INVESTMENT MANAGER SUMMARY - Retirement · INVESTMENT MANAGER SUMMARY MANAGEMENT Firm Name Heitman...

14

Item No. 14: Annual Presentation by Heitman Real Estate Securities, LLC – Active Global Real Estate Securities Manager (August 21, 2019, Special Retirement Board Meeting)

INVESTMENT MANAGER SUMMARY

MANAGEMENT Firm Name Heitman Real Estate Securities, LLC Manager Tenure with Fund 6.0 Years Investment Strategy/Vehicle Global Real Estate Securities Contract Expiration 9/30/2019

ASSETS Total Firm AUM $ 44.0 Billion Total Firm Assets in Strategy $ 1.0 Billion

Total Assets Managed for the Plan RP - $ 26.6 Million HP - $ 6.6 Million

As of 06/30/2019

PERFORMANCE

As of 06/30/2019 1-Year 3-Year 5-Year ITD¹ Heitman Global RE Securities (gross) 9.59% 5.84% 6.23% 7.26% Heitman Global RE Securities (est. net) 8.91% 5.18% 5.58% 6.60% FTSE EPRA/NAREIT Developed Index 8.64% 5.45% 5.79% 6.63% Difference (net) 0.27% -0.27% -0.21% -0.03%

¹ Inception to date 10/31/2013

FEES

Current Fee 0.625% Flat Rate

WATCH STATUS Placed on performance watch on June 26, 2019.

PREVIOUSLY DISCLOSED LITIGATION N/A

Presentation for:

Water and Power Employees’ Retirement PlanAugust 21, 2019

Please see appendix for important disclaimers and other important information.In addition, please note that this presentation does not constitute (i) an offer to sell, or the solicitation of an offer to buy, any interests in any investment vehicle, or (ii) a solicitation for any investment advisory or asset management services of Heitman or any of its affiliates. Any such offer or solicitation, if made, will only be made by means of a placement memorandum (in the case of an investment vehicle) or a proposed investment advisory agreement (in the case of advisory or asset management services). Further, this presentation is subject to correction, completion and amendment without notice.

Table of Contents

2Table of Contents

Heitman Overview 3

Investment Process & Discipline 7

Market Overview 11

Performance Review 15

Portfolio Review & Characteristics 23

Conclusion 29

APPENDICES

− Fee Schedule 31− Glossary of Investment Terms 33− Biographies 35− Performance Notes & Disclaimer 37

Jerry EhlingerMANAGING DIRECTOR, PUBLIC REAL ESTATE EQUITY – NORTH AMERICAT: +1.312.425.0790 • [email protected]

John MancusoSENIOR VICE PRESIDENT, CLIENT SERVICE & MARKETING – NORTH AMERICAT: +1.312.912.6672 • [email protected]

Heitman is a Real Estate Specialist

As of June 30, 2019

3

50+ years investing on behalf of clients with an exclusive focus on real estate

$44.0 billion managed across three complementary business units

37 partners from across the Heitman platform own 100% of the company

CHICAGO

LOS ANGELES

LONDON

FRANKFURT

LUXEMBOURG

MUNICH

HONG KONG

MELBOURNE

SEOUL

TOKYO10

Offices

330Employees

$34.8BPRIVATE EQUITY

$3.1BPRIVATE DEBT

$6.1BPUBLIC EQUITY

Heitman Overview

Client Relationships Built on Trust and Experience

AUM of $44.0 billion as of June 30, 2019Heitman selected clients for inclusion in this list to indicate the scope of clients served using the following criteria: category, geographic location, size, investment style and name recognition. Only clients who have consented to their name appearing on this list have been included, however, their inclusion is not construed to be approval or disapproval of Heitman or its advisory services.1. Other clients include: Individual, Endowment/Foundation, Union/Taft-Hartley, Insurance, Fund of Funds, Mutual Fund and Sovereign

Wealth Funds2. Corporate includes sub-advised and model-only portfolios

4

62%

Public

$27,383

30%

Corporate²

$13,157

8%

Other¹

$3,465

TOTAL AUM BY CLIENT TYPE

78%

North America

$34,223

6%

Europe

$2,758

16%

Asia-Pac

$7,024

TOTAL AUM BY CLIENT DOMICILE

REPRESENTATIVE CLIENT LIST

ATP Real Estate

BT Investment Solutions (Australia)

California State Teachers’ Retirement System

Exelon Corporation

HI Asset Management Co., Ltd

L3 Technologies

National Pension Service (South Korea)

Navy Exchange Service Command Retirement Trust

New York State Common Retirement Fund

Nomura Asset Management Co., Ltd.

Ohio Public Employees Retirement System

Pennsylvania State Employees’ Retirement System

Producer-Writers Guild of America

Sompo Japan Nipponkoa Asset Management Co., Ltd.

State Board of Administration of Florida

State of Wisconsin Investment Board

Stichting Instituut Gak

Syntrus Achmea

Sunsuper (Australia)

Teacher Retirement System of Texas

Teachers' Retirement System of the State of Illinois

The Korean Teachers’ Credit Union

Tokio Marine Asset Management Co., Ltd.

Heitman Overview

Global

Benchmarked

Securities

17%

Prime

54%

Regional

Benchmarked

Securities

29%

Heitman Real Estate SecuritiesKey Differentiators

Information Advantage− 20 member global investment team made up of

country and sector specialists with 15 average

years of experience

− $38B global private platform

Unique Approach to Risk Management− Risk management process neutralizes unintended

factor exposure

− Stock selection drives alpha

Client Alignment− Employee ownership

− Compensation structure

5Heitman Overview

As of June 30, 2019From Thomson Reuters Lipper Awards, ©2017 Thomson Reuters. All rights reserved. Used by permission and protected by the Copyright Laws of the United States. The printing, copying, redistribution, or retransmission of this Content without express written permission is prohibited.

$6.1 Billion Assets Under Management

Heitman’s Global Public Equity Team

6Heitman Overview

As of June 30, 20191. Jerry Ehlinger was with Heitman’s Public Securities group from 2000 to 2004; he rejoined in 2013 as Managing Director & Portfolio Manager of the North America team.2. John White began his relationship in 2007 as a Portfolio Manager at Challenger Financial Services Group, Heitman’s former strategic partner covering Asia-Pacific

