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TERMS AND CONDITIONS OF APPLICATIONS UNDERTHE PLACING

In these terms and conditions, which apply to the Placing:

‘‘EEA States’’ means the states which comprise the European Economic Area;

‘‘Money Laundering Regulations’’ means the Criminal Justice (Proceeds of Crime) (Bailiwick ofGuernsey), 1999 (as amended) and the regulations made thereunder;

‘‘Regulation S’’ means Regulation S under the Securities Act;

‘‘Rule 144A’’ means Rule 144A of the Securities Act; and

‘‘US Person’’ means a ‘‘US Person’’ as defined in Regulation S of the Securities Act.

Save where the context otherwise requires, words and expressions defined in the Prospectus of whichthese terms and conditions form part have the same meanings where they are used in these terms andconditions.

The terms and conditions

These terms and conditions apply to persons making an offer to subscribe for Ordinary Shares under thePlacing (which may include the Placing Agent or its nominee(s)).

Each person to whom these conditions apply, as described above, who confirms its agreement to thePlacing Agent to subscribe for Ordinary Shares (an ‘‘Investor’’) hereby agrees with the Placing Agentand the Company to be bound by these terms and conditions as being the terms and conditions uponwhich Ordinary Shares will be subscribed under the Placing. An Investor shall, without limitation,become so bound if the Placing Agent confirms to the Investor its allocation.

Agreement to purchase Ordinary Shares

Conditional on (i) Admission occurring on or prior to 8.00 a.m. (London Time) on 14 March 2011 (orsuch later time and/or date as the Placing Agent and the Company may agree (not being later than14 April 2011)) and (ii) the Placing Agreement becoming unconditional in all respects (save forconditions relating to Admission) and not having been terminated in accordance with its terms beforeAdmission and (iii) not less than the Minimum Net Proceeds (or such lesser number as the Company andthe Placing Agent may agree) being subscribed for pursuant to the Issue, an Investor agrees to subscribefor, as more particularly described below, at the Offer Price, the number of Ordinary Shares allocated tosuch Investor under the Placing in accordance with the arrangements described in these terms andconditions. To the fullest extent permitted by law, each Investor acknowledges and agrees that it will notbe entitled to exercise any remedy of rescission at any time. This does not affect any other rights suchInvestor may have.

The Placing Agent is entitled under the Placing Agreement to retain agents and may pay commission inrespect of the Placing to any or all of those agents out of its own resources.

Applications under the Placing must be for a minimum subscription amount of £50,000 or such loweramount as the Placing Agent and the Company may agree (in their sole discretion).

Payment for Ordinary Shares

Each Investor undertakes to pay the Offer Price for the Ordinary Shares issued to such Investor in suchmanner as shall be directed by the Placing Agent.

In the event of any failure by any Investor to pay as so directed by the Placing Agent, the relevantInvestor shall be deemed hereby to have appointed the Placing Agent or any nominee of the PlacingAgent as its agent to use its reasonable endeavours to sell (in one or more transactions) any or all of theOrdinary Shares in respect of which payment shall not have been made as directed by the Placing Agentand to indemnify the Placing Agent and its respective affiliates on demand in respect of any liability forstamp duty and/or stamp duty reserve tax or any other liability whatsoever arising in respect of any suchsale or sales. A sale of all or any of such Ordinary Shares shall not release the relevant Investor from theobligation to make such payment for Ordinary Shares to the extent that the Placing Agent or its nomineehave failed to sell such Ordinary Shares at a consideration which, after deduction of the expenses of suchsale and payment of stamp duty and/or stamp duty reserve tax as aforementioned, at least equals theOffer Price per Ordinary Share.

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Representations and warranties

By receiving this Prospectus and making the confirmation in the paragraph above entitled ‘‘The termsand conditions’’ each Investor who confirms its agreement to subscribe for Ordinary Shares confirms,represents, warrants and undertakes to the Placing Agent and the Company on the terms and subject tothe conditions set out in this Prospectus:

. that the exercise by the Placing Agent of any rights or discretion under the Placing Agreement shallbe within the absolute discretion of the Placing Agent and the Placing Agent need not have anyreference to the Investor and shall have no responsibility or liability to the Investor whatsoever inconnection with any decision to exercise or not to exercise any such right. Each Investor agrees thatthey have no rights against the Placing Agent or any of its affiliates, the Company and any of itsrespective directors and employees under the Placing Agreement pursuant to the Contracts (Rightsof Third Parties) Act 1999;

. that, in agreeing to subscribe for Ordinary Shares under the Placing, each Investor is relying on thisProspectus only, and not on any other information or representation or warranty concerning theCompany, any of its shares or the Placing (provided that nothing in these terms and conditions shallexclude the liability of any person for fraudulent misrepresentation);

. that the Investor and, as the case may be, its clients, acknowledge that the Placing Agent has noduties or responsibilities to the Investor similar or comparable to the duties of ‘‘best execution’’ and‘‘suitability’’ imposed by the Conduct of Business Sourcebook contained in the Financial ServicesAuthority’s Handbook of Rules and Guidance and that the Placing Agent is not acting for theInvestor or its clients and that the Placing Agent will not be responsible to the Investor or its clientsfor providing the protections afforded to their respective customers;

. that, save in the event of fraud on the part of the Placing Agent (and to the extent permitted by therules of the Financial Services Authority), neither the Placing Agent, its holding companies nor anydirect or indirect subsidiary undertakings of such holding company, nor any of their respectivedirectors, members, partners, officers and employees, shall be responsible or liable to the Investoror any of its clients for any matter arising out of the Placing Agent’s role as sponsor and bookrunneror otherwise in connection with the Placing and that where any such responsibility or liabilitynevertheless arises as a matter of law the Investor and, if relevant, its clients, will immediately waiveany claim against any of such persons which the Investor or any of its clients may have in respectthereof;

. that, in the case of a person who confirms to the Placing Agent on behalf of an Investor anagreement to subscribe for and/or purchase (as applicable) Ordinary Shares, that person representsand warrants that he has the authority to do so on behalf of the relevant Investor and that:

