Alternatives Overview
Real Estate and Private Assets Update
Presented by:
Rodney Lumpkin
Portfolio Manager
Alternative Investment Strategies Group
Alternative Investments
Overview
Alternative investments offer a diversified source of alpha
Return Enhancement
Alternatives
Public Markets
Private Equity
Special Situations
Structured Credit
Hedge Funds
Real Estate
Commodities
Real Assets
US Large Cap Equity
US Small Cap Equity
Non-US Equity
Low Volatility Equity
US High Yield Bonds
Non-US Bonds
REITs
Risk Reduction
Money Market
Short and Intermediate Gov’t Bonds
Core Fixed Income
GNMA Bonds
Laddered Bonds (Customized)
Long Duration Bonds
Inflation Protection Assets
Derivatives
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
3
How we create probability distributions and what they mean
About Capital Market Assumptions
• SEI Investment Management Corporation develops forward-looking, long-term capital market assumptions for risk, return, and
correlations for a variety of global asset classes, currencies, interest rates, and inflation.
• These assumptions are created using a combination of historical analysis, future market environment expectations and by applying our
own judgment. In certain cases, alpha and tracking error estimates for a particular asset class are also factored into the assumptions.
• We believe this approach is less biased than using pure historical data, which may be affected by unsustainable trends or permanent
material shifts in market conditions.
• The probability distribution graphs and / or tables that follow are meant to provide an overview of the range of possible outcomes
for a given variable (e.g., returns, pension contributions, expense) for a given asset allocation.
• The probability distributions are generated using SEI’s proprietary modeling tool and simulated capital market behavior.
• Capital market behavior is simulated for 1,000 possible scenarios based on expected performance of each asset class and
reflecting current economic conditions. Capital market assumptions such as return, standard deviation and covariances are inputs
into this process, combining with model parameters to create market scenarios.
• We use these 1,000 capital market scenarios to create 1,000 output scenarios for each variable being considered.
• A 90% confidence interval should be interpreted as 90% of the projected output variables, falling between the 5% and 95% results,
based on SEI Capital Market Assumptions.
• This projection is hypothetical in nature, does not reflect actual investment results and is not a guarantee of future results.
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
4
Performance characteristics of alternatives compared to
traditional investments
Traditional
Alternatives
80%
68.7%
60%
POTENTIAL
O U T C OM E S
44.7%
48.4%
47.2%
24.5%
21.4%
2.9%
8.5%
8.0%
9.2%
8.9%
9.4%
3.8%
4.5%
-6.4%
-7.6%
-20%
75th Percentile
16.8%
7.7%
2.7%
Good Scenarios
(95th Percentile)
25.9%
25.4%
14.0%
0%
48.4%
43.4%
29.5%
20%
-15.0%
-14.1%
-10.4%
-18.6%
-18.7%
-20.9%
7.3%
10.9%
9.0%
-8.6%
-17.2%
-19.4%
6.1%
Median
(50th Percentile)
-7.3%
25th Percentile
Poor Scenarios
(5th Percentile)
-20.0%
Core Property
Structured Credit
Private Equity
Special Situations
Hedge FoF
Emerging Markets Equity
Dev'l Int'l Equity
Small Mid Cap
Disciplined Equity
Emerging Markets Debt
High Yield
Long Corporate
Long Duration
-29.1%
-40%
Core Fixed Income
RETURN (%)
50.9%
40%
Individual weightings are available on request.. Illustrations shown are based on capital market assumptions December 2012; see disclosure at end of presentation for additional
detail. *Gross of Fees
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
5
Expected Return
Adding alternatives may improve expected
portfolio efficiency
Expected Risk (Standard Deviation)
Global Portfolio with Traditional Investments
Global Portfolio with 10% Alternative Strategies I
Global Portfolio with 15% Alternative Strategies II
Global Portfolio with 20% Alternative Strategies III
SEI’s Global Portfolio is comprised of a mixture of major domestic and foreign stock and bond asset classes ranging from 40% equity/60% bond to 100% equity/0% bond. With the
addition of the Alternatives Strategies, the allocation to the SEI Global Portfolio is decreased proportionately. Alternatives Strategy I is comprised of 100% SEI Opportunity Fund;
Alternatives Strategy II is comprised of 60% Opportunity Fund, 40% Special Situations; and Alternatives Strategy III is comprised of 45% Opportunity Fund, 30% Special Situations and
25% Global Private Assets. Expected return and expected risk values are based on SEI’s Capital Market Assumptions as of 6/18/2014. Please see the Important Information slides for
additional information.