Jerry Ehlinger, CFA¹Senior Managing Director

Firm Tenure

Years Experience9

24

REGIONALINVESTMENT TEAM

Jerry Ehlinger, CFA¹SENIOR MANAGING DIRECTOR

Jeff Yurk, CFAPORTFOLIO MANAGER

Charles Harbin, CFAPORTFOLIO MANAGER

Mat SpencerPORTFOLIO MANAGER

Gabriel HilmoeSENIOR ANALYST

John Minor, CFA ANALYST

Mark ZaharaHEAD TRADER

Vicky Madison TRADER

15

17

9

17

4

8

3

15

1

8

19

19

John White²SENIOR MANAGING DIRECTOR

Karena FungPORTFOLIO MANAGER

Jason Lai, CFAPORTFOLIO MANAGER

Jeff Mak, CFAASSISTANT PORTFOLIO MANAGER

Yasuko FukudaSENIOR ASSOCIATE

Philip HunterTRADER

Jacques PerdrixSENIOR VICE PRESIDENT,

PORTFOLIO MANAGER

Andreas WelterSENIOR VICE PRESIDENT,

PORTFOLIO MANAGER

Jacques PerdrixPORTFOLIO MANAGER

Andreas WelterPORTFOLIO MANAGER

Fabien VaccaroSENIOR ANALYST

Peter BurdettTRADER

6

17

10

17

6

21

8

17

1

17

2

15

9

24

12

28

EUROPE ASIA-PACIFICNORTH AMERICA STRATEGY

Mike Moran, CFASENIOR VICE PRESIDENT,

GLOBAL INVESTMENT STRATEGIST

13

15GLOBAL INVESTMENT COMMITTEE

<1

63

12

ANALYTICS

Shruti WaghraySVP, GLOBAL INVESTMENT ANALYST

Will LouxAVP, PORTFOLIO ANALYST

Hima PandyaREPORTING & CLIENT SERVICE LEAD,

GLOBAL INVESTMENT ANALYST

Tony VoSR. ASSOCIATE, QUANT ANALYST

Diane LehmannPORTFOLIO COORDINATOR

1

8

OPERATIONSBill Pogorelec

DIRECTOR OF OPERATIONS

David RadziwonMANAGER

Colleen CallahanSENIOR TRADING ADMINISTRATOR

Paul Wilson TRADING

ADMINISTRATOR

Michael ServialRECONCILIATION

ASSOCIATE

24

26

2

10

3

24

3

7

2

13

6

17

10

17

6

18

11

14

7

7

4

7

25

25

1

14

Philosophy & Process

As of June 30, 2019

7Investment Process & Discipline

$37.9 billion private global portfolio

Experienced and local securities teams

Private real estate expertise

Public market acumen

Sophisticated portfolio

construction & risk management

Top quartileperformance

Over the long term, underlying real estate

and management’s ability to affect value

drive share prices

Short-term pricing inefficiencies create alpha opportunities

Pillars of Portfolio Construction

8

Company Analysis

Macro Analysis

Active Risk Management

Fundamental Research

Investment Process & Discipline

Summary of WPERP’s Investment GuidelinesPORTFOLIO GUIDELINES:

1. Global securities with minimum market capitalizations of $200mm at purchase, restricted to those listed on major local-country stock exchanges.

Investible markets are those within the FTSE EPRA/NAREIT Developed Index

2. Non-currency derivatives within the portfolio are not permissible without the expressed written consent of the Plan

3. Currency hedging maximum of 25% of the portfolio

4. Minimum of 50 issues quoted in at least 10 countries/regions. The maximum size of any single issue shall be the greater of 5% of the portfolio or 125% of

the benchmark weight, if the issue represents more than 5% of the benchmark. No issue purchased in the portfolio if more than 10% of outstanding share

of that company are held by Heitman in the total of all accounts

5. Cash equivalent should not normally exceed 5% of the portfolio

6. Turnover shall not normally exceed 150% in any twelve month period

7. Cannot purchase letter or restricted stock, naked options or future contracts, and uncovered short positions or commodities. Use of any derivative

instruments for speculation is prohibited

8. Rule 144A international equity instruments with registration rights are permissible up to 10% of the lesser of cost or market value of any single international

equity portfolio

9. Ineligible for cross transactions

PORTFOLIO CHARACTERISTICS:

1. Invested in broad array of countries within the FTSE EPRA/NAREIT Developed Index

2. Weighted average dividend yield on a quarterly basis to be within a +/- 0.5x range of the market as represented by the FTSE EPRA/NAREIT Developed

Index

3. Market sensitivity (beta) to be no less than 0.80 and no greater than 1.20 of the market as represented by the FTSE EPRA/NAREIT Developed Index on a 24-

month rolling basis, using monthly holdings data

PERFORMANCE OBJECTIVES:

− On an annual basis, Heitman is expected to outperform the FTSE EPRA/NAREIT Developed Index, net of fees, to be measured over a market cycle of three-to-

five years

COMPLIANCE:

− As of June 30, 2019, Heitman is in compliance with the guidelines for the accounts

9Investment Process & Discipline

GLOBAL INVESTMENT OUTLOOK

Macro Economy

− Global growth is expected to continue, but at a slower pace

− Political uncertainties continue to add to market uncertainty,

along with concerns about the US-China trade war

Capital Markets

− Sentiment has improved following the strong market recovery

to start the year

− M&A activity is expected to continue given we are in the later

stages of the market cycle

Real Estate Markets

− Economic growth should lead to slow but steady job growth

that will drive demand for commercial real estate

− New supply remains in check in most areas given risk aversion

and lack of funding due to tighter regulations on banks

Global Investment Themes & Outlook

11Market Overview

As of June 30, 2019

Sources: Heitman Research, FTSE EPRA/NAREIT

DIVIDEND YIELD SPREAD TO GLOBAL BONDSFTSE EPRA/NAREIT DEVELOPED INDEX

PREMIUM/(DISCOUNT) TO NAVFTSE EPRA/NAREIT DEVELOPED INDEX

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

Jun

-09

No

v-0

9

Ap

r-10

Sep

-10

Fe

b-1

1

Jul-

11

Dec

-11

Ma

y-1

2

Oc

t-12

Mar

-13

Aug

-13

Jan

-14

Jun

-14

No

v-14

Ap

r-15

Se

p-1

5

Feb

-16

Jul-

16

Dec

-16

May

-17

Oc

t-17

Mar

-18

Au

g-1

8

Jan

-19

Jun

-19

-1

0

1

2

3

4

5

6

7

Jun

-09

De

c-0

9

Jun

-10

De

c-1

0

Jun

-11

De

c-1

1

Jun

-12

De

c-1

2

Jun

-13

De

c-1

3

Jun

-14

De

c-1

4

Jun

-15

De

c-1

5

Jun

-16

De

c-1

6

Jun

-17

De

c-1

7

Jun

-18

De

c-1

8

Jun

-19

Spread

L-T Avg.

NORTH AMERICA INVESTMENT OUTLOOK

Macro Economy

− Economic growth will likely stabilize resulting from a

accommodative policy stance by the Federal Reserve

− Canadian economic growth has been slowing due to

weakness in the oil patch and a cooling housing market

− Economic data will likely be mixed but will start to turn

positive as the year progresses

Capital Markets

− Volatility has subsided and REIT debt and equity issuances

have re-emerged

− M&A activity is expected to continue

Real Estate Markets

− Fundamentals remain largely in balance as demand is strong

enough to absorb new supply

− Strong private market demand for real estate should

continue to support REIT pricing

North America Investment Themes & Outlook

12Market Overview

PREMIUM/DISCOUNT TO NAV BY REGION –FTSE EPRA/NAREIT DEVELOPED INDEX

As of June 30, 2019


FTSE EPRA/NAREIT NORTH AMERICADIVIDEND YIELD SPREAD TO BONDS

5.45%

2.71%

-0.41%

0.30% 1.28%

-2.27%

-5%

0%

5%

10%

US Canada FTSE EPRA/NAREIT

Developed Index

5-yr average prem/(disc) to NAV

0

1

2

3

4

5

6

7

8

Jun

-09

De

c-0

9

Jun

-10

De

c-1

0

Jun

-11

De

c-1

1

Jun

-12

De

c-1

2

Jun

-13

De

c-1

3

Jun

-14

De

c-1

4

Jun

-15

De

c-1

5

Jun

-16

De

c-1

6

Jun

-17

De

c-1

7

Jun

-18

De

c-1

8

Jun

-19

Spread L-T Avg.