– in connection with its participation in the Placing it has observed all relevant legislation andregulations, in particular (but without limitation) those relating to money laundering and thatits application is only made on the basis that it accepts full responsibility for any requirementto verify the identity of its clients and other persons in respect of whom it has applied. Inaddition, it warrants that it is a person: (i) subject to the Money Laundering Regulations 2007in force in the United Kingdom; or (ii) subject to the Money Laundering Directive (2005/60/EC of the European Parliament and of the EC Council of 26 October 2005 on the preventionof the use of the financial system for the purpose of money laundering and terrorist financing);or (iii) subject to the Guernsey AML Requirements; or (vi) acting in the course of a businessin relation to which an overseas regulatory authority exercises regulatory functions and isbased or incorporated in, or formed under the law of, a county in which there are in forceprovisions at least equivalent to those required by the Money Laundering Directive;

. that they are aware of, have complied with and will at all times comply with their obligations inconnection with money laundering under the United Kingdom Proceeds of Crime Act 2002;

. that they are not and are not applying as nominee or agent for a person who is, or may be,mentioned in any of the sections 67, 70, 93 or 96 of the United Kingdom Finance Act 1986(depositary receipts and clearance services);

. that the Investor is entitled to subscribe for the Ordinary Shares in its allocation under the laws ofall relevant jurisdictions which apply to such Investor and that such Investor has fully observed suchlaws, obtained all governmental and other consents which may be required thereunder or otherwiseand complied with all necessary formalities; and

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. that the Investor, if in the UK, is a person of a kind described in paragraph 5 of Article 19 orparagraph 2 of Article 49 of the Financial Services and Markets Act 2000 (Financial Promotion)Order 2005.

Supply and disclosure of information

If the Company, the Placing Agent or any of their respective agents request any information about anInvestor or its agreement to subscribe for Ordinary Shares, such Investor must promptly disclose it tothem.

Miscellaneous

The rights and remedies of the Placing Agent and the Company under these terms and conditions are inaddition to any rights and remedies which would otherwise be available to each of them and the exerciseor partial exercise of one will not prevent the exercise of others.

To the fullest extent permitted by law and applicable FSA rules, neither (i) the Placing Agent, (ii) anydirector, officer, employee or consultant of the Placing Agent, or (iii) to the extent not contained within(i) or (ii), any person connected with the Placing Agent as defined in the FSA rules, shall have anyliability to investors or to any person other than the Company in respect of the Placing.

On application, each Investor may be asked to disclose, in writing or orally, to the Placing Agent:

. if he is an individual, his nationality; or

. if it is a discretionary fund manager, the jurisdiction in which the funds are managed or owned.

All documents will be sent at the Investor’s risk. They may be sent by post to such Investor at an addressnotified to the Placing Agent.

Each Investor agrees to be bound by the Company’s Articles of Incorporation (as amended from time totime) once the Ordinary Shares which such Investor has agreed to subscribe for have been issued to suchInvestor.

The contract to subscribe for Ordinary Shares and the appointments and authorities mentioned hereinwill be governed by, and construed in accordance with, the laws of England and Wales. For the exclusivebenefit of the Placing Agent and the Company, each Investor irrevocably submits to the exclusivejurisdiction of the English courts in respect of the matters referred to in these terms and conditions. Thisdoes not prevent an action being taken against an Investor in any other jurisdiction.

In the case of a joint agreement to subscribe for Ordinary Shares, references to an Investor in these termsand conditions are to each such Investor and the Investors’ liability is joint and several.

Monies received from applicants pursuant to the Placing will be held in accordance with the terms andconditions of the Placing Agreement until such time as the Placing Agreement becomes unconditional inall respects. If the Placing Agreement does not become unconditional in all respects by 14 April 2011,application monies will be returned without interest at the risk of the applicant.

Selling restrictions

Sales outside the United States to Non-US Persons

Each purchaser of the Ordinary Shares offered in reliance on Regulation S will be deemed to representand agree as follows:

. it and any person, if any, for whose account it is acquiring the Ordinary Shares, is not a US Person(as defined in Regulation S) or to a person known by us to be a US Person and is purchasing theOrdinary Shares outside the United States in an offshore transaction meeting the requirements ofRegulation S (including, for the avoidance of doubt, a bona fide sale on a market of the LondonStock Exchange for listed securities), and the transaction was not pre-arranged with a buyer in theUnited States or a US Person;

. it is not in any jurisdiction in which it is unlawful to make or accept an offer to acquire the OrdinaryShares;

. it is aware that the Ordinary Shares have not been and will not be registered under the SecuritiesAct and are being offered outside the United States in reliance on Regulation S;

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. it is not acquiring the Ordinary Shares with a view to the offer, sale, resale, transfer, delivery ordistribution, directly or indirectly, of any such Ordinary Shares into the United States or anyjurisdiction referred to above;

. it has received, carefully read and understands this Prospectus, and has not distributed, forwarded,transferred or otherwise transmitted this Prospectus or any other presentation or offering materialsconcerning the Ordinary Shares to any persons within the United States or to any US Persons, norwill it do any of the foregoing;

. that the Company and the Placing Agent, their affiliates and others, will rely upon the truth andaccuracy of the foregoing acknowledgements, representations or agreements made by it, if itbecomes aware that the foregoing acknowledgements, representations or agreements are no longeraccurate or have not been complied with, it will immediately notify the Company and, if it isacquiring any Ordinary Shares as a fiduciary or agent for one or more accounts, it represents that ithas sole investment discretion with respect to each such account and that it has full power to makesuch foregoing acknowledgements, representations and agreements on behalf of each such account.

In addition, until 40 days after commencement of the Placing, an offer or sale of the Ordinary Shareswithin the United States by a dealer (whether or not participating in the Placing) may violate theregistration requirements of the Securities Act if such offer or sale is made otherwise than in accordancewith Rule 144A or pursuant to another exemption from registration under the Securities Act.

Prospective investors are hereby notified that sellers of Ordinary Shares may be relying on the exemptionfrom the provisions of Section 5 of the Securities Act provided by Rule 144A or another exemption from,or transaction not subject to, the registration requirements of the Securities Act.

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TERMS AND CONDITIONS OF APPLICATIONS UNDER THEOFFER FOR SUBSCRIPTION

If you apply for the Ordinary Shares under the Offer for Subscription, you will be agreeing with theCompany and Capita Registrars Limited to be bound by the terms and conditions set out below.

In the case of a joint application, references to you in these terms and conditions are to each of you, andyour liability is joint and several. Please ensure you read these terms and conditions in full beforecompleting the Application Form.