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
6
Liquidity analysis
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Portfolio #1
Moderate Return/Risk
Low Alts
Daily Liquidity
Portfolio #2
Higher Return
Moderate Alts
Quarterly Liquidity
Two Year Lock-Up
Portfolio #3
Reduced Risk
Higher Alts
Greater than Two Year Lock-Up
Portfolio #1
Moderate Return/Risk
Low Alts
Portfolio #2
Higher Return
Moderate Alts
Portfolio #3
Reduced Risk
Higher Alts
Daily Liquidity
90%
85%
75%
Quarterly Liquidity
5%
5%
8%
Two Year Lock-Up
5%
10%
12%
Greater than Two Year Lock-Up
0%
0%
5%
Liquidity Analysis
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
7
SEI alternative assets strategy set
Return & Risk
+
Global Tactical
Asset Allocation
Long Short Equity
Credit Hedging
Convertible Bond Hedging
Fixed Income
Global Macro
Multi-Strategy
Event Driven
PERE – Core
+
MBS Long/Short
Corporate Sector –
Stressed Credit
Direct Lending
Distressed Debt
Consumer Sector –
BS / ABS Long Short
Whole Loan Mortgages
Government Sponsored
Programs
Structured Credit
+
PE – Venture Capital
PE – Buyouts
PE – Debt
PERE – Value-Added
PERE – Opportunistic
Real Assets/Infrastructure
PE = Private Equity
PERE = Private Equity Real Estate
High
Need for liquidity/diversification benefits
Low
Proposed allocations, subject to change at manager’s discretion.
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
8
Features of SEI alternative fund offerings
SEI Opportunity
Fund
Expected Risk
& Return
•
Long-term targeted
return of 5.0% over
cash
•
7% standard
deviation
•
•
Primary Goal
Opportunity
Set
SEI Special Situations
Fund
SEI Private Assets
Fund
SEI U.S. Core Property
Fund
•
Long-term Targeted Return
of 7.0% over cash
•
Long-term targeted
return of 12%
•
Long-term targeted
return of 7.00%
•
11-12%+ standard deviation
•
20% standard deviation
•
9% standard deviation
Low correlation to
public markets
•
Return enhancement vs.
traditional assets
•
Return enhancement vs.
traditional assets
•
Low correlation to public
markets
The Fund focuses on
managers operating
in the following
strategies: Equity
Hedge,
Tactical/Directional,
Relative Value and
Event Driven, among
others. Additionally,
there is an emphasis
on alpha with limited
betas to equity,
duration and credit.
•
The Fund focuses on
managers operating in the
following strategies: Equity
Hedge, Tactical/Directional,
Relative Value and Event
Driven, among others.
Compared to our
Opportunity Fund, The
Special Situations Fund
targets more concentrated
directional exposures within
a broader opportunity set,
including less liquid
strategies.
•
Emphasis on exploiting
the market inefficiencies
that become available
through longer term
investment strategies.
•
The Fund allocates its
assets among a variety
of real estate managers,
is primarily focused on
low-leveraged, wellleased, incomeproducing properties in
the US, and is designed
to generate a current
income with reduced
correlation to the
conventional stock and
bond markets.
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
9
SEI Core Property Fund
(SEI CPF)
First Quarter 2014
Core Property defined
Basic sectors
• Multi-family – Duplexes, triplexes, multi-unit complexes, etc.