Europe Investment Themes & Outlook

13Market Overview

PREMIUM/DISCOUNT TO NAV BY REGION –FTSE EPRA/NAREIT DEVELOPED INDEX

As of June 30, 2019


FTSE EPRA/NAREIT EUROPEDIVIDEND YIELD SPREAD TO BONDS

-7.65%

-2.71%

-0.41%

1.05%

-6.23%

-2.27%

-10%

-5%

0%

5%

Continental Europe UK FTSE EPRA/NAREIT

Developed Index


0

1

1

2

2

3

3

4

4

5

Jun

-09

De

c-0

9

Jun

-10

De

c-1

0

Jun

-11

De

c-1

1

Jun

-12

De

c-1

2

Jun

-13

De

c-1

3

Jun

-14

De

c-1

4

Jun

-15

De

c-1

5

Jun

-16

De

c-1

6

Jun

-17

De

c-1

7

Jun

-18

De

c-1

8

Jun

-19

Spread L-T Avg.

EUROPE INVESTMENT OUTLOOK

Macro Economy− Growth in Continental Europe is expected to continue, but at a

slower pace

− UK economic data is expected to remain soft unless a Brexit deal is agreed or a no-Brexit scenario happens

Capital Markets− Primary and secondary equity activity is expected to remain solid

− Credit market activity has improved as interest rate spreads have narrowed following a volatile end to 2018

− Accommodative central bank policies expected to continue due to heightened political/macroeconomic uncertainties

Real Estate Markets− There is a shortage of new supply in most asset classes and

countries

− Selected asset classes (residential, offices, logistics) and prime locations are expected to continue to outperform, while retail remains challenging

− M&A and consolidation to be a continued theme

ASIA-PACIFIC INVESTMENT OUTLOOK

Macro Economy

− Japan, Hong Kong, and Singapore are still growing but at a

slower pace

− However, domestic conditions in Australia remain sluggish

Capital Markets

− The US-China trade war is an issue markets are monitoring

closely for the potential impact on growth

− Sentiment has improved following the strong market

recovery to start the year

Real Estate Markets

− Office markets appear buoyant throughout the region with

rent growth now evident in all markets

− Retail conditions remain challenging in most regions and

segments

− The logistics sector is benefiting from strong ongoing

demand from e-commerce growth

Asia-Pacific Investment Themes & Outlook

14Market Overview

PREMIUM/(DISCOUNT) TO NAV BY REGION –FTSE EPRA/NAREIT DEVELOPED INDEX

As of June 30, 2019


FTSE EPRA/NAREIT ASIA-PACIFICDIVIDEND YIELD SPREAD TO BONDS

11.78%

-18.49%

-7.97%

-0.41%

3.76%

-24.50%

3.45%

-2.27%

-30%

-20%

-10%

0%

10%

20%

Australia/New

Zealand

Asia Ex-Japan Japan FTSE

EPRA/NAREIT

Developed Index


1

2

3

4

Jun

-09

De

c-0

9

Jun

-10

De

c-1

0

Jun

-11

De

c-1

1

Jun

-12

De

c-1

2

Jun

-13

De

c-1

3

Jun

-14

De

c-1

4

Jun

-15

De

c-1

5

Jun

-16

De

c-1

6

Jun

-17

De

c-1

7

Jun

-18

De

c-1

8

Jun

-19

Spread L-T Avg

Portfolio Portfolio FTSE EPRA/NAREIT S pr ead S pr ead

(Gross of Fee)1 (Net of Fee)1 Developed Index (G r oss of Fee) (Net of Fee)

Quarter To Date 0.64% 0.48% 0.20% +0.44% +0.28%

Year To Date 15.88% 15.52% 15.09% +0.79% +0.43%

Rolling One Year 9.68% 9.00% 8.64% +1.04% +0.36%

Rolling Three Years 5.94% 5.28% 5.45% +0.49% -0.17%

Rolling Five Years 6.34% 5.68% 5.79% +0.5 5 % -0.12%

Since Inception (10/31/13) 7.37% 6.70% 6.63% +0.74% +0.07%

0.64%

15.88%

9.68%

5.94% 6.34%7.37%

0.48%

15.52%

9.00%

5.28% 5.68%6.70%

0.20%

15.09%

8.64%

5.45% 5.79%6.63%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Quarter To Date Year To Date Rolling One Year Rolling Three Years Rolling Five Years Since Inception

(10/31/13)

Gross of Fees¹

Net of Fees¹

Index²

LA Water and Power Employees’ Retirement Plan Performance

15

1. Returns are calculated and presented in US Dollars. Periods Ending 6/30/19.2. FTSE EPRA/NAREIT Developed IndexPlease read Performance Notes pages for important disclosure information

ENDING MARKET VALUE AS OF JUNE 30, 2019: $26,583,442

Performance Review

Portfolio Portfolio FTSE EPRA/NAREIT S pr ead S pr ead

(Gross of Fee)1 (Net of Fee)1 Developed Index (G r oss of Fee) (Net of Fee)

Quarter To Date 0.64% 0.48% 0.20% +0.44% +0.28%

Year To Date 15.87% 15.51% 15.09% +0.78% +0.42%

Rolling One Year 9.68% 8.99% 8.64% +1.04% +0.35 %

Rolling Three Years 5.95% 5.29% 5.45% +0.5 1% -0.16%

Rolling Five Years 6.34% 5.67% 5.79% +0.5 4% -0.12%

Since Inception (10/31/13) 7.38% 6.71% 6.63% +0.75 % +0.08%

LA Water and Power Employees’ Retiree Health Benefit Plan Performance

1. Returns are calculated and presented in US Dollars. Periods Ending 6/30/19. 2. FTSE EPRA/NAREIT Developed IndexPlease read Performance Notes pages for important disclosure information


0.64%

15.87%

9.68%

5.95% 6.34%7.38%

0.48%

15.51%

8.99%

5.29% 5.67%6.71%

0.20%

15.09%

8.64%

5.45% 5.79%6.63%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Quarter To Date Year To Date Rolling One Year Rolling Three Years Rolling Five Years Since Inception

(10/31/13)

Gross of Fees¹

Net of Fees¹

Index²

ENDING MARKET VALUE AS OF JUNE 30, 2019: $6,595,058

Annualized Peer Relative Performance

Performance Review

Source: eVestment; HeitmanQuartile performance ranking calculated using the Global Diversified Developed CompositeReturns calculated and presented in USD and Gross of Fees for the Composite. As of 6/30/19

LA WATER AND POWER EMPLOYEES’ RETIREMENT PLAN LA WATER AND POWER EMPLOYEES’ RETIREE HEALTH BENEFIT PLAN

1 Year 3 Years 5 Years 1 Year 3 Years 5 Years

l LA Water ERP 1.04% 0.49% 0.55% l LA Water ERHBP 1.04% 0.51% 0.54%

1st Quartile 1st Quartile

2nd Quartile 2nd Quartile

3rd Quartile 3rd Quartile

4th Quartile 4th Quartile

High 5.03 7.06 5.50 High 5.03 7.06 5.50

25th Percentile 3.70 2.07 1.72 25th Percentile 3.70 2.07 1.72

Median 1.39 0.78 0.28 Median 1.39 0.78 0.28

75th Percentile -0.20 -0.37 -0.55 75th Percentile -0.20 -0.37 -0.55

Low -14.54 -4.97 -2.50 Low -14.54 -4.97 -2.50

17

Calendar Year Peer Relative Performance


Source: eVestment; HeitmanQuartile performance ranking calculated using the Global Diversified Developed CompositeReturns calculated and presented in USD and Gross of Fees for the Composite. As of 6/30/19

2018 2017 2016 2015 2014 2018 2017 2016 2015 2014

l LA Water ERP 0.81% -0.44% -0.66% 1.05% 2.26% l LA Water 0.81% -0.42% -0.66% 1.08% 2.24%

