real estate (vcmix) real assets (vcrrx) · timberland. farmland. infrastructure. real estate. firm...

December 2019

Real Estate (VCMIX)Real Assets (VCRRX)

W W W . V E R S U S C A P I T A L . C O M FOR USE WITH INVESTMENT PROFESSIONALS ONLY NOT FOR USE WITH THE INVESTING PUBLIC. NOT FOR DISTRIBUTION

1 “Real Returns” defined as total returns adjusted for the effects of inflation.

TIMBERLAND

FARMLAND

INFRASTRUCTURE

REAL ESTATE

Firm Overview

Firm Description• Boutique investment manager based in Denver, CO

• Specialize in private & public real assets investing

• $4.7 Billion in assets across two interval funds (VCMIX/VCRRX)

• Client Focus on RIAs, private banks and institutional consultants

Firm Objectives• Provide access to institutional private real assets

• Simplified ownership via interval fund structure

• Broad exposure to private & public markets, equity & debt

• Attractive real returns1 with low correlation to traditional asset classes

Investment Focus• Private Real Estate

• Private Infrastructure

• Private Farmland

• Private Timberland

• Public Real Assets

For Investment Professional Due Diligence Use Only 2

Real Assets Fund

Fund Summary

Ticker

Fund AUM as of 12/31/19

Structure

VCRRX

$1.662 Billion

Interval Fund

Private PortfolioExposure

Infrastructure Equity/Debt, Farmland, Timberland

Public PortfolioExposure

Infrastructure Equity/Debt, Ag & Timber Equity, TIPS

Fund Structure Details

Fund Investment Details

Real Estate Fund

VCMIX

$3.018 Billion

Interval Fund

Core, Core Plus, Foreign, Debt

REITs, REIT Preferreds, REIT Debt, CMBS

1 Reported as of 9/30/19 semi-annual Report. Net expense ratio does not include private REIT, private sub-account vehicle and private acquired fund fees and expenses which are estimated to be 0.65% for VCMIX and 0.78% for VCRRX as of the 8/9/19 and 7/24/19 prospectuses.

Net Expense Ratio1 1.32%1.20%

Target Portfolio Allocation 75% Private / 25% Public70% Private / 30% Public


Global Investment Universe

Source: JP Morgan 2018, WFE 2018, LaSalle ISA 2018, McKinsey GI 2016, Hancock 2017, Versus Capital 2018

Global Market Overview

Global Fixed Income$106T / 34%

Global Equities$87T / 28%

Global Real Assets$115T / 37%


Private Real Estate Index

Private Timberland Index

Private Real Assets Index Blend

Private Infrastructure Index

US Equity

60% US Equity – 40% US Bonds

Private Farmland Index

US Bonds

Standard Deviation

Private real assets have historically generated more return with less risk than a 60/40 portfolio.

Source: Versus Capital Research, Morningstar Direct, NCREIF, JP Morgan, MSCI. Note: Pricing methodologies for private real assets indices and public market indices differ. Private real assets use a quarterly appraisal-based methodology while public indices use public market auction-based methodologies. The quarterly appraisal-based methodology of private real assets may result in a lack of price transparency as compared to public market Indices. Private real assets investments may also have higher costs and less liquidity than the other investments represented. Past performance is no guarantee of future returns. See page 28 for index descriptions.

Trailing Risk-Reward Chart (1/1/1993 - 12/31/2018)A

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Trailing Performance Statistics: Time Period: 1/1/1993 to 12/31/2018

RETURN STD. DEV SHARPE RATIO BETA R2MAX

DRAWDOWN

Private Real Estate Index 9.4 4.2 1.7 0.1 3.3 -24.1

Private Infrastructure Index 13.1 7.3 1.4 0.0 0.1 -12.4

Private Farmland Index 11.7 6.3 1.4 0.1 1.4 -0.0

Private Timberland Index 7.6 5.1 1.0 0.0 0.1 -6.5

US Equity 9.1 15.8 0.5 1.7 97.8 -45.8

US Bonds 5.1 3.7 0.7 0.0 0.6 -3.9

Private Real Assets Index Blend 10.2 3.1 2.4 0.1 3.2 -9.9

60% US Equity–40% US Bonds 7.8 9.3 0.6 1.0 100.0 -27.7

Private Real Estate Index

Private Infrastructure Index

Private Farmland Index

Private Timberland Index

US Equity

US Bonds

Private Real Assets Index Blend

60% US Equity–40% US Bonds

High Risk-Adjusted Returns & Low Correlation

Sharpe Ratio


Source: Versus Capital Research, Morningstar Direct, NCREIF, JP Morgan, MSCI. Note: Pricing methodologies for private real assets indices and public market indices differ. Private real assets use a quarterly appraisal-based methodology while public indices use public market auction-based methodologies. The quarterly appraisal-based methodology of private real assets may result in a lack of price transparency as compared to public market Indices. Private real assets investments may also have higher costs and less liquidity than the other investments represented. Past performance is no guarantee of future returns. See page 28 for index descriptions.

Core Real Estate Characteristics

• Top 20 Metropolitan Markets

• High Quality/Stabilized Assets

• Barriers to entry for building new supply

• Income Oriented Returns

• Low Leverage (

Infrastructure Market Characteristics

• Natural monopolies with barriers to entry

• Royalty stream on economic growth & inflation

• Potential for high cash generation with relatively predictable cash flows

• Acceleration of privatization and lack of public funding

Private Infrastructure Description

Transport Utilities CommunicationsRenewable

Power

Toll RoadsElectricity

TransmissionBroadcast

TowersHydroelectric

Power

Airports Gas DistributionWireless Towers

Wind

SeaportsWater

DistributionFiber/Wireline

NetworksSolar

RailwaysWastewater

CollectionData Centers Geothermal

FCF Yield

Inflation Escalators

Organic Growth /Structural Drivers

Leverage Effect

Potential Total Return Profile Buildings Blocks

Types of Infrastructure Assets

Source: Versus Capital Research. For Investment Professional Due Diligence Use Only 8

Farmland Market Characteristics

• Highly fragmented market with minimal Inst penetration

• Less than 1% of US Farmland trades hands annually

• Farm / Yield Productivity has historically increased ~2% annually1

• Population growth and reduction in arable land as strong secular trends

Private Farmland Description

Row Crops Permanent Crops

Corn Vegetables Almonds Wine Grapes

Soybeans Wheat Walnuts Cranberries

Cotton Potatoes PistachiosMacadamia

Nuts

Rice Apples

Income

Inflation of Land Value

Productivity Growth

Crop Price Growth


Types of Farmland Assets

1 US Agriculture, USDA Economic Research Service as of October 2016. For Investment Professional Due Diligence Use Only 9

Timberland Market Characteristics

• Biological Growth has been significant (5% - 7% p.a.)1

• Tree Growth uncorrelated to traditional markets

• Harvesting timeline provides ‘optionality’

