Private Equity Real Estate Forum

Risk/return perceptions associated with venture capital have compelled many successful funds to design and adopt intricate strategies to cope with downside risk. A panel of experienced investors with interestingly diverse and rich backgrounds will discuss multifaceted portfolio strategies key to preserving and enhancing portfolio value in uncertain, volatile times.

The panel will discuss how VC funds help drive growth, scale and profitability in portfolio companies. While chasing the goal of a profitable “exit” – how do investors value growth vs. profitability? Does it differ by industry / company? How does that impact the nature of companies investors put money into? ∙ Do all Canadian investors follow the moonshot Bay Area model, or is there another way? Are Canadian investors too timid? ∙ Portfolio companies can be supported directly through a more hands-on approach or with advice/networking. Where should VC funds be on this continuum? Why? ∙ What is something that portfolio companies consistently need help with? ∙ How do investors judge the success of their efforts helping portfolio companies? ∙ Does any of this growth thinking translate to growing a VC fund? ∙ Can a VC fund turn itself into a tech start-up? What about incubating companies internally? The panelists will also discuss drivers for deal flow, the role of angel investors, and will share their thoughts and advice on growing portfolio companies.

A panel of experienced and diverse fund managers will address key issues in early stage investing, including but not limited to: State of the VC market: Is seed stage underserved in Canada? Why or why not? • What’s the difference between pre-seed and seed stage? • What trends or observations are you seeing in seed stage investing in Canada? (specific technologies, sectors, general transactional trends (i.e. round size, valuations) • Is there a valuation gap at seed stage between Canada, US? • How would macro economics conditions, especially a future down cycle, influence your seed stage investment activities? • Investment parameters: What do you look for in seed stage investments?

The availability of alternative financing options, including but not limited to venture debt, compel startups to look beyond equity when traditional venture capital or bootstrapping may not be the perfect solution. Leading Canadian startup/growth financiers will discuss why founders and the management of growing technology companies will want to consider venture debt, as well as at what point in their business lifecycle they may decide to consider it. What is revenue-based financing and how is it different from venture debt? What types of companies are best suited for revenue-based financing?

A panel of experienced Private Equity GPs, who bring large-cap, mid-cap and credit perspectives, will provide their views the drivers to creating value in Private Equity deals. The discussion will examine key value driver levers on investment, during ownership and at exit. It will also consider how the relative priority of these value drivers has changed over the last 10 years and how the GPs have adapted their approaches accordingly.

The panel, consisting of experienced GPs, will discuss the private equity toolkit and how it can be applied to drive portfolio company value. The conversation will explore the record amounts of committed capital and leverage in the market, its effects on valuations and deal sourcing, and how fund managers have adapted to this environment. The discussion will also touch on performance measurement and key metrics, as well as the evolution of how LPs are evaluating GPs. The session will wrap up with thoughts on exit climate and strategies, from strategic sales to IPOs and secondaries.

M&A activity in the mid-market in Canada has been very healthy for years, largely in the sellers' favour. How have buyers adapted to these dynamics, at macro and deal-by-deal levels? Our panelists are from both sides of the deal, as principals and advisors.

A dynamic panel representing leading North American private debt funds will discuss deal flow sourcing strategies with private equity sponsors and non-sponsors, as well as the advantages of private debt vs. commercial bank lending in leveraged transactions. Discussions will also focus on strategies and best practices in portfolio management/underwriting in an economic downturn.

Private equity secondary has a been a fast-growing asset class globally. Here in Canada, a number of players are actively participating in the market, each with its unique area of focus. The panelists will share their thoughts on market trends, investment strategy and fundraising.