1st Quart ile 1st Quart ile

2nd Quart ile 2nd Quart ile

3rd Quart ile 3rd Quart ile

4t h Quart ile 4t h Quart ile

High 3.17 10.24 4.41 8.47 10.17 High 3.17 10.24 4.41 8.47 10.17

25th Percentile 1.09 3.74 0.33 2.82 2.60 25th 1.09 3.74 0.33 2.82 2.60

Median 0.13 1.23 -1.11 1.56 0.62 Median 0.13 1.23 -1.11 1.56 0.62

75th Percentile -1.61 0.20 -3.20 0.08 -0.60 75th -1.61 0.20 -3.20 0.08 -0.60

Low -20.27 -6.13 -6.20 -7.04 -4.02 Low -20.27 -6.13 -6.20 -7.04 -4.02

Observations 48 53 53 52 46 Observations 48 53 53 52 46

LA WATER AND POWER EMPLOYEES’ RETIREMENT PLAN LA WATER AND POWER EMPLOYEES’ RETIREE HEALTH BENEFIT PLAN

Heitman Global Real Estate Securities StrategyRisk-Adjusted Performance - USD

19Performance Review

HEITMAN GLOBAL REAL ESTATE SECURITIES STRATEGY

Portfolio¹ Index2 Portfolio¹ Index2 Portfolio¹ Index2

Annualized return 5.78% 5.45% 6.36% 5.79% 8.63% 7.72%

Excess return over 90-day T-bills 3 4.38% 4.04% 5.48% 4.91% 8.08% 7.17%

Annualized standard deviation 11.02% 11.14% 11.69% 11.89% 13.45% 13.49%

Sharpe Ratio4 0.40 0.36 0.47 0.41 0.60 0.53

Excess return over benchmark

Tracking error vs. benchmark

Information Ratio

Alpha

Beta

R2

Upside Market Capture

Downside Market Capture

3 Years 5 Years

0.34%

0.83%

0.40

0.39

0.99

0.99

1.00

0.97

0.57%

1.00

0.96

0.94%

0.61

0.64

0.98

0.99

Since Inception (12/31/10)

0.91%

0.93%

0.98

0.89

0.99

1.00

1.02

0.97

The Risk Adjusted Performance is shown above as supplemental information to the Heitman Global Real Estate Securities Strategy Composite.

1. Returns are calculated and presented in US Dollars and Gross of Fees. Periods Ending June 30, 2019.2. FTSE EPRA/NAREIT Developed Index

3. Linked monthly excess returns over risk-free T-bills.

4. For the periods when the excess returns over risk-free T-bills are negative, the Sharpe ratio has been adjusted to the Modified Sharpe Ratio.

Please read Performance Notes pages for important disclosure information.

Office

16.6%

Residential

18.1%

Retail

14.1%

Diversified

14.5%

Industrial

11.1%Health Care 9.2%

Specialty 6.2%

Hotel/R & E 3.5%

Storage 4.4%

Data Centers 2.1%

SECTOR WEIGHTINGS

Heitman Global Real Estate Securities StrategyPortfolio Characteristics


PORTFOLIO CHARACTERISTICS

Heitman Index¹

Number of Securities 104 334

Top 10 Holdings 27.41% 20.52%

Active Share

Beta 1.00 1.00

Dividend Yield 3.66% 3.83%

NAV Prem/(Disc) -2.49% -0.67%

Earnings Growth 3.81% 3.41%

LTV 31.11% 31.47%

52.97%

As of June 30 , 2019.

The Portfolio Characteristics shown above are supplemental information to the Heitman Global Real Estate Securities Strategy Composite.The composite benchmark changed from the FTSE EPRA/NAREIT Developed Rental Index to the FTSE EPRA/NAREIT Developed Index effe ctive June 1, 2012.

1. FTSE EPRA/NAREIT Developed Index and the respective regional sleeves.

Japan, 11.54%

Hong Kong, 7.91%

Australia, 5.19%

Singapore, 2.73% US, 54.16%

Canada, 1.96%

Europe, 12.16%

UK, 4.36%

Asia-Pacific

27%

North America

56%

Europe

17%

0%

10%

20%

30%

40%

50%

60%

70%

Asia-Pacific North America Europe

COUNTRY WEIGHTINGS

OVERWEIGHTS/UNDERWEIGHTS

Security Sector Heitman Active Weight

Invitation Homes Residential 2.42% +1.70%

Camden Property Trust Residential 2.24% +1.62%

Ventas Health Care 3.11% +1.55%

AvalonBay Communities Residential 3.31% +1.51%

Regency Centers Retail 2.19% +1.48%

Essex Property Trust Residential 0.00% -1.21%

Realty Income Specialty 0.00% -1.38%

Equity Residential Residential 0.34% -1.42%

Digital Realty Trust Data Centers 0.00% -1.55%

Welltower Health Care 0.00% -2.10%

To

p 5

Bo

tto

m 5

Heitman Global Real Estate Securities StrategyPerformance Attribution – USD – 12 mos


Positive performance was driven primarily by stock selection in the US and Canada

− CyrusOne outperformed after signing some very large leases at its data center developments

− CareTrust REIT continued to execute on its growth plan

− InterRent outperformed on sector leading NAV growth due to strength in its Canadian multi-family markets

Performance was negative in Asia-Pacific and Europe

− Japan had positive performance from stock selection within the Developers

− Singapore detracted from performance as surprise property tightening measures hurt the developers

− In Europe, French office company Gecina detracted as protests and demonstrations threatened to slow growth

Heitman Global

North America 56.57 13.99 14.00 7.83 56.22 10.47 10.43 5.85 -0.02 1.39 0.59 1.96 -0.03 1.93

Middle East 0.00 - - 0.00 0.13 38.03 34.48 0.04 -0.03 0.00 0.00 -0.03 0.00 -0.04

Europe 16.95 -4.70 -1.89 -0.94 17.47 -3.81 -1.19 -0.75 0.03 -0.10 -0.03 -0.10 -0.02 -0.12

Cash 0.69 9.89 10.54 -0.05 0.00 - - 0.00 -0.18 0.00 0.00 -0.18 0.01 -0.18

Asia-Pacific 25.79 12.04 11.48 3.05 26.18 13.32 12.77 3.47 0.01 -0.32 -0.01 -0.32 0.00 -0.32

To ta l 10 0 .0 0 9 .9 0 10 .30 9 .9 0 10 0 .0 0 8.6 1 8.9 7 8.6 1 -0 .19 0 .9 7 0 .55 1.33 -0 .0 5 1.2 8

Region & Country Grouping

Average

Weight

Total

Return

Total

Return

(Local)

Portfolio¹ FTSE EPRA/NAREIT Developed Attribution Analysis

Total

Return

Total

Currency

Effect

Total

Effect

Total

Return

(Local)

Contribution

To Return

Allocation

Effect

(Local)

Selection

Effect

(Local)

Interaction

Effect

(Local)

Total

Effect

(Local)

Average

Weight

Contribution

To Return

Returns are presented in US Dollars. 12 Months Ending 6/30/19.

Representative Heitman Global Real Estate Securities Strategy.

Please read Performance Notes pages for important disclosure information.Please read Attribution Analysis Performance Notes page for important disclosure information.