In these terms and conditions, which apply to the Offer for Subscription:

‘‘Applicant’’ means a person or persons (in the case of joint applicants) whose name(s) appear(s) on theregistration details of an Application Form;

‘‘Application’’ means the offer made by an Applicant by completing an Application Form and posting (ordelivering it by hand during normal business hours only) it to Capita Registrars at Corporate Actions,The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, as specified in the Prospectus;

‘‘Money Laundering Directive’’ means the Money Laundering Directive (2005/60/EC of the EuropeanParliament and of the EC Council of 26 October 2005 on the prevention of the use of the financial systemfor the purpose of money laundering and terrorist financing);

‘‘Money Laundering Regulations’’ means the Criminal Justice (Proceeds of Crime) (Bailiwick ofGuernsey) Law, 1999 (as amended) and the regulations made thereunder or the Money LaunderingDirective, or the Money Laundering Regulations 2007 in force in the United Kingdom (as the case maybe);

‘‘Prospectus’’ means the prospectus dated 18 February 2011 published by the Company;

‘‘Receiving Agent’’ means Capita Registrars; and

‘‘Registrar’’ means Capita Registrars (Guernsey) Limited.

Save where the context otherwise requires, words and expressions defined in the Prospectus have thesame meanings when used in these terms and conditions and in the Application Form and explanatorynotes in relation thereto.

The terms and conditions

The contract created by the acceptance of an Application under the Offer for Subscription will beconditional on:

. Admission occurring on or before 8.00 a.m. (London time) on 14 March 2011 (or such time and/ordate as the Company and the Placing Agent may agree, being not later than 14 April 2011);

. the Placing Agreement becoming otherwise unconditional in all respects (save for conditionsrelating to Admission) and not having been terminated in accordance with its terms beforeAdmission; and

. not less than the Minimum Net Proceeds (or such lesser number as the Company and the PlacingAgent may agree) being subscribed for pursuant to the Issue.

The right is reserved by the Company to present all cheques and banker’s drafts for payment on receiptand to retain Application monies and refrain from delivering an Applicant’s Ordinary Shares intoCREST, pending clearance of the successful Applicant’s cheques and banker’s drafts. The Company alsoreserves the right to reject in whole or part, or to scale down or limit, any Application. The Company maytreat Applications as valid and binding if made in accordance with the prescribed instructions and theCompany may, at its discretion, accept an Application in respect of which payment is not received by theCompany prior to the closing of the Offer for Subscription. If any Application is not accepted in full or ifany contract created by acceptance does not become unconditional, the Application monies or, as thecase may be, the balance thereof will be returned (without interest) by returning each relevantApplicant’s cheque or banker’s draft or by crossed cheque in favour of the first Applicant, through thepost at the risk of the person(s) entitled thereto. In the meantime, Application monies will be retained bythe Receiving Agent in a separate account.

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The Directors (acting together) reserve the right, subject to the prior approval of the Placing Agent, tobring forward or to postpone the closing time and date for the Offer for Subscription by up to two weeksif they conclude that this is in the best interests of the Company and/or Shareholders as a whole.

To ensure compliance with the Money Laundering Regulations, the Receiving Agent may require, at itsabsolute discretion, verification of the identity of the person by whom, or on whose behalf, an ApplicationForm is lodged with payment. If the Application Form is submitted by a UK regulated broker orintermediary acting as agent, and which is itself subject to the Money Laundering Regulations, anyverification of identity requirements are the responsibility of such broker or intermediary and not of theReceiving Agent.

The person lodging the Application Form with payment, and in accordance with the other terms asdescribed above, including any person who appears to the Receiving Agent to be acting on behalf of someother person, shall apply under the Offer for Subscription in respect of such number of offered OrdinaryShares as is referred to therein and shall thereby be deemed to agree to provide the Receiving Agent withsuch information and other evidence as the Receiving Agent may require to satisfy the verification ofidentity requirements.

If the Receiving Agent determines that the verification of identity requirements apply to any Application,the relevant Ordinary Shares (notwithstanding any other term of the Offer for Subscription) will not beissued to the relevant Applicant unless and until the verification of identity requirements have beensatisfied in respect of that Applicant or Application. The Receiving Agent is entitled, in its absolutediscretion, to determine whether the verification of identity requirements apply to any Applicant orApplication and whether such requirements have been satisfied, and neither the Receiving Agent nor theCompany will be liable to any person for any loss or damage suffered or incurred (or alleged), directly orindirectly, as a result of the exercise of such discretion.

If the verification of identity requirements apply, failure to provide the necessary evidence of identitywithin a reasonable time may result in delays in the despatch of share certificates or in crediting CRESTaccounts. If, within a reasonable time following a request for verification of identity, the Receiving Agenthas not received evidence satisfactory to it as aforesaid, the Company may, with the agreement of thePlacing Agent, treat the relevant Application as invalid, in which event the monies payable will bereturned (at the Applicant’s risk) without interest.

Submission of an Application Form with the appropriate remittance will constitute a warranty to each ofthe Company and the Receiving Agent from the Applicant that the Money Laundering Regulations willnot be breached by application of such remittance. The verification of identity requirements will notusually apply:

(a) if the Applicant is an organisation required to comply with the Money Laundering Directive; or

(b) if the Applicant is a regulated United Kingdom broker or intermediary acting as agent and is itselfsubject to the Money Laundering Regulations; or

(c) if the Applicant (not being an Applicant who delivers his Application in person) makes payment byway of a cheque drawn on an account in the Applicant’s name; or

(d) if the aggregate subscription price for the offered Ordinary Shares is less than £10,000.

In other cases, the verification of identity requirements may apply. Satisfaction of these requirements maybe facilitated in the following ways:

(a) if payment is made by cheque or banker’s draft in pounds sterling drawn on a branch in the UnitedKingdom or the Channel Islands which is either a Settlement Member of the Cheque and CreditCleaning Company Limited or the CHAPS Cleaning Company Limited and which bears a UK banksort code number in the top right hand corner the following applies. Cheques should be madepayable to Capita Registrars Limited re: Duet Real Estate Finance Limited and crossed A/C payeeonly. Third party cheques or banker’s drafts will not be accepted with the exception of buildingsociety cheques or banker’s drafts where the building society or bank has confirmed the name of theaccount holder by stamping or endorsing the building society cheque/banker’s draft to such effect.However, third party cheques may be subject to the Money Laundering Regulations which woulddelay Shareholders receiving their Ordinary Shares. The account name should be the same as thatshown on the Application Form; or

(b) if the Application Form is lodged with payment by an agent which is an organisation required tocomply with the Money Laundering Directive or which is subject to anti-money laundering

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regulations in a country which is a member of the Financial Action Task Force (the non-EuropeanUnion members of which are Argentina, Australia, Brazil, Canada, China, Gibraltar, Hong Kong,Iceland, Japan, Mexico, New Zealand, Norway, Russian Federation, Singapore, South Africa,Switzerland, Turkey, UK Crown Dependencies and the US and, by virtue of their membership ofthe Gulf Cooperation Council, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United ArabEmirates), the agent should provide with the Application Form written confirmation that it has thatstatus and a written assurance that it has obtained and recorded evidence of the identity of theperson for whom it acts and that it will, on demand, make such evidence available to the ReceivingAgent. If the agent is not such an organisation, it should contact Capita Registrars at CorporateActions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU.

