real estate investing: a private foundation’s approach
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Real Estate Investing: A Private Foundation’s Approach. Presented by: D. Ellen Shuman Vice President & Chief Investment Officer Carnegie Corporation of New York. Perpetuity as a Mandate. - PowerPoint PPT PresentationTRANSCRIPT
Real Estate Investing: A Private Foundation’s Approach
Presented by:
D. Ellen ShumanVice President & Chief Investment OfficerCarnegie Corporation of New York
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“My desire is that the work which I hav [sic] been carrying on, or similar beneficial work, shall continue during this and future generations.”
Andrew Carnegie, November 10, 1911
First Letter of Gift
Carnegie Corporation of New York
Perpetuity as a Mandate
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Carnegie Grants with Impact
• TIAA-CREF (1915)
• Gunner Myrdal, An American Dilemma: The Negro Problem and American Democracy (1944)
• Sesame Street (1969)
• New York City small schools initiative (2003)
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Carnegie Corporation of New YorkActual Asset Allocation by Fiscal Year
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Real Estate
Private Equity
Absolute Return
Marketable Equities
Fixed Income
Cash
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1% 0% 3% 7% 11% 11% 14% 15% 11% 10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Real Estate
Other
Carnegie Corporation of New YorkActual Real Estate Allocation by Fiscal Year
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-30%
-20%
-10%
0%
10%
20%
30%
40%
1999 2000 2001 2002 2003 2004
Real Estate
MSCI World
Total CCNY
Carnegie Corporation of New YorkAnnual Performance (FY ending 9/30)
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0%
10%
20%
30%
40%
50%
60%
70%
Multi-Family
Hotel Industrial Land Office Retail RE Loans
CCNY NCREIF Index
Carnegie Corporation of New YorkCurrent Property Exposure by Type
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Carnegie Corporation of New YorkPrivate Real Estate Portfolio Characteristics• 20 private real estate managers• 40 commingled funds• $200M market value (out of total Carnegie
portfolio value of ~$2.1B)• 55% average property level leverage• 230 individual properties• 1/3 in Southern California
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Carnegie Corporation of New YorkTop 10 Properties by Equity Exposure
CCNY EquityProperty Location Type MV ($M)John Hancock Center Chicago Mixed Use 13.6Oakland City Center Oakland Mixed Use 10.2Prudential Plaza Chicago Office 6.8The Galleria Los Angeles Mixed Use 4.3Brandywine Center Delaware Retail 4.0Warner Center Los Angeles Office 4.0450 Lexington Avenue New York Office 3.3100 Wilshire Boulevard Los Angeles Office 3.1The Shores Los Angeles Apartments 3.01901 Avenue of the Stars Los Angeles Office 1.8Total 54.1
Three managers own these assets that represent 27% of total value of the real estate portfolio
While a Few of Our Holdings Are Landmarks…
…Much of the Portfolio Is Far Less Glamorous
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Carnegie Corporation of New YorkManager Selection Criteria• “Local sharpshooter”
– Focus on property type and/or geographic market• Proper alignment of interests
– Meaningful co-investment– Back-ended incentive compensation widely distributed
among the team• Principal ownership of the firm• Qualitative factors
– Principal mentality– Investment discipline w/ ability to assess risk as well as
return