• Has been positively correlated to Inflation

Private Timberland Description

Pulpwood SoftwoodCommodity Hardwood

Precious Hardwood

PaperBuilding

MaterialsBuilding

MaterialsFurniture

Packaging Materials

Remodeling

Income from Harvesting

Misc. Income & Land Sales

Inflation of Land Value

Biological Growth


Types of Timberland Assets

1 Forest Inventory and Analysis Program Data, Forest Service, Department of Agriculture,1953 - 2015. GMO, 2016. For Investment Professional Due Diligence Use Only 10

Manager Selection

Asset Allocation

Private/ Public Mix

Lever #1

Lever #2

Lever #3Cap Rate, NOI Growth, Property Type, Geographic Concentrations

Underlying Portfolio Analysis

Queues, Acquisition Pipelines, Monthly/Quarterly Capital Calls

Capital Deployment Timing

Target Position of 8% – 15% and 2.5% – 5%

Diversification Rules (50/50 Test)

45% – 65%

Core

5% – 15%

Core Plus

0% – 15%

Foreign Core

5% – 15%

Debt

20% – 40%

Public Equity/Debt

Real Estate Market Segment Allocation Ranges

Market Cycle Analysis + Relative Value Assessment

60% – 80%

Private

20% – 40%

Public

Private / Public Allocation Ranges

Capital Raising Expectations + Near-Term Return & Volatility

Real Estate Fund (VCMIX): Investment Process



• $133 Billion in Gross Asset Value

• 1,521 Institutional Investments

• 94.1% Weighted Avg. Occupancy Level

• 26.2% Weighted Avg. Leverage Ratio

Private Core Funds 47.3%

Clarion Lion Property Fund 8.2%

Heitman America Real Estate Trust 7.1%

RREEF America REIT II 7.5%

LaSalle Property Fund 7.1%

AEW Core Property Trust 6.3%

Invesco Core Real Estate Fund 4.3%

CBRE Core Partners Fund 3.8%

Barings Core Property Fund 1.7%

UBS Trumbull Prop. Fund 1.3%

Private Core Plus Funds 12.5%

Harrison Street Core Prop. Fund 4.1%

USAA US Gvt. Building Fund 3.4%

Clarion Gables Multifamily Trust 3.4%

AEW Value Investors U.S. 0.9%

EverWest US Property Fund 0.8%

Private Foreign Core Funds 6.3%

Invesco Real Estate Asia 3.7%

Barings European Core Property 2.6%

Private Debt Funds 11.7%

UBS Trumbull Prop. Income Fund 3.8%

Heitman CREDIT Fund 3.7%

Mesa West Core Lending Fund 2.4%

MetLife CM Income Fund 1.7%

Public RE Equity & Debt 22.2%

Security Capital Liquid Core 7.9%

Principal Global Income 14.3%

Private Portfolio Highlights

Real Estate Fund (VCMIX): Asset Allocation & Investments1

1 Asset Allocation & Manager Line-Up as of 1/1/20. Allocations are subject to change and may include uninvested cash held by an underlying manager, committed to pending capital calls, or held as liquidity for upcoming distributions or tender offers of the Fund.For Investment Professional Due Diligence Use Only

Core Property Types

86.9%

13.1%Diversified Property Types

Property Type Allocation

Real Estate Fund (VCMIX): Private Portfolio Exposures1

1 Property Type & Geographic Allocation as of 1/1/20. Subject to change.

Geographic Allocation

Midwest9.6%West

33.6%East

29.2%

South19.5%

Europe3.3%

Asia-Pac4.8%


30.9%

25.7%

14.5%15.8%

3.9% 3.1%2.0% 1.3% 1.5% 1.4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Office Multifamily Retail Industrial Medical Office Self Storage Senior Housing Student Housing Hotel Other

Chart1

OfficeMultifamilyRetailIndustrialMedical OfficeSelf StorageSenior HousingStudent HousingHotelOther0.308920618580487310.256945041815108410.145134681350225560.157714040985664383.8612833498713944E-23.0798373016393849E-21.9642599785198736E-21.3308034180575244E-21.4571856622237424E-21.4351920165395052E-2

Global Market

Global Fixed IncomeGlobal EquitiesGlobal InfrastructureGlobal Real EstateFarmlandTimberland

Global Fixed Income$ 103.0

Global Equities$ 64.0

Global Real Assets$ 355.0$ 53.0$ 3.5$ 2.5

Total Market59

Public Market4.88%

Private Market54.292%

Private Market xlarger11.292

unepinquiry.org/wp-content/uploads/2015/12/The_Value_of_Everything.pdf

LaSalle ISA 2019

Global Fixed IncomeGlobal EquitiesReal EstateInfrastructureFarmlandTimberland

Global Fixed Income$ 106$ 106.034%

Global Equities$ 87$ 87.028%

Global Real Assets$ 59$ 53$ 3.5$ 1.6$ 116.638%

LaSalle ISA 2019Global Infrastructure 70% of world GDP$ 309.6

U.S. High Yield BondsUS. Bank LoansEmerging Market BondsUS Small Cap EquitiesEmerging Market EquitiesU.S. MLPsGlobal Real Assets

Global Fixed Income1.50.922.03.410.40.4$ 39

Global Real Assets$ 115

(219,200,0)

(0,45,86)

(39,170,191)

(12,128,163)

(16,92,150)

(24,65,76)

Global Fixed IncomeGlobal Fixed IncomeGlobal EquitiesGlobal Real Assets103Global EquitiesGlobal Fixed IncomeGlobal EquitiesGlobal Real Assets64Global InfrastructureGlobal Fixed IncomeGlobal EquitiesGlobal Real Assets355Global Real EstateGlobal Fixed IncomeGlobal EquitiesGlobal Real Assets53FarmlandGlobal Fixed IncomeGlobal EquitiesGlobal Real Assets3.5TimberlandGlobal Fixed IncomeGlobal EquitiesGlobal Real Assets2.5

Estimated Value (Trillions USD)

Global Fixed IncomeGlobal Fixed IncomeGlobal EquitiesGlobal Real Assets106Global EquitiesGlobal Fixed IncomeGlobal EquitiesGlobal Real Assets87Real EstateGlobal Fixed IncomeGlobal EquitiesGlobal Real Assets59InfrastructureGlobal Fixed IncomeGlobal EquitiesGlobal Real Assets52.5FarmlandGlobal Fixed IncomeGlobal EquitiesGlobal Real Assets3.5TimberlandGlobal Fixed IncomeGlobal EquitiesGlobal Real Assets1.6

Estimated Value (USD Trillions)

U.S. High Yield BondsGlobal Fixed IncomeGlobal Real Assets1.5US. Bank LoansGlobal Fixed IncomeGlobal Real Assets0.873Emerging Market BondsGlobal Fixed IncomeGlobal Real Assets22US Small Cap EquitiesGlobal Fixed IncomeGlobal Real Assets3.4180000000000001Emerging Market EquitiesGlobal Fixed IncomeGlobal Real Assets10.4U.S. MLPsGlobal Fixed IncomeGlobal Real Assets0.377Global Real AssetsGlobal Fixed IncomeGlobal Real Assets114.6

Estimated Value (USD Trillions)

