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Top Down Research Inputs

TOP DOWN RESEARCH PROCESS OVERVIEW. CSF Model. Global Economic Outlook Report. PETS Model. COUNTRY ANALYSIS Country Templates, Country Barons. QUANTIFYING REAL ESTATE Country Balance Sheet Analysis, Corporate Real Estate (CRE). GLOBAL METRO MODEL Place Atlas Map. COUNTRY MODEL

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Top Down Research Inputs

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  1. TOP DOWN RESEARCH PROCESS OVERVIEW CSF Model Global Economic Outlook Report PETS Model COUNTRY ANALYSIS Country Templates, Country Barons QUANTIFYING REAL ESTATE Country Balance Sheet Analysis, Corporate Real Estate (CRE) GLOBAL METRO MODEL Place Atlas Map COUNTRY MODEL Growth & Risk THEMES RESEARCH Capital Flows, Globalization SECTOR MODELS Housing, Infrastructure Country/Metro wise Scores and Ranks (Monthly, Quarterly, Yearly) Sector Growth Projections. GDP Growth Projections Sector Outlook Historical & Forecasted Trend & Recommendations for Investing Country Analysis Stock Summary LOP Analysis KD Allocations Top Down Research Inputs

  2. Implementation to Provide Investors Unavailable Investing Opportunities and Investment Outcomes Implementation to Provide Investors with Heretofore Unavailable Investing Opportunities and Investment Outcomes • World class organization and investment team • Not solo effort: currently 42 savvy, sophisticated investment professionals: PhDs, CFAs, MBAs, CPAs • Roulac Global Research Council: 10 leading property scholars and researchers • Roulac Global Funds Advisory Board: 5 savvy experienced investment professionals • Portfolio Management Team: 5 senior investment professionals possessing diverse expertise and experience, with 20+ years working relationship • Research Team: Composed of the best/brightest 71 investment analysts, economic analysts, place analysts, data analysts, systems analysts and programmers • Our investment implementation is cost effective – efficient – smart • Strategic, systemized, model-driven portfolio management • Emphasis on team, systems, collaboration • Decisions fundamentally and systematically implemented • Continual evolution to advance our work • Investors benefit from more and more intense research

  3. Roulac Global Research Strategy and Research Team Represent Significant Competitive Advantage Dedicated Staff Located in Distinctive Places Differentiated Research Strategy • Links academic and professional style • Collaborative relationships with leading scholars throughout the world • Place Strategy implementation • Global collaborations • Access to academic network • Hire best and brightest research professionals • English language facility • Implement application of place innovations we champion • Desirable cost/value relationship Multiple Advantages of Global Place Strategy for Research • Attract superior talent/intellect • Apply global perspective • 24-hour staffing • Gain 1-day lead time on competition, based in same time zone: response at beginning of day to work initiated at end of prior day.

  4. Geographic Portfolio Allocation

  5. Portfolio Allocation by Sector

  6. Comparative Sharpe Ratios

  7. ALPHA Generated At All Levels Hong Kong Index (Hang Seng Index) Return: 187.27% ALPHA Generated for Selection of Best Sector 1157.95% Inputs From Country Template In 2003, with increasing incomes, rural urban migration, housing demand rose further. Rising economic development, incomes and living standards brought momentum to the Housing market. Inputs From Country Template Primary Theme for China & Hong Kong was China Growth and Globalization. China's GDP was growing at an average rate of 9% in 2003 and significant. Hong Kong Index Home Builders Return: 1345.22% Inputs From Lords of Property & Financial Measure Report Hopson had a very low P/E ratio of 4.39 times in fiscal 2003 as compared to the industry average of 12.80. Five year Revenue CAGR of 34% (1998-2002) and with strong growth outlook in the years to come. Better Profit Margin of 21% as compared to Global Benchmark of 14% . ALPHA Generated for Selection of Best Stock 629.36% Inputs From Global Metro Model Hopson’s Revenue comes from following Chinese metros which feature at the few TOP Metros with high Growth Potential Guangzhou - 48.87%, Beijing - 31.40%, Shanghai - 9.62%, Tianjin - 10.10% Hopson Development Holdings Ltd.: 1974.58% Note: The Returns are cumulative and calculated for the period of July 2003 – September 2007

  8. Style Analysis RGPF is a value based fund with bias towards large cap.

  9. Daily Reports • Examples • Daily Portfolio Monitoring Report • Daily Market Monitoring Report • Daily Reports • Examples • Daily Portfolio Monitoring Report • Daily Market Monitoring Report • Daily Reports • Examples • Daily Portfolio Monitoring Report • Daily Market Monitoring Report • Daily Reports • Examples • Daily Portfolio Monitoring Report • Daily Market Monitoring Report Economics Team Economics Team Economics Team • Weekly Reports • Examples • Portfolio Performance Report • Market Performance Report • Weekly Reports • Examples • Portfolio Performance Report • Market Performance Report • Weekly Reports • Examples • Portfolio Performance Report • Market Performance Report • Weekly Reports • Examples • Portfolio Performance Report • Market Performance Report Investment Team Investment Team Investment Team • Monthly Reports • Examples • Roulac India Economic Report • Roulac Global Report Portfolio Team Portfolio Team • Quarterly Reports • Examples • Quarterly Investor presentation Updates • Quarterly Performance Report • Quarterly Reports • Examples • Quarterly Investor presentation Updates • Quarterly Performance Report • Portfolio review Report ROULAC Team Effort !!!