To confirm the acceptability of any written assurance referred to in (b) above, or in any other case, theApplicant should telephone the Shareholder Helpline on 0871 664 0321 (calls to the 0871 664 0321number are charged at 10 pence per minute (including VAT) from a BT landline, other networkproviders’ costs may vary) or +4420 8639 3399 if calling from outside the UK. Calls to the helpline fromoutside the UK will be charged at applicable international rates. Lines are open 9.00 a.m. to 5.00 p.m.(London time) Monday to Friday. Different charges may apply to calls made from mobile telephones andcalls may be recorded and randomly monitored for security and training purposes. The helpline cannotprovide advice on the merits of the Placing and Offer for Subscription nor give any financial, legal or taxadvice.

If the Application Form(s) is/are in respect of Ordinary Shares is/are lodged by hand by the Applicant inperson, he or she should ensure that he or she has with him or her evidence of identity bearing his or herphotograph (for example, his or her passport) and separate evidence of his or her address. If, within areasonable period of time following a request for verification of identity, and in any case by 1.00 p.m. on7 March 2011, the Receiving Agent has not received evidence satisfactory to it as aforesaid, the ReceivingAgent may, at its discretion, as agent of the Company, reject the relevant Application, in which event themonies submitted in respect of that Application will be returned without interest to the account at thedrawee bank from which such monies were originally debited (without prejudice to the rights of theCompany to undertake proceedings to recover monies in respect of the loss suffered by it as a result ofthe failure to produce satisfactory evidence as aforesaid).

All payments must be made by cheque or banker’s draft in pounds sterling drawn on a branch in theUnited Kingdom or the Channel Islands of a bank or a building society which is either a settlementmember of the Cheque and Credit Clearing Company Limited or the CHAPS Clearing Company Limitedor which has arranged for its cheques and banker’s drafts to be cleared through the facilities provided bythose companies or committees and must bear the appropriate sort code in the top right hand corner.Cheques, which must be drawn on the personal account of the individual Applicant where they have soleor joint title to the funds, should be made payable to Capita Registrars Limited re: Duet Real EstateFinance Limited. Third party cheques or banker’s drafts will not be accepted with the exception ofbuilding society cheques or bankers’ drafts where the building society or bank has confirmed the name ofthe account holder by stamping or endorsing the building society cheque/banker’s draft to such effect.Cheques should be for the full amount payable on Application. Post dated cheques and payment viaCHAPS, BACS or electronic transfer will not be accepted.

The account name should be the same as that shown on the Application.

The following is provided by way of guidance to reduce the likelihood of difficulties, delays and potentialrejection of an Application Form (but without limiting the Receiving Agent’s right to require verificationof identity as indicated above):

(a) Applicants should make payment by a cheque drawn on an account in their own name and writetheir name and address on the back of the banker’s draft or cheque and, in the case of an individual,record his date of birth against his name; banker’s drafts should be duly endorsed by the bank orbuilding society on the reverse of the cheque as described above; and

(b) if an Applicant makes the Application as agent for one or more persons, he or she should indicateon the Application Form whether he or she is a UK or EU regulated person or institution (forexample, a bank or stockbroker) and specify his or her status. If an Applicant is not a UK or EUregulated person or institution, he or she should contact the Receiving Agent.

By completing and delivering an Application Form, you, as the Applicant (and, if you sign theApplication Form on behalf of somebody else or a corporation, that person or corporation, except asreferred to in paragraph (viii) below):

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(i) offer to subscribe for the number of Ordinary Shares specified in your Application Form (or suchlesser number for which your Application is accepted) on the terms of and subject to the Prospectus,including these terms and conditions, and subject to the Memorandum and Articles ofIncorporation of the Company;

(ii) agree that, in consideration of the Company agreeing to process your Application, your Applicationcannot be revoked after 1.00 p.m. on 7 March 2011 (or such later time and date as the Directors maydetermine if they may postpone the closing of the Offer for Subscription in accordance with theProspectus) and that this paragraph shall constitute a collateral contract between you and theCompany which will become binding upon despatch by post to, or (in the case of delivery by handduring normal business hours only) on receipt by, the Receiving Agent of your Application Form;

(iii) agree and warrant that your cheque or banker’s draft may be presented for payment on receipt andwill be honoured on first presentation and agree that, if it is not so honoured, you will not be entitledto receive the Ordinary Shares until you make payment in cleared funds for the Ordinary Sharesand such payment is accepted by the Company in its absolute discretion (which acceptance shall beon the basis that you indemnify it, the Receiving Agent and the Registrar against all costs, damages,losses, expenses and liabilities arising out of or in connection with the failure of your remittance tobe honoured on first presentation) and you agree that, at any time prior to the unconditionalacceptance by the Company of such late payment, the Company may (without prejudice to its otherrights) avoid the agreement to subscribe such Ordinary Shares and may issue or allot such OrdinaryShares to some other person, in which case you will not be entitled to any payment in respect ofsuch Ordinary Shares other than the refund to you at your risk of the proceeds (if any) of thecheque or banker’s draft accompanying your Application, without interest;

(iv) agree that (a) any monies returnable to you may be retained pending clearance of your remittanceand the completion of any verification of identity required by the Money Laundering Regulations;and (b) monies pending allocation will be retained in a separate account and that such monies willnot bear interest;

(v) undertake to provide satisfactory evidence of your identity within such reasonable time (in eachcase to be determined in the absolute discretion of the Company and the Receiving Agent) toensure compliance with the Money Laundering Regulations;