Charts

Standard DeviationAnnualized ReturnHexWebsite/PresentationRGBPage 6RGBRETURNSTD. DEVSHARPE RATIOBETAR2MAX DRAWDOWN

Private Real Estate Index49YellowDBC800(219,200,0)80.211.2559.44.21.650.13.3-24.1

Private Infrastructure Index713Navy002D56(0,45,86)219.200.013.17.31.370.00.1-12.4

Private Farmland Index612Cyan27AABF(39,170,191)13.127.16311.76.31.390.11.4-0.0

Private Timberland Index58Turquoise0C80A3(12,128,163)180.231.2417.65.11.040.00.1-6.5

US Equity169Liberty105C96(16,92,150)17.92.1509.115.80.481.797.8-45.8

US Bonds45Prussian Blue18414C(24,65,76)24.65.775.13.70.70-0.00.6-3.9

Private Real Assets Index Blend310(80,211,255)235.214.7510.23.12.400.13.2-9.9

60% US Equity - 40% US Bonds98(235,214,75)39.170.1907.89.30.591.0100.0-27.7

Public RE Debt11.8%(24,65,76)Public RA Debt2.3%

Public RE Equity10.4%(16,92,150)Public RA Equity19.8%

Private Debt Funds11.7%(12,128,163)Private Timberland19.8%

Private Foreign Core Funds6.3%(39,170,191)Private Farmland19.8%

Private Core Plus Funds12.5%(0,45,86)Private Infrastructure Debt15.6%

Private Core Funds47.3%(219,200,0)Private Infrastructure Equity22.7%

Total100.0%Total100.0%

Office30.9%

Multifamily25.7%

Retail14.5%

Industrial15.8%

Medical Office3.9%

Self Storage3.1%

Senior Housing2.0%

Student Housing1.3%

Hotel1.5%

Other1.4%

VCMIX Sharpe RatioVCRRX Sharpe Ratio

Versus Capital Real Estate Fund3.35(219,200,0)Versus Capital Real Estate Fund1.03(219,200,0)6.581.763.364.002.310.90

Real Estate Index0.66(0,45,86)Real Estate Index0.51(0,45,86)6.658.920.673.315.370.26

BBgBarc US Agg Bond Index0.64(39,170,191)BBgBarc US Agg Bond Index0.64(39,170,191)2.763.080.684.242.950.79

MSCI ACWI Index0.92(12,128,163)MSCI ACWI Index0.65(12,128,163)9.6610.820.835.5111.020.33

Credit Suisse Liquid Alternatives Index0.65(16,92,150)Credit Suisse Liquid Alternatives Index0.06(16,92,150)3.124.050.601.364.28-0.13

0.671.92

LNG Terminals & Liquefaction Fac14.7%29.9%

Power Generation & Renewables9.0%18.4%

Utilities3.5%7.2%

Transportation7.8%15.9%

Communications, Social, Water14.0%28.6%

Row Crops17.7%69.7%

Specialty Crops5.1%20.0%

Permanent Crops2.6%10.3%

Softwoods21.3%83.7%

Hardwoods4.1%16.3%

100.0%300.0%

Private Infra49.1%38.3%

Private Farm25.5%19.8%

Private Timber25.4%19.8%

100.0%77.9%

4.27.36.35.0915.83.723.129.319.3913.0511.77.639.075.0910.157.75

1.651.371.391.040.480.72.40.59

Public RE DebtPublic RE EquityPrivate Debt FundsPrivate Foreign Core FundsPrivate Core Plus FundsPrivate Core Funds0.11763217467983540.10420228424103070.116760616652538996.3224604082413219E-20.125261685380847170.47291863496333442

OfficeMultifamilyRetailIndustrialMedical OfficeSelf StorageSenior HousingStudent HousingHotelOther0.308920618580487310.256945041815108410.145134681350225560.157714040985664383.8612833498713944E-23.0798373016393849E-21.9642599785198736E-21.3308034180575244E-21.4571856622237424E-21.4351920165395052E-2

3.3477636348581310.664739435865671410.640751307579039420.920179727002076290.64683508688097047

Public RA DebtPublic RA EquityPrivate TimberlandPrivate FarmlandPrivate Infrastructure DebtPrivate Infrastructure Equity2.2775250304465627E-20.197768080054127190.198132880037367430.198420249380765130.156272683815967480.22663085640730715

LNG Terminals & Liquefaction FacPower Generation & RenewablesUtilitiesTransportationCommunications, Social, WaterRow CropsSpecialty CropsPermanent CropsSoftwoodsHardwoods0.147025450363929619.0465914675555814E-23.5137897410200888E-27.7936581111087491E-20.140478224880244220.177396868295614575.0837645991186335E-22.6327743127776547E-20.212857973260047744.1357024503337503E-2

1.02551551260072120.506108605761437570.643097563962938050.651724945446605755.6422234657761923E-2

Occupancy

Quarter-EndOccupancy

3/31/8889.6%

6/30/8889.5%

9/30/8889.2%

12/31/8888.3%

3/31/8988.1%

6/30/8987.2%

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3/31/9489.7%

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3/31/0691.4%

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3/31/0791.9%

6/30/0792.2%

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3/31/0892.0%

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9/30/1390.7%

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3/31/1693.0%

6/30/1693.2%

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3/31/1792.9%

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12/31/1793.6%

3/31/1893.5%

6/30/1893.7%

9/30/1894.2%

12/31/1894.0%

3/31/1993.8%

6/30/1994.3%

Occupancy36433365253661636707367993689136981370723716437256373463743737529376213771137802378943798638077381683826038352384423853338625387173880738898389903908239172392633935539447395383962939721398133990339994400864017840268403594045140543406334072440816409084099941090411824127441364414554154741639417294182041912420044209442185422774236942460425514264342735428254291643008431004319043281433734346543555436460.939099999999999930.938300000000000020.939400000000000010.941200000000000040.943700000000000090.942900000000000070.941100000000000050.938499999999999890.931899999999999950.925199999999999910.918199999999999910.909699999999999950.904800000000000050.897399999999999980.891199999999999990.889599999999999950.89110.891700000000000050.887800000000000030.894300000000000090.897499999999999960.898799999999999930.90020.906399999999999980.909699999999999950.912600000000000080.914300000000000110.917699999999999960.91940.919200000000000020.919099999999999920.921599999999999970.922800000000000060.920100000000000030.919599999999999970.916800000000000060.908100000000000020.905499999999999970.900100000000000010.892499999999999960.889000000000000010.885400000000000080.883000000000000010.897800000000000040.882300000000000080.882900000000000020.878299999999999970.882900000000000020.886599999999999940.889500000000000070.889599999999999950.895699999999999940.900600000000000070.898599999999999950.899500000000000080.902499999999999970.907099999999999910.905499999999999970.906100000000000020.911700000000000070.918399999999999990.918700000000000070.919000000000000040.923900000000000050.928700000000000080.928599999999999980.930100000000000040.931800000000000070.931899999999999950.931899999999999950.929300000000000010.932200000000000030.933799999999999960.93550.935000000000000050.937200000000000030.941699999999999980.940.938300000000000020.94319999999999993