Top Ten Contributors/Detractors


Portfolio data for Los Angeles Water and Power Employees’ Retirement PlanOne year ended 6/30/19

Top Ten Contributors

CareTrust REIT 0.36

Cyrusone 0.33

HCP 0.27

Agree Realty 0.26

Brookfield Property REIT 0.26

Equinix 0.25

AvalonBay Communities 0.24

Invitation Homes 0.21

Essential Properties Trust 0.21

InterRent Real Estate Investment 0.18

Bottom Ten Detractors

Pebblebrook Hotel Trust -0.28

Realty Income -0.27

Adler Real Estate -0.22

Lifestyle Intl. -0.22

Empire State Realty Trust-A -0.21

Cairn Homes -0.19

Host Hotels & Resorts -0.17

Sun Communities -0.15

Equity Lifestyle Properties -0.15

Sunstone Hotel Investors -0.15

Top Ten Holdings

23Portfolio Review & Characteristics

Portfolio data for Los Angeles Water and Power Employees’ Retirement Plan6/30/19

Security Region Sector

Portfolio

Weight

Benchmark

Weight

Excess

Weight

ProLogis North America Industrial 3.39% 3.19% +0.20

Simon Property Group North America Retail 3.22% 3.12% +0.10

AvalonBay Communities North America Residential 3.03% 1.79% +1.23

Ventas North America Health Care 2.79% 1.55% +1.24

Public Storage North America Storage 2.71% 2.24% +0.48

Sun Hung Kai Properties Asia Diversified 2.18% 1.53% +0.65

VICI Properties North America Specialty 2.17% 0.62% 1.54

Regency Centers North America Retail 2.15% 0.70% +1.45

Camden Property Trust North America Residential 2.12% 0.62% +1.51

Invitation Homes North America Residential 2.08% 0.72% +1.37

Complete List of Holdings

24Portfolio Review & Characteristics 24

Portfolio data for Los Angeles Water and Power Employees’ Retirement Plan6/30/19

P ort fol i o Be n ch m ark We i g h t M arke t P ort fol i o Be n ch m ark We i g h t M arke t

Se cu ri t y R e g i on Se ct or We i g h t We i g h t Ex ce s s Val u e Se cu ri t y R e g i on Se ct or We i g h t We i g h t Ex ce s s Val u e

Sun Hung Kai Properties Asia Diversified 2.18 1.53 0.65 579,845.44 PPHE Hotel Group Europe Hotel/R & E 0.33 0.00 0.33 86,868.15

Mitsubishi Estate Co Asia Diversified 1.99 1.40 0.60 529,946.03 Inmobiliaria Colonial Europe Office 0.31 0.23 0.08 82,376.36

Mitsui Fudosan Co Asia Diversified 1.74 1.45 0.29 462,728.21 Grainger Europe Residential 0.29 0.12 0.17 76,834.10

Goodman Group Asia Industrial 1.63 1.19 0.43 432,006.93 Picton Property Income Europe Office 0.29 0.04 0.24 76,358.91

Link REIT Asia Retail 1.50 1.65 -0.15 398,254.08 Xior Student Housing Europe Residential 0.26 0.04 0.23 69,890.46

CK Asset Holding Asia Diversified 1.12 1.34 -0.21 299,006.87 Entra ASA Europe Office 0.26 0.14 0.12 68,572.55

Nippon Building Fund Asia Office 1.03 0.55 0.48 273,992.95 Shaftesbury Europe Retail 0.23 0.14 0.08 60,095.53

Daiwahouse Residential Investment Asia Residential 1.02 0.29 0.73 270,384.26 Lar Espana Real Estate Europe Retail 0.18 0.03 0.15 49,015.13

Dexus Property Group Asia Diversified 0.95 0.63 0.32 253,340.67 Cairn Homes Europe Residential 0.18 0.00 0.18 48,435.84

Comforia Residential REIT Asia Residential 0.93 0.11 0.82 247,048.45 Hammerson Europe Retail 0.17 0.17 0.00 45,881.75

Swire Properties Asia Diversified 0.83 0.27 0.56 220,444.14 Godewind Immobilien Europe Office 0.10 0.00 0.10 25,468.00

CapitaLand Asia Diversified 0.81 0.41 0.40 215,927.62 Workspace Group Europe Office 0.02 0.09 -0.08 4,327.00

Scentre Group Asia Retail 0.78 0.87 -0.10 206,229.60 ProLogis Inc North America Industrial 3.39 3.19 0.20 900,644.40

GLP J-REIT Asia Industrial 0.76 0.25 0.51 201,741.23 Simon Property Group North America Retail 3.22 3.12 0.10 856,153.84

MCUBS Midcity Investment Asia Office 0.76 0.09 0.67 201,407.09 AvalonBay Communities North America Residential 3.03 1.79 1.23 804,592.80

INVINCIBLE Investment Asia Diversified 0.74 0.15 0.59 195,771.30 Ventas Inc North America Health Care 2.79 1.55 1.24 742,622.75

Sino Land Co Asia Diversified 0.72 0.34 0.38 192,292.07 Public Storage North America Storage 2.71 2.24 0.48 721,655.10

Mirvac Group Asia Diversified 0.72 0.55 0.17 190,127.08 VICI Properties North America Specialty 2.17 0.62 1.54 576,257.84

Vicinity Centres Asia Retail 0.71 0.34 0.36 187,828.71 Regency Centers North America Retail 2.15 0.70 1.45 572,629.20

Ascendas Real Estate Investment Asia Industrial 0.68 0.37 0.31 182,082.83 Camden Property Trust North America Residential 2.12 0.62 1.51 564,749.90

Mapletree Commercial Trust Asia Diversified 0.67 0.19 0.48 178,606.60 Invitation Homes North America Residential 2.08 0.72 1.37 553,471.38

Activia Properties Asia Diversified 0.65 0.19 0.46 174,122.89 HCP Inc North America Health Care 1.96 0.97 0.99 521,337.96

Orix JREIT Asia Office 0.64 0.30 0.33 169,702.99 Apartment Investment & Mngt North America Residential 1.79 0.47 1.32 474,937.12

Champion REIT Asia Office 0.62 0.10 0.51 164,374.48 Boston Properties North America Office 1.52 1.26 0.25 403,770.00

Sumitomo Realty & Development Asia Diversified 0.60 0.90 -0.30 159,398.77 Duke Realty North America Industrial 1.50 0.72 0.78 399,866.50

Frasers Centrepoint Trust Asia Retail 0.51 0.00 0.51 135,939.10 Pebblebrook Hotel Trust North America Hotel/R & E 1.50 0.23 1.27 398,972.44

LaSalle Logiport REIT Asia Industrial 0.47 0.00 0.47 124,354.93 American Campus Communities North America Residential 1.48 0.40 1.08 394,668.00

Henderson Land Development Asia Diversified 0.43 0.00 0.43 114,495.09 Host Hotels & Resorts North America Hotel/R & E 1.46 0.85 0.62 389,233.86

Ingenia Communities Group Asia Residential 0.32 0.00 0.32 84,876.10 Spirit Realty Capital North America Specialty 1.35 0.23 1.12 358,855.92

Lifestyle Intl. Asia Retail 0.26 0.00 0.26 68,483.46 Four Corners Property Trust North America Specialty 1.33 0.12 1.21 353,294.91

Wharf Real Estate Investment Asia Diversified 0.10 0.54 -0.45 25,282.48 Agree Realty North America Specialty 1.30 0.15 1.14 344,653.05

CapitaMall Trust Asia Retail 0.00 0.30 -0.30 200.22 Extra Space Storage North America Storage 1.29 0.83 0.46 343,764.00

Unibail-Rodamco-Westfield Europe Retail 1.67 1.28 0.39 444,559.49 Physicians Realty Trust North America Health Care 1.23 0.20 1.03 327,558.08

Vonovia Europe Residential 1.60 1.58 0.03 425,970.57 Hudson Pacific Properties North America Office 1.22 0.32 0.90 323,218.05