(vi) agree that, in respect of those Ordinary Shares for which your Application has been received and isnot rejected, acceptance of your Application shall be constituted, at the election of the Company,either (a) by notification to the UK Listing Authority and the London Stock Exchange of the basisof allocation (in which case acceptance shall be on that basis) or (b) by notification of acceptancethereof to the Receiving Agent;

(vii) authorise the Receiving Agent and/or Registrar to procure that your name (together with thename(s) of any other joint Applicant(s)) is/are placed on the register of members of the Company inGuernsey in respect of such Ordinary Shares and to send a crossed cheque for any moniesreturnable by post without interest, at the risk of the persons entitled thereto, to the address of theperson (or in the case of joint holders, the first-named person) named as an Applicant in theApplication Form;

(viii) warrant that, if you sign the Application Form on behalf of somebody else or on behalf of acorporation, you have due authority to do so on behalf of that other person or corporation, and suchperson or corporation will also be bound accordingly and will be deemed also to have given theconfirmations, warranties and undertakings contained herein and undertake to enclose your powerof attorney or a copy thereof duly certified by a solicitor or bank with the Application Form;

(ix) agree that all Applications, acceptances of Applications and contracts resulting therefrom shall begoverned by and construed in accordance with Guernsey law, and that you submit to the jurisdictionof the Guernsey Courts and agree that nothing shall limit the right of the Company to bring anyaction, suit or proceeding arising out of or in connection with any such Applications, acceptances ofApplications and contracts in any other manner permitted by law or in any court of competentjurisdiction;

(x) confirm that, in making such Application, neither you nor any person on whose behalf you areapplying are relying on any information or representation in relation to the Company other than theinformation contained in the Prospectus and, accordingly, you agree that no person (responsible

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solely or jointly for the Prospectus or any part thereof or involved in the preparation thereof) shallhave any liability for any such information or representation;

(xi) irrevocably authorise the Company or any person authorised by it, to do all things necessary toeffect registration of any Ordinary Shares subscribed by or issued to you into your name(s) or intothe name(s) of any person(s) in whose favour the entitlement to any such Ordinary Shares has beentransferred and authorise any representative of the Company to execute any document requiredtherefor;

(xii) agree that, having had the opportunity to read the Prospectus, you shall be deemed to have hadnotice of all information and representations concerning the Company and the Ordinary Sharescontained therein;

(xiii) confirm that you have reviewed the restrictions contained in these terms and conditions;

(xiv) warrant that, if you are an individual, you are not under the age of 18;

(xv) agree that all documents, cheques and banker’s drafts sent by post to, by or on behalf of theCompany or the Receiving Agent, will be sent at the risk of the person(s) entitled thereto;

(xvi) warrant that, in connection with your Application, you have observed the laws of all relevantterritories, obtained any requisite governmental or other consents, complied with all requisiteformalities and paid any issue or transfer or other taxes due in connection with your Application inany territory and that you have not taken any action which will or may result in the Company actingin breach of the regulatory or legal requirements of any territory in connection with the Offer forSubscription or your Application;

(xvii) save where you have satisfied the Company that an appropriate exemption applies so as to permityou to subscribe, represent and agree that you are not (a) a US Person (meaning any person who isa US Person within the meaning of Regulation S adopted under the United States Securities Act of1933 (as amended)) and are not acting on behalf of a US Person, that you are not purchasing with aview to resale in the US or to or for the account of a US Person and that you are not an employeebenefit plan as defied in section 3(3) of the United States Employee Retirement Income SecurityAct 1974 (‘‘ERISA’’) (whether or not subject to the provisions of Title 1 of ERISA) or an individualretirement account as defined in section 408 of the US Internal Revenue Code or (b) a resident ofCanada, Australia or Japan; and

(xviii) agree, on request by the Company, the Receiving Agent or Registrar on behalf of the Company, todisclose promptly in writing to the Company, the Receiving Agent or the Registrar any informationwhich the Company, the Receiving Agent or the Registrar may reasonably request in connectionwith your Application and authorise the Company, or the Receiving Agent or Registrar on behalf ofthe Company, to disclose any information relating to your Application as it considers appropriate.

No person receiving a copy of this Prospectus and/or an Application Form in any territory other than theUK may treat the same as constituting an invitation or an offer to him or her; nor should he or she in anyevent use an Application Form unless in the relevant territory such an invitation or offer could lawfullybe made to him or her or the Application Form could lawfully be used without contravention of any legalor regulatory requirements. It is the responsibility of any person outside the UK wishing to apply forOrdinary Shares under the Offer for Subscription to satisfy himself as to full observance of the laws ofany relevant territory in connection with any such Application, including obtaining any requisitegovernmental or other consents, observing any other formalities requiring to be observed in any suchterritory and paying any issue, transfer or other taxes required to be paid in any such territory.

The Ordinary Shares have not been and will not be registered under the Securities Act or with anysecurities regulatory authority of any State or other jurisdiction of the United States and, subject tocertain exceptions, may not be offered or sold within the United States or to, or for the account or benefitof, US Persons. The Company has not been and will not be registered as an ‘‘investment company’’ underthe Investment Company Act, and investors will not be entitled to the benefits of that Act. In addition,relevant clearances have not been, and will not be, obtained from the Securities Commission of anyprovince of Canada, Australia or Japan and, accordingly, unless an exemption under any relevantlegislation or regulations is applicable, none of the Ordinary Shares may be offered, sold, renounced,transferred or delivered, directly or indirectly, in Canada, Australia or Japan. Unless the Company hasexpressly agreed otherwise in writing, you represent and warrant to the Company that you are not aUS Person or a resident of Canada, Australia or Japan and that you are not subscribing for such OrdinaryShares for the account of any US Person or resident of Canada, Australia or Japan and that you will not

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offer, sell, renounce, transfer or deliver, directly or indirectly, Ordinary Shares subscribed for by you inthe United States, Canada, Australia or Japan or to any US Person or resident of Canada, Australia orJapan. Subject to certain exceptions, no Application will be accepted if it bears an address in the UnitedStates, Canada, Australia or Japan unless an appropriate exemption is available as referred to above.

Pursuant to the Data Protection (Bailwick of Guernsey) Law, 2001 (as amended), the Company and/orthe Registrar may hold personal data relating to past and present Shareholders. Such personal data heldis used by the Registrar to maintain the Company’s register of Shareholders and mailing lists and this mayinclude sharing such data with third parties in one or more of the countries mentioned below when (a)effecting the payment of dividends to Shareholders and the payment of commissions to third parties and(b) filing returns of Shareholders and their respective transactions in Ordinary Shares with statutorybodies and regulatory authorities. Personal data may be retained on record for a period exceeding sixyears after it is no longer used.