30.9%

25.7%

30.0%

35.0%

Trailing Performance Statistics

As of 12/31/19 MTD YTD 1 Year 3 Year 5 YearSince

Inception(7/9/2012)1

Standard Deviation

Versus Capital Real Estate Fund (Net) 0.39% 6.52% 6.52% 5.73% 6.39% 6.53% 1.74%

Real Estate Index 0.25% 18.84% 18.84% 6.51% 4.81% 6.59% 8.85%

BBgBarc US Agg Bond Index -0.07% 8.72% 8.72% 4.03% 3.05% 2.69% 3.10%

MSCI ACWI Index 3.52% 26.60% 26.60% 12.44% 8.41% 10.58% 10.74%

Credit Suisse Liquid Alternatives Index 0.89% 8.05% 8.05% 2.55% 2.36% 3.29% 4.00%

Versus Capital Real Estate Fund

Real Estate Index

BBgBarc US Agg Bond Index

MSCI ACWI Index

CS Liquid Alternatives Index

Sharpe Ratio

Real Estate Fund (VCMIX): Performance Highlights

Past performance does not guarantee future results. The performance data quoted represents past performance and future returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Quoted performance is net of the Fund’s fees and expenses. 1The Fund became effective on December 9, 2011 with a single class of common shares, however, the Fund’s cash was not actively invested until July 9, 2012. The common shares were redesignated as F Shares upon the launch of the I Share class on July 10, 2012. On January 29, 2018, all F Shares were exchanged for I Shares and all I Shares were redesignated as common shares. See page 28 for index descriptions. For Investment Professional Due Diligence Use Only 14

Manager Selection

Asset Allocation

Private/ Public Mix

Lever #1

Lever #2

Lever #3Cash Yields, Growth Rates, Sector Allocation, Geographic Mix

Underlying Portfolio Analysis

Queues, Acquisition Pipelines, Monthly/Quarterly Capital Calls

Capital Deployment Timing

Target Position of 8% – 15% and 2.5% – 5%

Diversification Rules (50/50 Test)

5% – 15%

Infrastructure

Equity

5% – 15% 15% – 35% 15% – 35% 15% – 35%

Real Asset Market Segment Allocation Ranges

Market Cycle Analysis + Relative Value Assessment

65% – 85%

Private

15% – 35%

Public

Private / Public Allocation Ranges

Capital Raising Expectations + Near-Term Return & Volatility

Real Assets Fund (VCRRX): Investment Process

Infrastructure

Debt

Farmland Timberland Public Equity/Debt



• $64 Billion in Gross Asset Value

• 638 Institutional Investments

• 8 Private Market Sectors

• 12.5% Weighted Avg. Leverage Ratio

Private Infrastructure Equity 20.6%

Harrison Street – Infrastructure Fund 9.6%

JP Morgan – Infrastructure Fund 3.4%

First State - Global Infrastructure Fund 2.4%

IFM Investors - Infrastructure Fund 3.2%

AMP Capital - Infrastructure Trust 1.5%

Blackstone – Infrastructure Fund 0.5%

Private Infrastructure Debt 13.9%

Infrastructure Debt Co-Invest Portfolio 9.2%

IFM Investors – Infrastructure Debt A/C 2.3%

AMP Capital - Infrastructure Debt Fund 1.5%

IFM Investors - Infrastructure Debt Fund 0.9%

Private Farmland 23.1%

Ceres Farms Fund 7.1%

US Agriculture - US Farmland Fund 4.9%

UBS – AgriVest Farmland Fund 3.1%

Direct Farmland Investment Account 5.7%

IFC – Core Farmland Fund 1.2%

Hancock – Farmland/Timberland Fund 1.1%

Private Timberland 19.8%

BTG Pactual - US Timberland Fund 9.7%

RMS - Evergreen US Forestland Fund 4.9%

Jamestown – Timberland Fund 4.1%Hancock – Farmland/Timberland Fund 1.1%

Public Real Assets Equity & Debt 22.6%

Brookfield Public Real Assets Portfolio 14.6%

Lazard Public Real Assets Portfolio 7.9%

Private Portfolio Highlights

Real Assets Fund (VCRRX): Asset Allocation & Investments1

For Investment Professional Due Diligence Use Only

1 Asset Allocation & Manager Line-Up as of 1/1/20. Allocations are subject to change and may include uninvested cash held by an underlying manager, committed to pending capital calls, or held as liquidity for upcoming distributions or tender offers of the Fund.

1 Sector & Geographic Allocation as of 1/1/20. Subject to change.

Real Assets Fund (VCRRX): Private Portfolio Exposures1

Infrastructure Allocation Farmland & Timberland Allocation


Infrastructure Equity & Debt44.6% Farmland29.9% 25.5%Timberland

Americas75.8%

Europe15.1%

Asia-Pac9.1%

Midwest28.4%West

21.6%East8.1%

South41.9%

Sector Allocation

Trailing Performance Statistics

As of 12/31/19 MTD YTD 1 Year 3 Year 5 YearSince

Inception(9/18/17)

Standard Deviation

Versus Capital Real Assets Fund (Net) 0.94% 8.50% 8.50% --- --- 4.19% 2.23%

Real Assets Index 3.44% 16.03% 16.03% --- --- 4.55% 5.23%

BBgBarc US Agg Bond Index -0.07% 8.72% 8.72% --- --- 3.84% 3.02%

MSCI ACWI Index 3.52% 26.60% 26.60% --- --- 8.90% 10.74%

Credit Suisse Liquid Alternatives Index 0.89% 8.05% 8.05% --- --- 2.13% 4.12%

Versus Capital Real Assets Fund

Real Assets Index

BBgBarc US Agg Bond Index

MSCI ACWI Index

CS Liquid Alternatives Index

Sharpe Ratio

Real Assets Fund (VCRRX): Performance Highlights


Past performance does not guarantee future results. The performance data quoted represents past performance and future returns may be lower or higher. Total return figures include change in share price, reinvestment of dividends and capital gains. The investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Quoted performance is net of the Fund’s fees and expenses. See page 28 for index descriptions.

Real Estate Market Update

Demand• Slower, but sustained economic growth have remained a

tailwind for real estate demand and space usage

• Occupancy has remained high and stable across property types, as well as regions/sub-markets

• Trade war with China has been minimally impactful

Supply• Increasing land, labor and materials costs are making the

development of new assets more difficult globally

• Domestic supply growth remains below historical averages

• European markets have a dearth of supply in key markets

• Asian markets are roughly in-balance

Capital Markets• Cap rate spread to Treasuries has remained above historical

averages at ~300+ bps

• Commercial real estate transaction volumes have been strong year-to-date with $600B in domestic activity expected in 2019

Commercial Real Estate Supply Growth

Commercial Real Estate Occupancy

Source: Versus Capital Research, Barings Real Estate, NCREIF. For Investment Professional Due Diligence Use Only 19

Infrastructure Market Update

Infrastructure Investment Requirement• McKinsey Global Institute estimates $57 trillion in global

infrastructure investment will be required between 2013 –2030, or approximately $3.3 trillion per year

• Available dry powder and investment capital is far below these levels which may lead to robust transaction activity for many years

Investment Themes• 2019 transaction activity has remained elevated with

multiple $500M - $10B size deals closing this year

• Globally, completed deals have been wide ranging; rail, containers, gas-related, ports, heating, water, etc.