Deutsche Wohnen Europe Residential 1.28 0.83 0.45 340,590.56 Liberty Property Trust North America Industrial 1.15 0.47 0.68 304,743.60

Segro Europe Industrial 0.91 0.64 0.26 241,252.95 Dream Office REIT North America Office 1.14 0.06 1.09 303,670.20

Gecina Europe Office 0.86 0.50 0.36 227,946.39 Cousins Properties North America Office 1.10 0.33 0.77 293,591.89

PSP Swiss Property Europe Office 0.83 0.29 0.54 221,763.59 SITE Centers North America Retail 1.07 0.12 0.96 285,110.16

British Land Co Europe Office 0.83 0.41 0.42 221,038.84 Empire State Realty Trust-A North America Office 1.01 0.14 0.88 269,778.96

Fabege Europe Office 0.79 0.25 0.54 210,192.84 Highwoods Properties North America Office 1.01 0.27 0.74 268,037.00

Aroundtown Europe Office 0.65 0.35 0.30 173,641.53 CareTrust REIT North America Health Care 0.95 0.14 0.80 251,687.52

CA Immobilien Anlagen Europe Office 0.62 0.16 0.46 164,641.84 QTS Realty Trust North America Data Centers 0.87 0.16 0.71 231,823.60

Aedifica Europe Health Care 0.54 0.15 0.39 144,369.03 Sabra Health Care REIT North America Health Care 0.83 0.22 0.61 221,512.50

Adler Real Estate Europe Residential 0.50 0.00 0.50 133,037.67 First Capital Realty North America Retail 0.75 0.16 0.59 200,089.89

Warehouses De Pauw Europe Industrial 0.47 0.19 0.28 124,047.25 American Assets Trust North America Retail 0.67 0.14 0.53 178,443.44

Irish Residential Properties Europe Residential 0.44 0.04 0.40 117,441.71 Cyrusone North America Data Centers 0.65 0.41 0.24 171,486.12

Primary Health Properties Europe Health Care 0.44 0.12 0.32 116,856.64 Equity Residential North America Residential 0.56 1.76 -1.21 147,588.48

Derwent London Europe Office 0.40 0.25 0.15 107,550.70 Equinix North America Data Centers 0.46 0.00 0.46 121,029.60

Dalata Hotel Group Europe Hotel/R & E 0.40 0.00 0.40 106,287.76 New Senior Investment Group North America Health Care 0.28 0.00 0.28 75,371.52

Safestore Holdings Europe Storage 0.37 0.10 0.27 98,716.75

Change in Market Value Since Inception


Portfolio data for Los Angeles Water and Power Employees’ Retirement Plan and Retiree Health Benefit Plan combinedAs of 6/30/19

$13.68

$16.48

$20.24

$21.50

$25.68

$26.71

$25.01 $24.72

$25.90

$27.22$28.03 $28.35

$26.96$27.49

$28.31$28.77

$29.88

$28.58

$30.30

$33.18

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

12/31/2013 6/30/2014 12/31/2014 6/30/2015 12/31/2015 6/30/2016 12/31/2016 6/30/2017 12/31/2017 6/30/2018

Market Value ($ in milllions)

Heitman Global Real Estate Securities StrategyNorth America – Attribution Review – 1 Year USD


The Country Returns shown above are supplemental information to the Heitman Global Real Estate Securities Strategy Composite.1. Representative Heitman Global Real Estate Securities North America Strategy.

2. FTSE EPRA/NAREIT Developed North America Index.

3. Allocation Contribution includes currency effect.

Returns are presented in US Dollars. 12 Months Ending 6/30/19.Please read Performance Notes pages for important disclosure information.Please read Attribution Analysis Performance Notes page for important disclosure information.

Unite d State s 10.31% 94.97% 1 b p s 314 b p s 314 b p s

Health Care 23.56% 13.01% -2 bps 127 bps 126 bps

Data Centers 7.37% 3.61% 10 bps 91 bps 101 bps

Diversified -24.21% 1.17% 31 bps 25 bps 57 bps

Regional Malls -9.14% 8.55% 6 bps 23 bps 29 bps

Self-Storage 8.22% 6.57% -1 bps 21 bps 20 bps

Office -2.41% 12.55% 9 bps 9 bps 18 bps

Residential 22.83% 17.40% 4 bps 9 bps 13 bps

Triple Net 23.93% 9.72% -11 bps 24 bps 13 bps

Strip Centers 5.41% 6.11% 3 bps -8 bps -5 bps

Industrial 22.38% 9.96% -2 bps -14 bps -15 bps

Hotels/Resort & Entertainment -9.81% 6.33% 0 bps -43 bps -42 bps

Canada 13.5 3% 5 .03% -5 b p s 41 b p s 36 b p s

Residential 15.42% 1.08% 3 bps 27 bps 30 bps

Office 10.86% 0.73% -2 bps 14 bps 12 bps

Health Care 6.12% 0.37% 3 bps 0 bps 3 bps

Diversified 14.32% 0.99% -1 bps 0 bps -1 bps

Industrial 18.98% 0.24% -2 bps 0 bps -2 bps

Retail 15.23% 1.61% -1 bps -5 bps -6 bps

Cas h & Cas h Equivale nts - - -17 b p s 0 b p s -17 b p s

Total 10.47% 100.00% -22 b p s 35 5 b p s 333 b p s

Selection +

Interaction EffectTotal Effect

Returns Average Weighting Portfolio Effect

Allocation

Contribution3 Property Type¹ Index²

RelativeIndex²

Relative

-0.45%

-0.07%

1.79%

-0.78%

0.20%

-0.62%

-0.55%

0.22%

-0.42%

-0.42%

0.27%

-0.06%

0.02%

0.58%

1.06%

-0.37%

-0.99%

-0.24%

-0.01%

0.43%

-2% -1% 0% 1% 2%

3 .32%

11.45 %

18.41%

16.61%

2.41%

3.5 7%

0.71%

0.61%

3.5 4%

-1.02%

-1.18%

-5 .5 2%

8.45%

24.38%

8.99%

0.00%

0.00%

0.00%

-4.10%

0 .00%

3 .33%

-10% 0% 10% 20% 30%

Heitman Global Real Estate Securities StrategyAsia-Pacific – Attribution Review – 1 Year USD


The Country Returns shown above are supplemental information to the Heitman Global

Real Estate Securities Strategy Composite.1. Representative Heitman Global Real Estate Securities Asia-Pacific Strategy.

2. FTSE EPRA/NAREIT Developed Asia Index.



Please read Performance Notes pages for important disclosure information.Please read Attribution Analysis Performance Notes page for important disclosure information.