• Office – Central business district locations, suburban locations, multi-tenant, single-tenant, etc.
• Industrial – Warehouses, distribution centers, manufacturing, research and development centers, etc.
• Retail – Traditional malls, strip malls, neighborhood centers, specialty centers, etc.
• Other – Specialty sectors, such as self storage, hotels, and land, may be present in relatively small
allocations, but are not traditionally classified as core
Low leverage
• To qualify as a core property, debt levels must be minimal; and typically range from 0% to 40%
High occupancy
• Core properties are stabilized assets that are fully leased (>85%) at market rates to a diversified mix of
high quality tenants with solid credit ratings
Quality assets
• To maintain occupancy goals, core properties must typically meet competitive standards, such as
Class A ranked office buildings and assets that are energy star and/or Leadership in Energy and
Environment Design (LEED) certified
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
11
Not all real estate strategies are the same
Typically private strategies
Expected Return
High
Public REITs or private strategies
Low
•
•
•
•
•
•
Stabilized properties
Income producing
Well-leased
Primary markets
Lower leverage (0% -40%)
Longer holding period (7+
years)
• Minimal capital expense
requirements (primarily
maintenance)
Core
Low
•
•
•
•
•
•
•
•
Lower occupancy rates
Repositioning opportunities
Buy and renovate strategies
Ownership restructuring /
recapitalization
Primary and secondary
markets
Increased leverage (40%70%)
Minimal construction
Shorter holding period (3-7
years)
Value-Added
• Distressed owners and / or
properties and capital
structures
• Debt investments
• All international and emerging
markets
• Development / construction
• Secondaries
• Increased leverage (50%80%)
• Shorter holding period (1-5
years)
Opportunistic
Projected Volatility
High
For illustrative purposes only.
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
12
Owning core real estate may offer several advantages
Potential Benefits
Considerations
Diversification enhancer
Less liquid than public securities / REITs
Current income-driven returns
Investment experience is location specific
Historical inflation hedge
Assets have some degree of obsolescence
Relatively low risk profile
Sensitive to both national and local economies
Real / tangible asset vs. financial asset
Leverage
Correlation Matrix*
Return
Asset Class Characteristics*
16%
14%
12%
10%
8%
6%
4%
2%
0%
NAREIT
NPI
NPI
S&P 500
CPI
0%
Barclay’s
US
Aggregate
5%
10%
15%
20%
CPI
S&P
500
Barclays US
Aggregate
NPI
1.00
CPI
0.39
1.00
S&P 500
0.13
0.09
1.00
Barclays US Aggregate
-0.15
-0.14
0.18
1.00
NAREIT
0.12
0.16
0.48
0.15
NAREIT
1.00
Volatility
*Asset class characteristics and correlation matrix are based on the actual return history of the specific indices from 1978-Q1 to 2013-Q4. Past performance is no guarantee of future
results. Source: NCREIF Market Indices Spreadsheet – 4Q13.
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
13
Key differences between private real estate and REITs
Private Real Estate
REITs
Direct ownership in physical property
Indirect ownership in property-based
securities
Low to zero correlation to public markets
Moderate to high correlation to public
markets
Quarterly liquidity, subject to restrictions
Daily liquidity
Appraisal-based valuations
Market based pricing
Single source of revenue (rents)
Various sources of revenue (rent,
development fees, property management
fees)
Transact at NAV
Transact at premium / discount to NAV
Limited impact from short-term risk on / risk
off stock market fluctuations
Distinct impact from short-term risk on /
risk off stock market fluctuations
Limited public disclosure
Detailed public disclosure required
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
14
U.S. property market landscape
NCREIF ODCE Vacancy Rate
NPI Net Operating Income Growth
8%
12%
6%
11%
4%
10%
2%
9%
0%
7%
-4%
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
-2%
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
8%
NPI Price Index
Current Pricing Environment
8%
7%
6%
Transaction Cap Rates
1Q14
4Q13
3Q13
2Q13
1Q13
4Q12
3Q12
2Q12
1Q12
4Q11
3Q11
2Q11
1Q11
4Q10
3Q10
2Q10
1Q10
4Q09
3Q09
2Q09
5%
425
400
375
350
325
300
275
2Q09
3Q09
4Q09
1Q10
2Q10
3Q10
4Q10
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
9%
Current Value Cap Rates
Sources: NCREIF ODCE Vacancy Rate is from the NCREIF ODCE Details spreadsheet and is calculated as 1 minus the Occupancy rate; NPI Net Operating Income Growth,
Transaction Cap Rates, Current Value cap Rates, and NPI Price Index are from the NCREIF Trends Report and the Index figures are 4-quarter rolling averages.