• Telecom (data centers, tower, fiber) assets have been in high demand due to the roll-out of 5G and increased data needs

Asset Operations & Institutional Allocations• Underlying asset operations have been in-line with

expectations and often ahead-of-budget in 2019

• Institutions have continued to increase their allocations to the private infrastructure sector

Private Infrastructure Deal Volume

Institutional Investor Alternatives Allocation

Source: Versus Capital Research, McKinsey & Co., JP Morgan. For Investment Professional Due Diligence Use Only 20

Farmland Market Update

Net Farm Income• Net farm income appears to have rebounded from the

recent low point in 2016

• The USDA’s August 2019 net farm income estimate was increased materially for 2018 and 2019

• Farm sector solvency ratios remain muted and are far below peak levels of the 1980s

Transaction Volume• Row crop transaction volume has remained healthy and

somewhat elevated as owner-specific issues unlock assets

• Permanent crop volumes continue to be challenging as cash-flowing operating assets are in high demand

• Development opportunities are plentiful

2019 Weather Impact• Wet weather and flooding throughout the Midwest early in

2019 are expected to reduce crop production this year

• Crop prices have been highly volatile in 2019 due to changing tariff expectations and wet weather, but underlying farmland values have been stable

Net Farm Income Metrics

Farm Sector Solvency Ratios

Source: Versus Capital Research, USDA. For Investment Professional Due Diligence Use Only 21

Timberland Market Update

Timber Product Usage Demand• Lower mortgage rates have bolstered demand for housing

throughout the U.S.

• New home construction (single & multi family) continue to recover from the global financial crisis

• Housing starts currently sit at 1.2M – 1.3M per year, which is the same level as 1992 – 1993 even though the U.S. population is 30% larger today

Sawmill Capacity & Timber Supply• Significant investment has been made in southern sawmill

capacity which bodes well for future production increases

• U.S. Southern sawtimber inventory appears to have peaked and is likely to gradually decline as homebuilding catches up with household formation

• Canadian timber production remains muted due to years of beetle-kill and restricted harvesting by the government

Transaction Activity• A wave of closed-end timberland funds are anticipated to

begin liquidation in the coming years as those funds reach the end of their stated terms

Southern Sawmill Capacity

Southern Sawtimber Surplus/Deficit

Source: Versus Capital Research, Hancock Natural Resources, BTG Pactual. For Investment Professional Due Diligence Use Only 22

Versus Capital: Biographies & Email Info

Mark Quam – CEO, Co-founder [email protected]

Mark Quam has over twenty years experience in the real estate investment and securities business. He joinedthe Adviser as the Chief Executive Officer in 2010. Previously, Mr. Quam was the President, Chief ExecutiveOfficer and Founder of Welton Street Investments, LLC and Welton Street Holdings LLC (“Welton Street”) from2005 to 2010. Prior to Welton Street, Mr. Quam, as a partner and senior executive, conceptualized and co-founded both Dividend Capital Trust and Dividend Capital Securities LLC, a private real estate trust and itsaffiliated distributor, respectively. From 1998 to 2002, Mr. Quam founded and was Chief Executive Officer, forEquityCity.com. Prior to establishing EquityCity.com, Mr. Quam was active in real estate development as aDirector of Construction and Project Management for CB Richard Ellis. Mr. Quam holds an undergraduatedegree in finance from the University of Arizona and attended the Masters Program in real estate finance andconstruction at the University of Denver. Mr. Quam was a member of the Financial Industry RegulatoryAuthority’s (“FINRA”) National Corporate Finance Committee from 2007 to 2012.

Bill Fuhs – President, Co-founder [email protected]

William R. Fuhs, Jr. is a founding partner of Versus Capital and has been the President since inception. In 2006,Mr. Fuhs partnered with Mr. Quam as the Chief Financial and Operating Officer of Welton Street Holdings from2006 to 2010, where he was responsible for product development, finance, administration and operations. Priorto Welton Street, Mr. Fuhs held several senior product development and finance positions with the DividendCapital companies from 2003 to 2005. Mr. Fuhs’ prior professional experience, from 1992 to 2003, includedvarious positions within the investment banking division of Merrill Lynch. During his eleven years at MerrillLynch, Mr. Fuhs was involved in numerous aspects of the business including equity and debt underwriting, assetbased financing (including real estate and project finance) and mergers and acquisitions. Mr. Fuhs has a Bachelorof Arts degree in Economics from Middlebury College. Mr. Fuhs serves as a member of the Board of Directors foreach of the Versus Capital funds. Mr. Fuhs brings extensive experience in the financial industry to his role asPresident and Director.

Casey Frazier – CIO, Co-founder [email protected]

Casey Frazier joined the Adviser as the Chief Investment Officer in 2011. Previously, Mr. Frazier was a SeniorVice President of NRF Capital Markets LLC from 2010 to 2011, where he was responsible for productdevelopment and due diligence for the firm including helping to develop products to be sold in the retail broker-dealer channel, managing the due diligence process for existing products and overseeing the marketing efforts ofthe firm. Mr. Frazier was the Chief Investment Officer for Welton Street Investments, LLC and Welton StreetAdvisors LLC from 2005 to 2010. In this capacity, he reviewed and monitored all prospective securities offeringsand investments. This included the review of over $7 billion in private real estate transactions. From 2004 to2005 he was an Assistant Vice President, Asset Management of Curian Capital LLC (“Curian”), a registeredinvestment adviser. In this capacity, Mr. Frazier helped supervise the asset allocation and money managerselection for Curian’s turnkey asset management program. Mr. Frazier helped develop over 300 multi-disciplinary account portfolios. During his tenure at Curian, he helped the firm grow assets from $200 million toover $1 billion. From 2003 to 2004, Mr. Frazier managed the due diligence process for the National PlanningHoldings’ (“NPH”) broker/dealer network, an organization with four separate broker dealers and over 3,000registered representatives. This process included analyzing all potential investments to be sold within the brokerdealer network including; mutual funds, variable annuities, private placements, REITs, hedge funds and derivativeproducts. Mr. Frazier received a Bachelor of Arts degree in American Political Economy from The ColoradoCollege, and has earned the CFA (Chartered Financial Analyst) designation.