Relative Relative

Jap an 10.26% 41.87% -4 b p s 88 b p s 84 b p s

Investors & REITs 16.50% 24.84% -2 bps 46 bps 45 bps

Developers 1.43% 17.03% -6 bps 50 bps 44 bps

Aus tral ia 16.84% 18 .04% 2 b p s 7 b p s 9 b p s

Investors & REITs 16.84% 18.04% 1 bps 7 bps 8 bps

Ne w Ze aland 25 .29% 0.35 % -4 b p s 0 b p s -4 b p s

Investors & REITs 25.29% 0.35% 0 bps 0 bps 0 bps

Cas h & Cas h Equivale nts - - -26 b p s 0 b p s -26 b p s

Cash & Cash Equivalents - - -3 bps 0 bps -3 bps

Hong Kong 13.11% 30.5 6% -1 b p s -102 b p s -103 b p s

Developers 10.86% 16.06% -2 bps -1 bps -3 bps

Investors & REITs 15.70% 14.51% 3 bps -101 bps -99 bps

Singap ore 20.43% 9.18% -4 b p s -109 b p s -113 b p s

Investors & REITs 29.19% 6.20% -12 bps -3 bps -15 bps

Property Cos & Dev 4.96% 2.97% -19 bps -76 bps -94 bps

Total 13.32% 100.00% -37 b p s -115 b p s -15 2 b p s

Index² Index²Allocation

Contribution3

Selection +



Property Type¹

2 .19%

2.00%

2.68%

0 .39%

0.39%

0 .00%

0.00%

0 .00%

0.00%

-3 .44%

-0.40%

-6.05 %

-1 2.56%

-0.91%

-17.27%

-1 .5 2%

-20% -10% 0% 10%

-0 .29%

-0.37%

0.08%

0 .12%

0.12%

-0 .35%

-0.35 %

1 .41%

1.41%

-0 .30%

-1.63%

1.33%

-0 .5 9%

-1.08%

0.5 0%

-2% -1% 0% 1% 2%

Heitman Global Real Estate Securities StrategyEurope – Attribution Review – 1 Year USD


The Country Returns shown above are supplemental information to the Heitman Global Real

Estate Securities Strategy Composite.

1. Representative Heitman Global Real Estate Securities Europe Strategy.

2. FTSE EPRA/NAREIT Developed Europe Index.



Please read Performance Notes pages for important disclosure information.

Please read Attribution Analysis Performance Notes page for important disclosure information.

Unite d Kingdom -9.5 1% 26.73% 2 b p s 72 b p s 74 b p s

Retail -33.61% 5.25% 14 bps 42 bps 56 bps

Storage 6.73% 1.29% 16 bps 6 bps 22 bps

Hotel/Resort & Entertainment - - 15 bps 0 bps 15 bps


Industrial 6.64% 5.46% -3 bps 6 bps 3 bps

Office -11.26% 10.39% 8 bps -6 bps 2 bps

Residential -0.93% 2.86% 5 bps -41 bps -36 bps

Cas h - - -1 b p s 0 b p s -1 b p s

Europ e -1 .64% 73.27% -16 b p s -147 b p s -162 b p s

Industrial 33.23% 1.86% 50 bps 37 bps 86 bps


Storage 22.21% 0.18% -4 bps 0 bps -4 bps

Retail -23.32% 15.89% 48 bps -64 bps -16 bps

Hotel/Resort & Entertainment 4.40% 0.55% 11 bps -38 bps -26 bps

Office 9.88% 27.47% -21 bps -44 bps -66 bps

Residential -1.56% 25.54% 2 bps -150 bps -148 bps

Total -3.81% 100.00% -14 b p s -75 b p s -89 b p s


Property Type¹ Index²

Relative

Index²

RelativeAllocation

Contribution3

Selection +


2 .5 6%

10.12%

5 .84%

0.00%

-12.20%

1.05 %

-0.83%

-15 .12%

0 .00%

-2 .22%

12.80%

0.12%

0.00%

-3.68%

-18.68%

-2.5 1%

-5 .87%

-0 .89%

-30% -20% -10% 0% 10% 20%

-0 .23%

-0.96%

0.64%

0.31%

0.5 4%

0.27%

-0.86%

-0.17%

0 .45%

-0 .22%

1.85 %

0.13%

-0.18%

-1.69%

-0.38%

-0.19%

0.24%

-2% -1% 0% 1% 2%

Heitman Key Differentiators

29Conclusion

Information Advantage

Unique Approach to Risk Management

Client Alignment

WPERP Fee Schedule

31Appendix: Fee Schedule

62.5 bps per annum on the average of the month end market values,

as computed by the custodian

As of 6/30/19

Common REIT Terms

− Cash Available for Distribution (CAD): CAD is calculated by subtracting from Funds from Operations (FFO) both (1)

normalized recurring expenditures that are capitalized by the REIT and then amortized, but which are necessary to

maintain a REIT's properties and its revenue stream (e.g., new carpeting and drapes in apartment units, leasing expenses

and tenant improvement allowances) and (2) "straight-lining" of rents.

− Capitalization Rate: The capitalization rate (or "cap" rate) for a property is determined by dividing the property's net

operating income by its purchase price. Generally, high cap rates indicate higher returns and greater perceived risk.

− Funds From Operations (FFO): The most commonly accepted and reported measure of REIT operating performance.

Equal to a REIT's net income, excluding gains or losses from sales of property, and adding back real estate depreciation.

− Mortgage REIT: A REIT that makes or owns loans and other obligations that are secured by real estate collateral.

− Multiple to Growth: This is a common valuation measure that is calculated by dividing a REIT’s following year Price/FFO

multiple by its FFO growth rate plus dividend yield and then dividing by 100.

− Net Asset Value (NAV): The net "market value" of all a company's assets, including but not limited to its properties, after

subtracting all its liabilities and obligations.

− Straight-lining: Real estate companies such as REITs "straight line" rents because generally accepted accounting

principles require it. Straight lining averages the tenant's rent payments over the life of the lease.

− Payout Ratio: This is a measure of the security of a company’s dividend and is calculated by dividing a REITs CAD by its

dividend.

33Appendix: Glossary of Investment Terms

Presenters

Jerry Ehlinger is Senior Managing Director and Head of Global Real Estate Securities. He is responsible for leading the firm's regional and global public real estate securities strategies, and is a member of the group's Global Investment Committee. Jerry is also a member of the firm's Global Management Committee, and an equity owner of the firm. Jerry holds 23 years of experience in real estate and investment management, including 13 years of experience managing global real estate securities portfolios. He previously served as Portfolio Manager for Heitman's North America Real Estate Securities group, and co-Portfolio Manager for the group's global strategies. Previously, Jerry was Lead Portfolio Manager and Head of Real Estate Securities, Americas at DB/RREEF Real Estate. He began his career at Morgan Stanley Asset Management, where he primarily covered the REIT sector as both a sell-side analyst and senior research associate. Jerry received an MS in Finance, Investment and Banking from the University of Wisconsin-Madison and a BS in Finance from the University of Wisconsin-Whitewater. Among other professional affiliations, Jerry is a member of the NAREIT Real Estate Investment Advisory Council, the CFA Institute, and the CFA Society of Chicago.

John Mancuso is a Senior Vice President in Heitman’s Client Service & Marketing group. He is responsible for developing and maintaining relationships with institutional investors in the western region of the US in private real estate equity, public securities, and private real estate debt. Prior to joining Heitman, John was the head of private markets research at Russell Investments. He was responsible for overseeing Russell’s private markets investment research practice on a global basis by setting research priorities, identifying strategies for inclusion in client portfolios, and managing the due diligence process. Previously, John was with Meketa Investment Group, where he was responsible for supporting several client relationships and coordinating the research and due diligence process for real estate investments. John began his career at Lucent Technologies, working in several accounting and finance roles across the business. John received a BS in Finance from Boston College and an MS in Management from the F.W. Olin School of Business at Babson College. He is a member of the Pension Real Estate Association, CFA Institute and the CFA Society of Colorado.