  10. Daily Monitoring Report • INPUTS • Daily and Weekly Stock Returns Movement analysis • Daily and weekly News analysis for country and stock levels. • Sector and country level analysis. • Comparative analysis with different benchmarks. OUTPUTS • Stock/Sector Reviews • Sell and Buy Recommendation • Fund Composition Analysis. • Stock Level Attribution. • Dynamic Target Allocation Weekly Monitoring Report Weekly Monitoring Report Monthly Monitoring Report Monthly Monitoring Report Portfolio Monitoring Process

  11. Stock Analysis Process DCF valuation model The underlying idea of DCF-Valuation is to compute the fair value of a company and juxtapose it against the current share price thereby make investment decision based on results of this comparison Scenario Analysis We determine the ROI projections for 1, 2, 3, 4 and 5 years. ROIs for 3 scenarios • Best case scenario • Base case scenario • Worst case scenario ROI Projection Estimated PE of the stock in the 1st, 2nd, 3rd, 4th and the 5th year. Gordon model is used which takes into account Local risk free rate, risk premium, horizon growth rate and payout ratio. For all 5 years • Qualitative analysis • We analyze every company from the point of view of : • Business strategy • Distinctive competence • Geographical scope • Growth strategy • Country and market attributes • Critical success factors • Risk Premium Calculation • We calculated various Risks involved with a company namely: • Political Risk • Financial Risk • Economic Risk • Operational risk • We derive Standardized total risk rating which in turn is used in calculation of Adjusted cost of equity which would be used as discount rate. Management Communication process Management of every company that we analyzed is contacted to gather exclusive information and same is documented. Weights are assigned to various factors involved in each of the Risks in calculating a Total Risk which is used to calculated a Total Score Long-short Pair The underlying idea is to optimally hedge our stocks to give positive returns in all market conditions. If markets are experiencing an upward trend then long stock will generate better returns than the short stock and if there is a downward trend then short stock will generate better returns than the long stock thus maintaining positive returns in all market scenarios .

  12. REIT Analysis • REIT stock • Valuation of a REIT stock depends on FFO , future prospects and properties appreciation. • Valuation of non-REIT stock is done through following models: • NAV-based Pricing Model • Estimation of marked-to-market asset value • Value of the operating Real Estate • Calculate 12-month look-forward estimate of NOI • Appropriate cap rate is determined • Value of the operating Real Estate = NOI/Cap rate • Estimation of marked-to-market liabilities. • NAV is calculated by subtracting liabilities from assets. • If the NAV per share is higher than the current stock price, there lies a opportunity.   • Financial Ratios • Fund from operation (FFO) is taken into consideration while analyzing various Profitability ratios and price ratios. Non-REIT stock Valuation of non-REIT stock depends on Net earnings and future prospects Valuation of non-REIT stock is done through following models: DCF valuation model The underlying idea of DCF-Valuation is to compute the fair value of a company and juxtapose it against the current share price thereby make investment decision based on results of this comparison DDM valuation model The model calculates the present value of the future dividends that a company is expected to pay to its shareholders. The DDM is also useful because the measurement of future dividends (as opposed to earnings for example) facilitates close comparison of companies across different industries by focusing on the actual cash investors can expect to receive. Financial Ratios Net income is taken into consideration while analyzing various Profitability ratios and price ratios.

  13. Country Growth Models Genius Rating Country Selection Creativity Rating By using Growth models we select countries that have good growth potential Risk models suggests us to select the countries that have low risk Country Risk Models Infrastructure Rating Creativity Rating Environmental Sustainability Sovereign Rating Economic Investment Index Sector Selection Environmental Sustainability By using Risk models we can analyze the level of risk associated with sectors Compelling Place Rating In selected countries sub models of Growth suggests the sectors that have promising prospect Economic Investment index External Orientation Rating External Orientation Rating Knowledge Resource Rating Corporate presence rating Corporate Presence Rating Stock Selection Financial Center Rating At stock level we select the stocks with low levels of risk Development Rating Finally we select the stocks with high return from the prospected sectors Technological Center Rating Regulatory Environment Index Development Rating Inputs From Country Model For Identifying Top Countries/Sectors/Stocks

  14. Responsibility Integrity,trust, reliability characterize our every action and interaction Work Life Balance Work seamlessly across time and place to balance life/work/competing expectations Teamwork Be a positive, helpful and energetic leader and team player STAKEHOLDER SATISFACTION Deliver ALPHA RETURN to our stakeholders in financial, cultural and personal currencies Quality = Excellence Be the best through commitment, excellence and intentionality, as we manifest flow in every aspect of our work Learning & Discovery Aim for continuous learning and innovation on this great voyage of discovery Interdependent Roulac Global Values Inform Investing Process & Contribute To Alpha Returns MAKE A DIFFERENCE Leave the world a better place

  15. Real estate enhances risk-adjusted portfolio performance plus provide significant diversification benefits Prosperity creates need for property goods and services Real estate is best way to participate in growth and prosperity of leading/emerging countries Technology advances and political reform transform global economy Traditional leading economies’ threatens leadership position Growth of emerging global players leads to market share gains Prudent Investing = International Real Estate in Portfolio

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