Dave Truex – Deputy CIO [email protected]

Dave Truex is the Deputy Chief Investment Officer in the investments group at Versus Capital where he isresponsible for assisting in the development and implementation of Versus Capital’s investment activities for itsreal estate and real assets strategies. In addition to his work in portfolio design, Mr. Truex is also responsible foridentifying and evaluating investment opportunities, conducting due diligence on potential investments,negotiating structures and terms, and portfolio modeling on Versus Capital’s existing investments. Previously,Mr. Truex was a Portfolio Manager at Colorado PERA, a $45 billion public pension plan, where he oversaw aportfolio of real estate assets with a net asset value exceeding $1.5 billion. Prior to joining Colorado PERA, heworked in the investment services group at DCT Industrial Trust in Denver where he completed acquisitions anddispositions of industrial properties and focused on conducting property level due diligence. Mr. Truex began hisinvestment career as an Associate at BlackRock in New York where he specialized in real estate acquisitions withvarious debt and equity capital structures. Mr. Truex graduated with a Bachelor of Science degree in AppliedEconomics from the University of Minnesota and is a CFA® charterholder.

Kevin Nagy – Senior Portfolio Analyst [email protected]

Kevin Nagy is a Senior Portfolio Analyst for Versus Capital. Kevin's role includes manager due diligence, portfoliomonitoring, and tracking new real estate and real asset fund offerings. Kevin joined Versus in March of 2019.Previously, he was an Assistant Vice President in Callan Associates Real Assets Consulting Group. While atCallan, Kevin had various research coverage areas, including core real estate, farmland, Latin American realestate, and REITs. Kevin earned a BA in Economics from Occidental College, where he was a member of thevarsity football team. He has earned the right to use the CAIA designation.

Steve Andersen – CCO / COO [email protected]

Steve Andersen is the Chief Compliance Officer and Chief Operating Officer of Versus Capital and serves as theChief Compliance Officer for its affiliated closed-end interval funds. Prior to joining the firm in 2018, Mr.Andersen spent 15 years in senior compliance roles at Janus Henderson Investors and Intech InvestmentManagement, leading teams responsible for supporting and monitoring the Investment and TradingDepartments and developing policies and procedures necessary to ensure adherence to global regulations,including the U.S. Investment Advisers Act and Investment Company Act. Mr. Andersen graduated from theUniversity of Nebraska with a B.S. in Business Administration and has an M.B.A. from the University of Kansas.Mr. Andersen has earned the Certified Securities Compliance Professional (CSCP) designation.

Brian Petersen – Fund CFO and Treasurer [email protected]

Brian joined Versus Capital as Managing Director - Fund Financial Operations and was appointed as the ChiefFinancial Officer and Treasurer of its affiliated Closed-End Interval Funds in 2019.Brian’s 25-year professionalbackground includes 20 years at Oppenheimer Funds, an investment management firm that advised mutualfunds, ETFs, collective investment trusts and unregistered LLCs/LPs exceeding $225 billion in assets andencompassing a broad spectrum of investment strategies across equity, fixed income and alternatives. Mr.Petersen most recently served as Treasurer and Principal Financial Officer of its mutual funds, leading a teamresponsible for oversight of the day-to-day operations of all its investment products including investmentvaluation, NAV production, financial reporting and accounting policy administration, service provider oversightand Audit Committee reporting and relationship management. Mr. Petersen previously was a vice president ofCorporate Finance performing financial planning, analysis and accounting functions for business units with over1,000 employees and $300 million in annual expense budgets. He also held officer roles in its Fund Treasury andFund Accounting departments.Prior to working at Oppenheimer Funds, Mr. Petersen spent five years as anauditor with PricewaterhouseCoopers focused on clients in the financial services industry including assetmanagers, transfer agents and mutual funds. Mr. Petersen earned Bachelor of Science in Accounting and Masterof Accountancy degrees from the University of Denver and is a Certified Public Accountant in the State ofColorado.


Versus Capital: Biographies & Email Info

Jake Mortell – National / Western Region [email protected]

Jake Mortell is Versus Capital’s National Director of Advisory Services. Mr. Mortell joined Versus Capital inMarch of 2013 after providing RIA-focused sales and marketing consulting to the firm since early 2012. He hasover 20 years of industry experience, including 16 years dedicated to serving the RIA channel. He hasrepresented numerous asset managers to RIAs through his own firm, Candlewood Advisory Partners, LLC andpreviously with Sincere & Company, LLC. During his career he has advised on, developed and implemented salesand marketing plans for a wide array of investment strategies including private equity real estate, real estatewhole loan debt financing, global macro long/short, small cap value, global tactical asset allocation, andinternational equities as well as several others. He leads the Advisory Services team at Versus Capital and hasresponsibility for the Western region. Mr. Mortell has passed the series 6, 7, 24, 63, and 66 securitiesexaminations and is a graduate of Dartmouth College.

Mike Miller – Central Region [email protected]

Michael Miller has over 25 years of industry experience and joined Versus Capital in March of 2013 from Cohen& Steers, Inc. where he was Vice President, RIA Sales Manager with responsibility for the Midwest region. Whileat Cohen & Steers, he was responsible for managing a 19 state territory and implementing sales strategy for retailmutual and closed end REIT, REIT preferred, real asset, and infrastructure funds, a real estate hedge fund, and areal estate private equity vehicle. Prior to Cohen & Steers, Mr. Miller spent a year in similar Vice President,Regional Consultant roles with Legg Mason and 10 years at Denver Investment Adviser/Westcore Funds. He is agraduate of the Leeds School of Business at the University of Colorado-Boulder with a BS in Finance and has hisSeries 6, 63 and 7 FINRA registrations. Mr. Miller covers the Midwest for Versus Capital as Regional Director ofAdvisory Services.

Spencer Schomer – Eastern Region [email protected]

Spencer Schomer joined Versus Capital in 2013 as Regional Director of Advisory Services covering the Easternregion. He was most recently a Vice President at Cambiar Investors responsible for new business developmentand client relations within the RIA and bank / trust channels. During his time at Cambiar he also operated as aportfolio specialist and client portfolio manager. Before moving to the sales side of the asset managementindustry, Mr. Schomer spent six years as investment analyst for Prima Capital and Northern Trust. At Prima hecovered a wide range of asset classes including real estate, inflation-related investments, domestic, international,and emerging market equities. At Northern Trust he was part of an UHNW wealth advisory team that managed$1.4 billion in client assets across 35 separate families & institutions. He holds the Chartered AlternativeInvestment Analysts (CAIA) designation and graduated from Claremont McKenna College with a BA inEconomics – Accounting.

Will O’Neill – National [email protected]

Will O'Neill joined Versus Capital as Director of Advisory Services. Prior to joining Versus and switching to arelationship management role, Will served as a client advisor and due diligence analyst at Boston Private Wealth,conducting investment research on the firm’s equity, fixed income and alternative investments. Before BPW, Willworked as an investment research associate at O’Brien Management, an RIA in Boston, MA, where he wasresponsible for fund research, portfolio construction and trading activity. He is a graduate of the College of theHoly Cross with a dual concentration in French and Economics.