35Appendix: Biographies

Heitman Global Real Estate Securities Strategy

37Appendix: Performance Notes & Disclaimer

Three Year

Three Year Annualized ex-post

Total Return Total Return FTSE EPRA/NAREIT Total Composite Total Firm Percentage Annualized ex-post Standard Deviation

Net of Fees Gross of Fees Developed Index Number of Standard at End of Period at End of Period of Firm Standard Deviation FTSE EPRA/NAREIT

Year (percent) (percent) (percent) Portfolios Deviation ($millions) ($millions) Assets Composite Developed Index

2011 -2.88 -2.65 -5.82 less than 5 N/A 126 2,398 5.25 N/A N/A

2012 28.03 28.35 28.65 less than 5 N/A 222 2,440 9.10 N/A N/A

2013 4.63 4.93 4.39 6 N/A 408 2,176 18.75 16.53 16.43

2014 18.07 18.49 15.89 7 0.29 740 3,217 23.00 12.40 12.48

2015 1.25 1.58 0.05 7 0.25 776 3,371 23.03 12.31 12.27

2016 3.55 3.89 4.99 7 0.21 725 3,782 19.17 11.97 12.22

2017 10.06 10.45 11.42 7 0.28 742 4,626 16.04 10.71 10.91

2018 -4.15 -3.77 -4.74 10 0.2 828 5,424 15.27 10.78 11.01

1. Heitman Real Estate Securities LLC (“HRES”) is an investment adviser specializing in the investment of equity, convertible and debt instruments of North American publicly traded real estate related companies (REITs – real estate

investment trusts and REOCs – real estate operating companies). Heitman International Real Estate Securities GmbH (“HIRES”) is an investment adviser specializing in the investment of equity, convertible and debt instruments of

European publicly traded real estate related companies. Heitman International Real Estate Securities HK Limited (“HIRES HK”) is an investment adviser specializing in the investment of equity, convertible and debt instruments of Asia

/ Pacific publicly traded real estate related companies Heitman International Real Estate Securities Pty Limited (“HIRES PTY”) is an investment adviser specializing in the investment of equity, convertible and debt instruments of Asia /

Pacific publicly traded real estate related companies. HRES, HIRES and HIRES PTY HIRES HK (collectively, “Company”) are limited liability companies whose sole member is Heitman LLC. The members of Heitman are KE I LLC and KE

2 LLC, both members are comprised of a group of key Heitman employees.

2. This composite includes all discretionary, global strategy clients benchmarked to the FTSE EPRA/NAREIT Developed Index.

3. The Company claims compliance with Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with GIPS standards. The Company has been independently verified for the periods

of January 1, 1993 through December 31, 2017. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and

procedures are designed to calculate and present performance in compliance with the GIPS standards. The Global Real Estate Securities Composite (the “Composite”) has been examined for the periods of January 1, 1991 through

December 31, 2017. The verification does not ensure the accuracy of any composite presentation.

4. Trade date settlement valuation is used and dividends are recorded on “ex-date” for this composite. This composite is denominated in US dollars.

5. The FTSE EPRA/NAREIT Developed Index is a market cap weighted index of publicly traded REITs and REOCS from around the world. The Indices are presented for illustrative purposes only and are not intended to imply Heitman’s past

or future performance. The performance of the Indices assumes dividend reinvestment, but do not reflect transaction costs, advisory fees, custodian fees, trading costs and other costs of investment. Individuals cannot directly invest

in the indices described above.

6. The dispersion of annual returns is measured using a simple annual standard deviation of accounts in the composite for the entire year. For the purpose of this presentation, a significant population count is defined as more than 5

accounts in the composite. Periods with five or fewer accounts are marked “N/A”.

7. Accounts are included in this composite the first full month under management. Terminated accounts are included in this composite through completion of their last full month under management. This composite was created in

September 2017.

8. Current representative fee schedule is as follows: first $25 million – 0.65%; over $25 million to $100 million – 0.55%; over $100 million to $250 million – 0.50%; over $250 million – 0.45%. Advisory fees are described in Part II of

Form ADV (copy available upon request).

9. Performance results presented gross and net of management fees. Gross of fees performance is presented before management fees, but after all relevant trading expenses and all applicable non reclaimable withholding taxes. Net

of Fees performance is presented after management fees and any performance fees, all relevant trading expenses and other expenses that may be incurred in the management of an account and all applicable non reclaimable

withholding taxes. Composite descriptions, policies for calculating performance, preparing compliant presentations, and valuing portfolios are available upon request. Past performance is no guarantee of future results. Advisory fees

are described in Part II of Form ADV (available upon request).

Attribution Analysis

1. The results are gross of fees and calculated based on transactions. The results may vary slightly from the actual returns due to rounding, intra-day trading and fees.

2. Please note that the portfolio’s performance as represented in this file is preliminary and may vary from the official result.

3. Attribution analysis are performed on a representative account in a strategy and not on the entire constituents of a strategy’s composite. Therefore, there may be a disparity between the returns calculated through the attribution analysis for a representative account and a composite.

38Appendix: Performance Notes & Disclaimer

IMPORTANT NOTICE AND DISCLAIMER

− This confidential presentation and the information set out herein (the “Presentation”) is summary in nature only and is qualified in its entirety by the information set out in the confidential private placement memorandum or other formal disclosure document (the “Disclosure Document”) relating to the potential opportunity described herein (the “Opportunity”).

− This Presentation has been provided to the recipient by Heitman or an affiliate as sponsor (the “Sponsor”) and is only intended to assist sophisticated professional investors in deciding whether they wish to consider reviewing the Disclosure Document. This Presentation is meant for use in one-on-one presentations with sophisticated professional investors. However, the contents of this Presentation are not to be construed as investment, legal or tax advice and do not consider the particular circumstances specific to any individual recipient to whom this Presentation has been delivered. The recipient should obtain advice from the appropriate qualified experts. Further, the Sponsor is not acting in the capacity of a fiduciary of any recipient of this Presentation.

− This Presentation is furnished on a strictly confidential basis to sophisticated professional investors. None of the information contained herein may be reproduced or passed to any person or used for any purpose other than for the purpose of considering the Opportunity. No approach of any kind may be made by any officer, employee or adviser of the recipient of this Presentation to any officer, employee, customer or supplier of the Sponsor without the prior written approval of the Sponsor. Notwithstanding the foregoing, recipients (and each employee, agent or representative of any recipient) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of an investment described herein and all materials of any kind (including opinions or other tax analyses) that are provided that relate to such tax treatment or tax structure, except to the extent maintaining such confidentiality is necessary to comply with any applicable securities laws. The foregoing language is not intended to waive any confidentiality obligations otherwise applicable, except with respect to the information and materials specifically referenced in the preceding sentence. By accepting delivery of this Presentation, each prospective investor agrees to the foregoing.

− Any opinions, forecasts, projections or other statements, other than statements of historical fact, that are made in this Presentation are forward-looking statements. Although the Sponsor believes that the expectations reflected in such forward-looking statements are reasonable, they do involve a number of assumptions, risks and uncertainties. Accordingly, neither the Sponsor nor any of its affiliates makes any express or implied representation or warranty, and no responsibility is accepted with respect to the adequacy, accuracy, completeness or reasonableness of the facts, opinions, estimates, forecasts, or other information set out in this Presentation or any further information, written or oral notice, or other document at any time supplied in connection with this Presentation, and nothing contained herein or in the Disclosure Document shall be relied upon as a promise or representation regarding any future events or performance. Past returns from investment in real estate (or real estate related investments) are no guarantee that the same (or enhanced) returns from real estate (or real estate related investments) will be achieved in the future.

− The recipient’s attention is specifically drawn to the risk factors identified by the Sponsor relating to the Opportunity as set out in the Disclosure Document or any other documents provided to the recipient. The Sponsor also advises that the potential investment described herein is speculative, involves a degree of risk and there is no guarantee of performance or a return of any capital with respect to any investment.

− By accepting delivery of this Presentation, the recipient accepts the terms of this notice and agrees, upon request, to return all materials received by the recipient from the Sponsor, including this Presentation without retaining any copies thereof.

Notice and Disclaimer

Appendix: Performance Notes & Disclaimer 39

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