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
15
Core Property Fund: Positioning and actions
Positioning
• The Fund currently maintains overweights to the multi-
SEI CPF Geographic Allocation
family, industrial, and other sectors at the expense of
office and retail
East
33.0%
• Fund-level leverage is at 24.7%, and occupancy is at
93.2% for the quarter, both higher than the
corresponding ODCE figures by 330 and 170 basis
points, respectively
Midwest
9.8%
• The Fund remains well diversified through its eight
West
36.4%
South
20.8%
managers, which in total provide exposure to more than
600 individual properties
Actions
• The Fund received additional commitments of over $85
million for April 1 and instituted a queue that is expected
to be drawn over the next three to six months
• Current assets under management are just under $1.2
billion
• To continue building the Fund and accommodate future
inflows, additional commitments were made to several
of the existing managers
SEI CPF Sector Allocation
Multi-Family
Office
Industrial
Retail
SEI CPF
NPI
Other
0%
10%
20%
30%
Percent Allocation (%)
40%
Sources: SEI, NPI. Based on actual invested position of money drawn by managers and excluding cash; “Other” includes predominantly self-storage, hotel and land. As of 3/31/14.
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
16
Private Assets Fund
Defining terms: What are private assets?
Private Assets
• Long-term investments typically in non-publicly traded companies
• Private equity managers take an active and strategic role in the management and oversight of the
company in an effort to increase its financial and operational value
• Five major sub-asset classes
– Venture Capital – Funding for entrepreneurs and the growth of emerging companies
– Buyouts – Funding for acquisition or re-capitalization of growth or established companies
– Debt – Partnerships that lend to (or purchase the debt of) underlying portfolio companies, rather than purchasing
equity for an ownership interest
– Real Estate – Active, direct ownership in real estate properties through debt or equity
– Real Assets/Infrastructure – Tangible, real property interests in such items as power plants, copper mines, windmills,
and toll roads and airports, among other things
Challenges
• Duration of diversified private asset fund of funds presents challenges to many clients
• The asset class entails a relatively long-term lock-up compared to other asset classes
• Private assets are often characterized by an exacerbated investment phase whereby capital is called
and negative returns persist for the first few years before gains are seen and distributions begin
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
18
Why invest in private assets?
Enhanced risk/return
• Private assets have out-performed traditional stock and bond investments over the longterm time periods of 10, 15, and 20 years
• Adding private assets to a well-diversified portfolio may enhance returns without adding
disproportionate risks
Diversification
• First, the investments targeted are non-public and typically not available through public
market investment strategies, thus giving exposure to differentiated areas that often move
separately from public markets
• Second, in instances where the valuations of non-public, private assets investments are
derived from public market inputs and correlation does exist, the quarterly valuation cycle
of private assets results in a lagged correlation of approximately six to 18 months, thus
giving investors an indirect diversification benefit by smoothing returns
– This diversification benefit can also be viewed as accounting/actuarial diversification
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
19
Private assets have a favorable long-term return
1 year
3 year
5 year
10 year
15 year
20 year
Cambridge Buyout &
Growth
16.4%
14.1%
9.8%
14.3%
12.2%
13.4%
Cambridge Venture
Capital
15.1%
14.4%
7.5%
8.6%
26.1%
30.1%
S&P 500
19.2%
16.2%
11.0%
7.9%
6.3%
7.2%
Russell 3000
21.5%
16.6%
11.5%
8.4%
6.8%
7.6%
MSCI EAFE
23.7%
8.4%
7.0%
6.3%
5.0%
4.9%
Sources: Cambridge Associates, Frank Russell Company, MSCI Inc., Standard & Poor’s, and Thomson Reuters Datastream. Information as of 9/30/2013.