John Gordon – CFO [email protected]

John Gordon joined Versus Capital as the Chief Financial Officer and Chief Accounting Officer in 2011. Mr.Gordon is a CPA. His 30-year professional background includes 10 years at Madison Capital Management, LLC(Madison), an alternative investment management firm specializing in real estate, distressed, natural resourcesand special situation financial assets. Through May 2006, Mr. Gordon was responsible for the day-to-dayactivities of Madison's accounting and finance departments. Subsequently, Mr. Gordon managed the assetmanagement department and was a member of the compliance committee and the investment committee.Previously, Mr. Gordon was the Chief Financial Officer for seven public equipment leasing limited partnershipsmanaged by Capital Associates and served as the Corporate Controller for Capital Associates International, Inc.,a public equipment leasing company. Prior to working at Capital Associates, Mr. Gordon's experience includedfour years as the Corporate Controller of Encore Media Corporation and five years with KPMG, then the largestpublic accounting firm in the world. Mr. Gordon has extensive experience dealing with accounting, finance,human resources and information technology issues, including participation in and/or overall responsibility forthree major computer systems conversions. Mr. Gordon earned a BS in Business Administration with anemphasis in accounting from Metropolitan State College Colorado and attended MBA courses at the Universityof Colorado at Denver. Mr. Gordon became a certified public accountant in the state of Colorado in 1989 and aForensic CPA in 2010. Mr. Gordon was a licensed Series 27 at Madison, but is not currently registered with aFINRA member firm.

John Loomis – Director of Accounting [email protected]

John Loomis is the Versus Capital Director of Accounting. Mr. Loomis has over 25 years of accounting /financeexperience dealing with GL accounting, financial statement preparation, and managing processes. He spent 20years with Starz Entertainment, LLC as a Senior Accounting Manager and before that worked for KPMG. Mr.Loomis has earned BS degrees in Finance and Accounting from Brigham Young University and MetropolitanState College Colorado, respectively.

Jill Varner – Dir. of Compliance & Operations [email protected]

Jill Varner joined Versus in August 2019 as Director of Compliance and Operations. She previously worked atJanus Henderson Investors, where she was primarily focused on overseeing the US trade surveillance programand developing and maintaining controls to prevent insider trading and other forms of market abuse. Prior tojoining Janus Henderson in 2017, Jill spent several years at Coleman Research Group and Credit Suisse in variousCompliance and Operations roles. Jill graduated from North Carolina State University with a B.S. in Economics.


Real Estate Fund (VCMIX): Fund Summary Risks

INVESTORS SHOULD CAREFULLY CONSIDER THE FUND’S INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES BEFORE INVESTING. APROSPECTUS WITH THIS AND OTHER INFORMATION ABOUT THE FUND MAY BE OBTAINED FROM THE VERSUS CAPITAL WEB SITE (versuscapital.com).INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. AN INVESTMENT IN THE FUND IS SUBJECT TO A HIGH DEGREE OF RISK. THESE RISKSINCLUDE, BUT ARE NOT LIMITED TO, THOSE OUTLINED BELOW.

• The Fund is not intended as a complete investment program but instead as a way to help investors diversify into real estate.

• An investment is not suitable for investors that require liquidity, other than through the Fund’s repurchase policy.

• The Fund’s shares are not listed on any securities exchange and there is no secondary market in the shares.

• An investor cannot sell shares other than through the fund’s repurchase policy, regardless of how the fund performs.

• There is no guarantee that shareholders will be able to sell all of their tendered shares during a quarterly repurchase offer.

• The Fund’s distribution policy could result in a return of capital, resulting in less of a shareholder's assets being invested in the Fund and, over time,potentially causing the Fund’s expense ratio to increase.

• The distribution policy also may cause the Fund to sell a security at a time it would not otherwise do so.

• The Fund is "non-diversified" under the Investment Company Act of 1940.

• Real estate entails special risks, including tenant default, environmental problems, and adverse changes in local economies.

• Fixed Income investing entails special risks, including interest rate risk and credit risk

• The Fund and underlying Investment Managers may borrow up to one third of the Fund’s gross asset value, which could magnify losses as well as gains.

• Yield from an underlying fund could be significantly reduced if it fails to qualify as a REIT for tax purposes.

• Targeted portfolio diversification may not be achieved if Investment Managers take similar market positions.

• The Adviser and Investment Mangers manage portfolios for themselves and other clients; a conflict of interest between Fund and these other parties may arisewhich could disadvantage the Fund.

Shareholder Services

1.855.653.7173

Distributor

Foreside Funds Distributors LLC


http://foreside.com/

Real Assets Fund (VCRRX): Fund Summary Risks

INVESTORS SHOULD CAREFULLY CONSIDER THE FUND’S INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES BEFORE INVESTING. APROSPECTUS WITH THIS AND OTHER INFORMATION ABOUT THE FUND MAY BE OBTAINED FROM THE VERSUS CAPITAL WEB SITE (versuscapital.com).INVESTORS SHOULD READ IT CAREFULLY BEFORE INVESTING. AN INVESTMENT IN THE FUND IS SUBJECT TO A HIGH DEGREE OF RISK. THESE RISKSINCLUDE, BUT ARE NOT LIMITED TO, THOSE OUTLINED BELOW.

• The Fund is not intended as a complete investment program but instead as a way to help investors diversify into real assets including infrastructure, farmlandand timber.

• An investment is not suitable for investors that require liquidity, other than through the Fund’s repurchase policy.

• The Fund’s shares are not listed on any securities exchange and there is no secondary market in the shares.

• An investor cannot sell shares other than through the fund’s repurchase policy, regardless of how the fund performs.

• There is no guarantee that shareholders will be able to sell all of their tendered shares during a quarterly repurchase offer.

• The Fund’s distribution policy could result in a return of capital, resulting in less of a shareholder's assets being invested in the Fund and, over time,potentially causing the Fund’s expense ratio to increase.

• The distribution policy also may cause the Fund to sell a security at a time it would not otherwise do so.

• The Fund is "non-diversified" under the Investment Company Act of 1940.

• Real asset investments entail special risks including tenant default, price risk, and weather/natural disasters risk, government regulation, political and economicrisk.

• Fixed Income investing entails special risks, including interest rate risk and credit risk.

• The Fund and underlying Investment Managers may borrow up to one third of the Fund’s gross asset value, which could magnify losses as well as gains.

• Yield from an underlying fund could be significantly reduced if it fails to qualify as a REIT for tax purposes.

• Targeted portfolio diversification may not be achieved if Investment Managers take similar market positions.

• The Adviser and Investment Mangers manage portfolios for themselves and other clients; a conflict of interest between Fund and these other parties may arisewhich could disadvantage the Fund.

Shareholder Services

1.855.653.7173

Distributor

Foreside Funds Distributors LLC


http://foreside.com/

GlossaryStandard Deviation – A measurement of the dispersion of returns around the mean return. As the standard deviation increases, the annual variation in returns also increases.

Beta is the measure an investment’s relative volatility as compared to a benchmark. The estimated betas for our securities separate account portfolios run by Security Capital and Forum Securities are relative to their respective benchmark indices.. The Security Capital benchmark index is the NAREIT All Equity Index . The Forum Securities benchmark is the EPRA/NAREIT Developed REIT Index.

Sharpe Ratio – is calculated using the annualized total return, the annualized risk-free rate (i.e. Short Term U.S. Treasury Bonds) and the annualized standard deviation since inception. The Sharpe Ratio is a measure of risk-adjusted returns.