The countries referred to above include, but need not be limited to, those in the European EconomicArea and any of their respective dependent territories overseas, Argentina, Australia, Brazil, Canada,Hong Kong, Hungary, Japan, New Zealand, Singapore, South Africa, Switzerland and the United States.

By becoming registered as a holder of Ordinary Shares in the Company, a person becomes a data subjectand is deemed to have consented to the processing by the Company or the Registrar of any personal datarelating to them in the manner described above.

The basis of allocation is as the Placing Agent and the Company may agree (in their sole discretion). Theright is reserved to reject in whole or in part and/or scale down and/or ballot any Application or any partthereof. The right is reserved to treat as valid any Application not in all respects completed in accordancewith the instructions relating to the Application Form, including if the accompanying cheque or banker’sdraft is for the wrong amount.

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NOTES ON HOW TO COMPLETE THE APPLICATION FORM

Applications should be returned so as to be received by Capita Registrars at Corporate Actions, TheRegistry, 34 Beckenham Road, Beckenham, Kent BR3 4TU no later than 1.00 p.m. on 7 March 2011.

HELP DESK: If you have a query concerning the completion of this Application Form, please telephoneCapita Registrars between 9.00 a.m. and 5.00 p.m. (London time) Monday to Friday on 0871 664 0321from within the UK or +4420 8639 3399 if calling from outside the UK. Calls to the 0871 664 0321 numberare charged at 10 pence per minute (including VAT) from a BT landline (other network providers’ costsmay vary). Calls to the helpline from outside the UK will be charged at applicable international rates.Different charges may apply to calls from mobile telephones and calls may be recorded and randomlymonitored for security and training purposes. The helpline cannot provide advice on the merits of thePlacing or Offer for Subscription nor give any financial, legal or tax advice.

1. Application

Fill in (in figures) in Box 1 the amount of money being subscribed for the Ordinary Shares. The amountbeing subscribed must be for a minimum of £5,000 and thereafter in multiples of £1,000. Financialintermediaries who are investing on behalf of clients should make separate Applications for each client.

2A. Holder details

Fill in (in block capitals) the full name(s) and addresses of each holder and the address of the first namedholder. Applications may only be made by persons aged 18 or over. In the case of joint holders only thefirst named may bear a designation reference. A maximum of four joint holders is permitted.

2B. CREST

If you wish your Ordinary Shares to be deposited in a CREST account in the name of the holders given insection 2A, enter in section 2B the details of that CREST account. Where it is requested that OrdinaryShares be deposited into a CREST Account, please note that payment for such Ordinary Shares must bemade prior to the day such Ordinary Shares might be allotted and issued. It is not possible for anApplicant to request that Ordinary Shares be deposited in their CREST account on an against paymentbasis. Any Application Form received containing such a request will be rejected.

3. Signature

All holders named in section 2A must sign section 3 and insert the date. The Application Form may besigned by another person on behalf of each holder if that person is duly authorised to do so under a powerof attorney. The original power of attorney (or a copy duly certified by a solicitor or a bank) must beenclosed for inspection (which will be returned by post at the Applicant’s risk). A corporation should signunder the hand of a duly authorised official whose representative capacity should be stated and a copy ofa notice issued by the corporation authorising such person to sign should accompany the ApplicationForm.

4. Reliable introducer declaration

Guernsey money laundering legislation allows the Receiving Agent, in certain circumstances and uponmeeting certain criteria, to meet its obligations in respect of customer due diligence procedures by relyingupon an reliable introducer to have applied appropriate identification procedures. This provision, whileproviding for an efficient process by eliminating the need to duplicate the identification process andcopying of documentation, does require adherence to a formal process.

Criteria/Capacity of the introducer

Guernsey legal requirements dictate that in order for the Receiving Agent to be able to rely upon reliableintroducer then that introducer must be regulated in an equivalent jurisdiction as detailed in part 4 of theapplication form, and acting in a capacity of either:

(a) deposit-taking business,

(b) collective investment fund functionary,

(c) investment business or fund services business,

(d) insurance business.

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Confirmation of this is achieved by the completion of section 4 of the Application form.

Customer information profile

It is necessary for the Receiving Agent to obtain a customer information profile on the underlyinginvestor; this is achieved by the completion of section 4 of the Application Form.

The above will provide the Receiving Agent with the required information in order to rely on the reliableintroducer process. However, in certain circumstances it may be necessary for the Receiving Agent torequire additional information.

No third party information chain

The certification process is only allowed where the reliable introducer actually holds the customer duediligence information/documentation and the reliable introducer is not relying upon another party to holdthe customer due diligence information.

If the declaration cannot be completed, and in the event that the subscription is being made by anindividual, corporation, trust or designated body, in accordance with internationally recognised standardsfor the prevention of money laundering, the documents listed below must be provided with the completedApplication Form. Notwithstanding that the declaration has been completed and signed, the Registrarreserves the right to request of you the identity documents listed below and/or to seek verification ofidentity of each holder and payor (if necessary) from you or their bankers or from another reputableinstitution, agency or professional adviser in the applicable country of residence. If satisfactory evidenceof identity has not been obtained within a reasonable time your Application may be rejected or revoked.Where certified copies of documents are requested below, such copy documents should be certified by asenior signatory of a firm which is either a governmental approved bank, stockbroker or investment firm,financial services firm or an established law firm or accountancy firm which is itself subject to regulation inthe conduct of its business in its own country of operation and the name of the firm should be clearlyidentified on each document certified.

5. Contact details

To ensure the efficient and timely processing of your Application Form, please provide contact details ofa person the Registrar or the Receiving Agent may contact with all enquiries concerning yourApplication. Ordinarily this contact person should be the person signing in section 3 on behalf of the firstnamed holder. If no details are entered here and the Registrar or the Receiving Agent requires furtherinformation, any delay in obtaining that additional information may result in your Application beingrejected or revoked.

6A. AML documentation required for individual Applicants

In order to invest, we require the following: Tick box

1. A fully completed Application. &2. All money to be invested must be from the Applicant’s own bank account by way of a

cheque or banker’s draft. We require details of the bank account, including a/c numberand name, and bank name, address and contact name.