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
20
The “J” curve: An illustration
Investment Stage
Distribution Stage
Investment Stage
• Early in the fund’s life, capital is called to invest in portfolio companies and pay expenses. Cash flow is
negative during this stage. Some distributions may be made as early opportunities are identified to
liquidate holdings. These distributions typically only partially offset capital calls.
Distribution Stage
• Given time for the underlying investment companies to increase their value and begin liquidity events,
the fund’s returns and cash distributions may start to rise quite steeply.
Note: These are not actual transactions, but are used for illustrative purposes only. Actual investments and results will vary.
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
21
Cash flow-oriented private assets fund of funds GPA III
Fund Overview
• Cash-flow oriented private assets fund of funds targeting 10-12 managers and / or co-investments
Investments
• Approach centers around managers that offer secondary-market buyout, venture, debt and real estate
and possibly real assets / infrastructure exposure, as well as venture and buyouts co-investment
opportunities
• Complementing these funds would be a selection of short-duration debt strategies that typically have
two year investment periods followed by three to five years to harvest returns
Cash Flow Profile
• The expected cash-flow profile of this approach is a faster pace of investment than is typical of most
private assets funds of funds: quicker realizations and almost immediate income, earlier than normal
distributions, and a very shallow and short j-curve
Commitment
• Thus, while the stated term of GPA III likely be in excess of 8 years to accommodate the secondary
funds, these cash-flow oriented strategies and shorter-term debt and co-investment strategies are
expected to result in the bulk of investment activity occurring in 5-7 years
All GPA III data and terms are estimated and preliminary as specific terms will only be known upon completion of manager selection.
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
22
SEI GPA III: Illustrative characteristics*
Strategy Allocations
Sub-Class Allocations
Real Estate,
23%
Debt, 10%
Real Assets/
Infrastructure,
10%
Dedicated
VC, 25%
Debt, 23%
Buyouts, 22%
RE - NonCore, 5%
Secondaries,
60%
Venture, 22%
⃰ The percentage allocations serve only as a sample targeted allocation. The Investment Manager may, in its sole discretion, modify such allocations in response to market
developments.
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
23
Important Information
This presentation is provided by SEI Investments Management Corporation (SIMC), a registered investment adviser and wholly owned
subsidiary of SEI Investments Company. The material included herein is based on the views of SIMC. Statements that are not factual in
nature, including opinions, projections and estimates, assume certain economic conditions and industry developments and constitute
only current opinions that are subject to change without notice. Nothing herein is intended to be a forecast of future events, or a
guarantee of future results. This presentation should not be relied upon by the reader as research or investment advice (unless SIMC
has otherwise separately entered into a written agreement for the provision of investment advice).
There are risks involved with investing including loss of principal. There is no assurance that the objectives of any strategy or fund will
be achieved or will be successful. No investment strategy, including diversification, can protect against market risk or loss. Current
and future portfolio holdings are subject to risk. Past performance does not guarantee future results.
Certain economic and market information contained herein has been obtained from published sources prepared by other parties, which
in certain cases have not been updated through the date hereof. While such sources are believed to be reliable, neither SEI nor its
affiliates assumes any responsibility for the accuracy or completeness of such information and such information has not been
independently verified by SEI.
Index returns are for illustrative purposes only and do not represent actual fund performance. Index performance returns do not reflect
any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past
performance does not guarantee future results.