R-Squared (R2) – R-squared (R2) is a statistical measure that represents the proportion of the variance for a dependent variable that's explained by an independent variable or variables in a regression model. Whereas correlation explains the strength of the relationship between an independent and dependent variable, R-squared explains to what extent the variance of one variable explains the variance of the second variable.

Max Drawdown – Maximum drawdown (MDD) is the maximum observed loss from a peak to a trough of a portfolio, before a new peak is attained. Maximum drawdown is an indicator of downside risk over a specified time period.

Capitalization Rate (often abbreviated to “cap rate”) – A property’s NOI (defined below) divided by its purchase price. The cap rate indicates what percentage of the purchase price is returned to the buyer each year by property’s NOI. The Current Value Cap Rate is the trailing 4 quarter net operating income divided by the current value of the property.

Core Real Estate – High quality real estate assets located in major metropolitan markets historically characterized by a stable tenant base which has resulted in more predictable rental income and stable property values.

Core Plus Real Estate – investments are predominately core (see above) but with an emphasis on a modest value-added approach by increasing leverage or investing in secondary markets.

Gross Asset Value – is the total market value of the real estate investments under management in an institutional real estate fund.

Income Return – is the income generated by an investment expressed as a percentage of the invested principal. Average annual income return is the simple mean of a set of calendar year income returns.

Leverage – is a ratio used to determine the amount of financing used to acquire real estate assets and is calculated by taking the (gross market value – net market value)/gross market value

Net Operating Income (NOI) – A property’s annual gross income (from rents and other sources like parking fees) less the annual costs of operating and maintaining the property. For the purposes of NOI, operating costs do not include income taxes, depreciation, capital investments, and principal and interest payments on borrowings.

NOI Growth - The change in a real estate property or portfolio’s net operating income from one period to the next.

Private real estate fund (sometimes abbreviated to “private fund”) – A corporation, partnership, trust or other entity with (a) multiple investors that (b) specializes in seeking to achieve income or gain from the direct ownership of real estate, and (c) whose shares are not publicly offered and do not trade in a secondary market.

Public REITs – A corporation, partnership, trust or other entity with (a) multiple investors that (b) specializes in seeking to achieve income or gain from the direct ownership of real estate, and (c) whose shares are publicly offered and are listed on a national securities exchange.

Public Securities – Equity and debt securities issued by Public REITs and which trade on a national securities exchange.


Index DefinitionsPrivate Real Assets Index Blend: represented by a 50% allocation to private real estate, and a 16.66% allocation each to private infrastructure, private timberland, and private farmland.

Private Real Estate: NCREIF Property Index (NPI) measures the appraised values of over 7,000 core commercial operating properties (apartment, hotel, industrial, office and retail) acquired on behalf of tax-exempt institutions and held in a fiduciary environment. Each property’s return is weighted by its market value.

Private Infrastructure: JP Morgan OECD Core/Core+ Infrastructure: This modelled time series is representative of stable (core/core-plus) mature long-life infrastructure assets in OECD countries. The index was constructed from cash-flows of approximately 50 mature infrastructure assets in the U.S. and EU-15 countries selected from a broader pool of over 200 assets by omitting assets with significant construction, traffic, licensing risk and capex needs. JP Morgan then applied capital expenditure, maintenance and leverage assumptions using sector averages calculated on a rolling two-year basis at each quarter. Changes in discount rate were approximated using available data from the National Council of Real Estate Investment Fiduciaries (NCREIF) to arrive at estimated total returns. The following infrastructure asset types are represented in the dataset: Electricity Distribution, Natural Gas Distribution, Water and Waste Water Distribution, Ports, Airports and Toll Roads. MSCI Global Quarterly Infrastructure Asset Index measures the equity performance of infrastructure assets globally. Nine infrastructure asset owners contribute asset valuations for 123 individual infrastructure assets with a gross asset value of $61 Billion. Returns are time weighted and currency movements are excluded from return metrics.

Private Farmland: The NCREIF Farmland Index is a quarterly time series composite return measure of investment performance of a large pool of individual farmland properties acquired in the private market for investment purposes only. All properties in the Farmland Index have been acquired, at least in part, on behalf of tax-exempt institutional investors - the great majority being pension funds. As such, all properties are held in a fiduciary environment.

Private Timberland: The NCREIF Timberland Index is a quarterly time series composite return measure of investment performance of a large pool of individual timber properties acquired in the private market for investment purposes only. All properties in the Timberland Index have been acquired, at least in part, on behalf of tax-exempt institutional investors - the great majority being pension funds. As such, all properties are held in a fiduciary environment.

S&P Real Assets Index: is designed to measure global property, infrastructure, commodities, and inflation-linked bonds using liquid and investable component indices that track public equities, fixed income and futures.

Real Estate Index is a custom blended index broadly covering the global real estate equity and debt securities markets. From 7/9/12 – 10/5/15 the blended index was composed of 80% Dow Jones Global Select Real Estate Securities Index and 20% BBgBarc IG REITs TR USD. From 10/6/15 – Forward the blended index is composed of 80% Dow Jones Global Select Real Estate Securities Index and 20% Dow Jones Global Select Real Estate Securities Corporate Bond Index.

Real Assets Index is a custom blended index broadly covering the global real assets equity, debt and commodity markets. The blended index is composed of: 26.67% Dow Jones Brookfield Global Infrastructure Composite Index, 10.00% S&P Global LargeMidCap Commodity and Resources Index, 3.33% S&P Global Timber & Forestry Index, 13.33% Dow Jones Commodity Index, 20.00% Dow Jones Brookfield Global Infrastructure Broad Market Corporate Bond Index, 20.00% S&P Global LargeMidCap Commodity and Resources Corporate Bond Index, 6.67% S&P Global Developed Sovereign Inflation-Linked Bond (USD Index).

BBgBarc US Agg Bond Index is an unmanaged index representing more than 5,000 taxable government, investment-grade corporate and mortgage-backed securities, and is generally considered a barometer of the US bond market.

MSCI ACWI Index is a commonly followed equity index that captures large and mid cap representation across 23 Developed Markets (DM) and 26 Emerging Markets (EM) countries. With 2,844 constituents, the index covers approximately 85% of the global investable equity opportunity set.

Credit Suisse Liquid Alternatives Index seeks to replicate the return of the overall hedge fund industry, as represented by the Credit Suisse Hedge Fund Index. The Credit Suisse Liquid Alternative Index reflects the combined returns of the individual Liquid Alternative Beta strategy indices – Long/Short, Event Driven, Global Strategies, Merger Arbitrage and Managed Futures – weighted according to their respective strategy weights in the Credit Suisse Hedge Fund Index.

The majority of the Fund’s assets are invested in private real estate funds which utilize an appraisal-based pricing methodology, and the limited pricing transparency inherent in investing in private real estate may affect the ability to compare the Fund to the other categories shown.


Thank YouW W W . V E R S U S C A P I T A L . C O M

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real estate (vcmix) real assets (vcrrx) · timberland. farmland. infrastructure. real estate. firm...

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