&

3. If introduced through a Reliable Introducer, the Reliable Introducer Certificate in Part 4completed by your introducer.

&

Either

4.1 Reliable Introducer Certificate fully completed by your introducer. &Or

4.2 Notarised or certified copy of the Applicant’s passport/driver’s licence or other form ofgovernment issued identity with photograph included, and

&

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4.3 Recent (no more than 3 months old) utility bill in the Applicant’s name (original, notarised orcertified) identifying the current residential address.

6B. AML documentation required for corporations (quoted on a recognised stock exchange)

In order to invest, we require the following: Tick box

1. A fully completed Application. &2. All money to be invested must be from the Applicant’s own bank account by way of a

cheque or banker’s draft. We require details of the bank account, including a/c numberand name, and bank name, address and contact name.

&

3. If introduced through a Reliable Introducer, the Reliable Introducer Certificate in Part 4completed by your introducer.

&

4. A properly authorised mandate of the Directors to open/operate an account or establishthe business relationship.

&

5. A list of authorised signatories. &Either

6.1 Reliable Introducer Certificate fully completed by your introducer. &Or

6.2 The original or notarised copy of the Certificate of Incorporation or the Certificate toTrade (copies may alternatively be certified), and

&

6.3 A list of Directors’ names, occupations, residential and business addresses and dates ofbirth.

&

6C. AML documentation required for corporations, partnerships and limited liability companies (unlessthe company is quoted on a recognised stock exchange)

In order to invest, we will require the following: Tick box

1. A fully completed Application &2. All money to be invested must be from the Applicant’s own bank account by way of a

cheque or banker’s draft. We require details of the bank account, including a/c numberand name, and bank name, address and contact name.

&

3. Minutes, resolutions or declaration confirming the power to invest and approving theinvestment in the Company.

&

4. A list of authorised signatories. &5. If introduced through a Reliable Introducer, the Reliable Introducer Certificate in Part 4

completed by your introducer.&

Either

6.1 Reliable Introducer Certificate fully completed by your introducer. &Or

6.2 Notarised or certified copy of, or original Certificate of Incorporation/ partnershipagreement (if any) or other agreement establishing the unincorporated business, and anyChange of Name Certificate,

&

6.3 Notarised or certified copy of, or original Memorandum and Articles of Incorporation (ifapplicable),

&

6.4 In respect of 2 directors, or partners, and anyone authorised as a signatory for thistransaction, as well as all beneficial owners of the Applicant (more than 10 per cent), thefollowing:

&

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(i) Notarised or certified copy of passport/driver’s licence or other form ofgovernment issued identity with photograph included,

&

(ii) Recent (no more than 3 months old) utility bill in your name (original, notarisedor certified) identifying the current residential address, and

&

(iii) Specimen signatures. &6.5 Certificate of Good Standing from relevant company registrar, or equivalent document,

may be required, and&

6.6 If other corporate entities own more than 25 per cent each of the Applicant, theinformation as per 6.2 to 6.4 must be given for these entities.

&

6D. AML documentation required for trusts

In order to invest, we require the following: Tick Box

1. A fully completed Application. &2. All money to be invested must be from the Applicant’s own bank account by way of a

cheque or banker’s draft. We require details of the bank account, including a/c numberand name, and bank name, address and contact name.

&

Either

3.1 If introduced through a Reliable Introducer, the Reliable Introducer Certificate in Part 4completed by your introducer.

&

Or

3.2 Notarised or certified copy of, or original Trust Deeds, and &3.3 In respect of the Trustees (if individuals — corporate Trustees should also provide all

information required for a corporation), beneficiaries or anyone else who is the object ofa power (e.g. a Protector) and are authorised to sign for this Application, the following:

(i) Notarised or certified copy of passport/driver’s licence or other form ofgovernment issued identity with photograph included,

&

(ii) Recent (no more than 3 months old) utility bill in your name (original, notarisedor certified) identifying the current residential address, and

&

(iii) Specimen signatures. &6E. AML documentation required for designated bodies

If investing as a principal, but not deemed a ‘‘Designated Body’’, then the Applicantmust supply the same information as requested for a Corporate Entity (see 6B above). Ifinvesting on a nominee basis, but not deemed a ‘‘Designated Body’’, the Registrar willdeal with each case on an individual basis, to satisfy its obligations.

A ‘‘Designated Body’’ (‘‘DB’’) means, in the context of this Application, a financialinstitution that is regulated in an equivalent jurisdiction as listed in Appendix C of theGuernsey Financial Services Commission’s Handbook for Financial Services Businesseson Countering Financial Crime and Terrorist Financing (the ‘‘Handbook’’).

(i) In the case of a DB acting as principal, the following must be provided: Tick box

1. A fully completed Application. &All money to be invested must be from the Applicant’s own bank account by way of acheque or banker’s draft. We require details of the bank account, including a/c numberand name, and bank name, address and contact name.

&

2. Confirmation that the DB is a ‘‘Designated Body’’, to include confirmation ofmembership or association with appropriate regulatory body.

&

3. Membership/Registered Number and contact name at regulatory body. &4. Confirmation that the DB is investing and is allowed to invest as principal for its own

account.&

5. Authorised signatories list. &

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(ii) In the case of a DB acting as Nominee, the following must be provided: Tick box

1. A fully completed Application. &All money to be invested must be from the Applicant’s own bank account by way of acheque or banker’s draft. We require details of the bank account, including a/c numberand name, and bank name, address and contact name.

2. Confirmation that the DB is a ‘‘Designated Body’’, to include confirmation ofmembership or association with appropriate regulatory body.

&

3. Membership/Registered Number and contact name at regulatory body. &4. Written confirmation that the DB will provide, within a reasonable time-frame, copies of

its due diligence information on the underlying client(s) should the information berequired by the Registrar.