SIMC develops forward-looking, long-term capital market assumptions for risk, return, and correlations for a variety of global asset
classes, interest rates, and inflation. These assumptions are created using a combination of historical analysis, current market
environment assessment and by applying our own judgment. In certain cases, alpha and tracking error estimates for a particular asset
class are also factored into the assumptions. We believe this approach is less biased than using pure historical data, which is often
biased by a particular time period or event.
The asset class assumptions are aggregated into a diversified portfolio, so that each portfolio can then be simulated through time using
a monte-carlo simulation approach. This approach enables us to develop scenarios across a wide variety of market environments so
that we can educate our clients with regard to the potential impact of market variability over time. Ultimately, the value of these
assumptions is not in their accuracy as point estimates, but in their ability to capture relevant relationships and changes in those
relationships as a function of economic and market influences.
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
24
Important Information
The projections or other scenarios in this presentation are purely hypothetical and do not represent all possible outcomes. They do not
reflect actual investment results and are not guarantees of future results. All opinions and estimates provided herein, including forecast
of returns, reflect our judgment on the date of this report and are subject to change without notice. These opinions and analyses
involve a number of assumptions which may not prove valid. The performance numbers are not necessarily indicative of the results you
would obtain as a client of SIMC.
We believe our approach enables our clients to make more informed decisions related to the selection of their investment strategies.
For more information on how SIMC develops capital market assumptions, please refer to the SEI paper entitled “Executive Summary:
Developing Capital Market Assumptions for Asset Allocation Modeling.” If you would like further information on the actual assumptions
utilized, you may request them from your SEI representative.
The information contained in this material should be treated as confidential and proprietary to SEI. Distribution of the material(s) or
information contained in the material(s) to any person other than the person to whom this material was originally presented to or
delivered and those persons retained to advise him or her with respect to SEI is unauthorized, and any reproduction of this material, in
whole or in part, or the divulgence of any of its contents, without the prior consent of SEI is prohibited.
SIMC is the adviser to the SEI Alternative Funds, for which SEI Investments Distribution Co. (SIDCO), SIMC’s affiliate, serves as
placement agent. SIMC and SIDCO are wholly owned subsidiaries of SEI Investments Company. SEI Alternative Funds, with the
exception of its structured credit product, are “fund-of-funds”, which means that the fund invests in underlying third party funds. The
strategies that the underlying hedge funds pursue may increase the risk of loss.
There is no assurance that the objectives of any SEI Alternative Fund will be achieved or that the strategies described herein or
implemented in any SEI Alternative Fund will be successful. Alternative investments by their nature involve a substantial degree of risk,
including the risk of complete loss of capital and are only appropriate for parties who can bear that high degree of risk and the highly
illiquid nature of an investment. Specifically, SEI Alternative Funds, and the funds they invest in, often engage in leveraging and other
speculative investment practices that may increase the risk of investment loss, are not required to provide periodic pricing or valuation
information to investors, involve complex tax structures and delays in distributing important tax information, are not subject to the same
regulatory requirements as mutual funds, and often charge higher fees.
In addition to the normal risks associated with investing, narrowly focused investments typically exhibit higher volatility. Real estate
investments are subject to changes in economic conditions, credit risk, and interest rate fluctuations.
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
25
Important Information
No person has been authorized to give any information or to make any representation, warranty, statement or assurance not contained
in the Memorandum relating to an SEI Alternative Fund and, if given or made, such other information or representation, warranty,
statement or assurance may not be relied on. The offering of any SEI Alternative Fund described herein will be made in reliance upon an
exemption from registration under the Securities Act of 1933, as amended, for offers and sales of securities that do not involve a public
offering. No public or other market will develop for the interests. The interests are generally not transferable without the consent of the
applicable SEI Alternative Fund and the satisfaction of certain other conditions, including compliance with Federal and state securities
laws.
Prepared for use at the SEI 2014 Nonprofit Client Symposium, June 19-20, 2014.
FOR INSTITUTIONAL INVESTOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION.
26