&

5. Authorised signatories list. &

Cheque payment details

Payment must be made by either cheque or banker’s draft and must accompany your Application. Allpayments by cheque or banker’s draft must accompany your Application Form and be for the exactamount inserted in section 1 of your Application Form. Your cheque or banker’s draft must be madepayable to Capita Registrars Limited re: Duet Real Estate Finance Limited and crossed ‘‘A/C PayeeOnly’’. If you use a building society cheque you should ensure that the bank or building society issuingthe payment enters the name, address and account number of the person whose account is being debitedon the reverse of the cheque and adds its stamp. Cheques should be drawn on the personal account towhich you have sole or joint title to the funds. Your cheque must be drawn in pounds sterling on anaccount at a bank branch in the United Kingdom or the Channel Islands which is either a settlementmember of the Cheque and Credit Clearing Company Limited or the CHAPS Clearing Company Limitedor which has arranged for its cheques to be cleared through the facilities provided by any of thosecompanies or committees and must bear a United Kingdom bank sort code number in the top right handcorner. Third party cheques will not be accepted with the exception of building society cheques where thebank or building society has confirmed the name of the account holder by stamping and endorsing thecheque to such effect. Your payment must relate solely to this Application. The account name must bethe same as the applicant. No receipt will be issued.

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DUET REAL ESTATE FINANCE LIMITED

APPLICATION FORM

Please send this completed form by post or by hand (during normal business hours only) to CapitaRegistrars, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, so as tobe received no later than 1.00 p.m. on 7 March 2011.

1. APPLICATION

I/We the person(s) detailed in section 2A belowoffer to subscribe the amount shown in Box 1 forOrdinary shares subject to the Terms andConditions set out in the Prospectus dated18 February 2011 and subject to theMemorandum and Articles of Incorporation ofthe Company.

Box 1:(Minimum of £5,000 and in multiples of £1,000thereafter)

2A. DETAILS OF HOLDER(S) IN WHOSE NAME(S) SHARES WILL BE ISSUED(BLOCK CAPITALS)

Mr. Mrs., Miss or Title Forenames (in full)

Surname/Company Name

Address (in full)

Postcode

Designation (if any)

Mr. Mrs., Miss or Title Forenames (in full)

Surname/Company Name

Mr. Mrs., Miss or Title Forenames (in full)

Surname/Company Name

Mr. Mrs., Miss or Title Forenames (in full)

Surname/Company Name

2B. CREST DETAILS

(Only complete this section if Ordinary Shares allotted are to be deposited in a CREST account,which must be in the same name as the holder(s) given in section 2A).

CREST Participant ID: .............................................. CREST Member ID: ..................................................

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3. SIGNATURE(S) ALL HOLDERS MUST SIGN

First holder signature: Second holder signature:

Name (Print) Name (Print)

Third holder signature: Fourth holder signature:

Name (Print) Name (Print)

Dated:.................................................................... 2011

4. RELIABLE INTRODUCER DECLARATION

Completion and signing of this declaration by a suitable person or institution may avoid presentationbeing requested of the identity documents detailed in section 6 of the notes on how to complete theApplication Form.

The declaration below may only be signed by a person or institution (such as a governmental approvedbank, stockbroker or investment firm, financial services firm or an established law firm or accountancyfirm) (the ‘‘firm’’) which is itself subject in its own country to operation of ‘‘know your customer’’ andanti-money laundering regulations no less stringent than those which prevail in Guernsey. Acceptablecountries include Australia, Austria, Belgium, Canada, Cyprus, Denmark, Finland, France, Germany,Gibraltar, Greece, Hong Kong, Iceland, Ireland, Isle of Man, Italy, Japan, Jersey, Luxembourg, Malta,Netherlands, New Zealand, Norway, Portugal, Singapore, South Africa, Spain, Sweden, Switzerland, theUnited Kingdom and the United States of America.

DECLARATION: To the Company and the Receiving Agent

With reference to the holder(s) detailed in section 2A, all persons signing at section 3 (collectively the‘‘subjects’’) WE HEREBY DECLARE:

We confirm that the information provided accurately reflects the customer due diligence information thatwe hold.

We confirm that the introduced customer has an established relationship with us.

We confirm that we have identified and verified the identity of the underlying customer/introduced customer(and any beneficial owners and controllers) and recorded the evidence of identity according to proceduresestablished and maintained by us.

We confirm that our customer due diligence procedures and record keeping procedures are consistent withthe standards established in the Financial Action Task Force’s Forty Recommendations and Nine SpecialRecommendations.

We consent to the Receiving Agent relying on our performance of these procedures.

We agree to provide other relevant customer due diligence information and copies of documentationestablishing evidence of identity of the underlying customer/introduced customer (and any beneficialowners and controllers) upon request and without delay; we undertake to use best efforts to do so within 5working days of the request.

We agree to notify the Receiving Agent of material changes to the information provided in this certificate.

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Applicant’s name (in full)

Applicant identification information

Applicant address

Postcode Country

Type of entity

Relationship information

Purpose/intended nature of business relationship

Type, volume and value of activity expected

Source of funds

Source of wealth

Details of any known existing relationships with the relevant person

Name of regulator, if applicable

Additional information:

. Ownership and control, including underlying companies

. Nature of activities and geographical sphere

. Classes of beneficiaries (for trusts only)

Risk factors

Risk factors identified (provide details)

Is the investor or Applicant associated with aPEP?

(yes/no)

Are commission/consultancy fees a source ofwealth?

(yes/no)

Is the investor of Applicant connected with a highrisk jurisdiction?

(yes/no)

Is the Applicant part of a complex corporate ortrust structure?

(yes/no)

Is the Applicant involved in trading?

(yes/no)

Does the Applicant have any bearer shares inissue?

(yes/no)

The above information is given in strict confidence for your own use only and without any guarantee,responsibility or liability on the part of this firm or its officials.

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Signed..........................................................................................................................................................................

Name ...........................................................................................................................................................................

........................................................................................................................... having authority to bind the firm

Name of regulatory authority..................................................................................................................................

Firm’s licence number ..............................................................................................................................................

Website address or telephone number of regulatory ..........................................................................................

STAMP of firm giving full name and business address ......................................................................................

5. CONTACT DETAILS

To ensure the efficient and timely processing of this Application please enter below the contact details ofa person the Registrar or the Receiving Agent may contact with all enquiries concerning this application.Ordinarily this contact person should be the person signing in section 3 on behalf of the first namedholder. If no details are entered here and the Registrar or the Receiving Agent requires furtherinformation, any delay in obtaining that additional information may result in your application beingrejected or revoked.

Contact name............................................................... Email address...............................................................

Contact address .........................................................................................................................................................

........................................................................................ Postcode........................................................................

Telephone No .............................................................. Fax No ..........................................................................

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RF64872 Printed by Royle Financial Print

Oriel Securities LimitedSole Sponsor, Financial Adviser and Bookrunner

Prospectus 18 February 2011

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