Assessing distinct fund structures and product offerings on the market · Return objectives, fund characteristics, leverage, liquidity features · Investment strategies across asset classes and geographies · Innovative portfolio strategies in competitive and volatile markets (risk/return trade-offs) · Assessing core, value-add, opportunistic/development investments · Opportunities, risks, challenges in primary and secondary markets · Co-investment vehicles, pooled real estate funds, private equity capital · Trends in capital flow, emerging regional/global players, evolving investor profile Leveraging technology for operational efficiency Risk management, compliance and governance

Key demand drivers/macro to micro, interest rates/affordability, government policy, investor/owner occupier, onshore vs. offshore · Entitlements and approvals: opportunities/challenges relating to municipal process, evolving policies, community/political engagement, nimbyism · Construction cost escalation: what’s driving it and are we under sustained pressures; how are developers managing it? · Financing: land, construction, permanent; what is the lender’s view of the market and is there a gap vs. developer outlook; key constraints from the developer’s standpoint (land, construction, mezz, permanent)? · Major trends impacting development (technology, sustainability) and how companies are adapting · Joint-ventures and co-investments: private with private/ institution with institution / private with institution - are we going to see more of it? · Outlook for development growth and markets 2019/2020

WeWork, as a disruptor, seems to be move aggressively into the Toronto market (deal with Dream, JV with Ivanhoe). WeWork and co-working model – a threat or opportunity? · With tech office continuing to drive demand in the office market, what kind of space and amenities do technology companies demand? · With downtown Toronto facing one of the lowest vacancy rates, are there opportunities in the suburbs from an absorption of investment perspective? · What is driving demand for office development currently planned in Toronto? Is it a function of low availability rates downtown, new tenant amenities? · ESG and sustainable buildings are gaining a lot of traction from investors and tenants. Is the demand real or still somewhat academic? · Industrial availability rates are at historic lows, and so are industrial cap rates. investor interest outstripping fundamentals? · Where do you see the opportunity in industrial?

Retail in the US: transformational changes or business as usual/part of the economic cycle? · "Death of Retail”- Is there any truth to it? If so, how does it impact retail in Canada? · What can Canada learn from retail changes, trends and innovations happening around the world? Will Canada be able and/or willing to make these changes to survive? · What makes Canada retail different from the US or Europe? Why are we so special? · Is Canada ahead or behind in retailing when you look at the industry on a global basis? · Are Canadian retailers and landlords worried about changes happening in the US and globally? If so, what are they doing about it? · A number of US retailers are owned by private equity and are experiencing large financial debt loads that they are unable to service due, in part, by declining revenues. Why did this happen and what effect is it having on the retail market globally? · Entrance and expansion of luxury retail in Canada, such as HR, Sak’s, and Nordstroms, is the Canadian retail market large enough to support all of them? · Is there true meaning to the word “Placemaking” that seems to have fallen into our vocabulary? · How much influence does US retail really have on Canada? If so, which areas are most and least vulnerable? Which Canadian retailers are suffering with the recent foreign invasion? What can (or should) they do to survive?

Assessing the dynamics in capital formation for CRE projects; evolving sources of capital · Capital stack examples on a construction project with touch points on: Role of senior debt, mezz, pref equity, deposits and land lift to boost ROI’s with minimal cash equity; Big owner perspective i.e Otera vs Create Private Money i.e Firm’s view on it - conservative vs. aggressive structure?; Commonly used pref returns and waterfall structures. Does 90-10 with 12 pref and 50-50 work or not? · Where are the opportunities in today’s market - small/mid market unsophisticated developers with a good project or a large sophisticated developer with access to cheap cost of debt capital · Who is maximizing project level ROI better? · Touch on technology - proptech, finTech, WeWork · Family office perspectives on CRE deal structuring and co-investments · Challenges and opportunities for specialized CRE debt funds in Canada

Which property classes and geographies offer the best risk/return trade-offs? · Innovating portfolio-level strategy in competitive and volatile markets · Assessing core, value-add and opportunistic investments · Niche real estate investments - pitfalls and profits · Investing in secondary markets - what works, what doesn't · Fine-tuning established portfolios to market trends · Co-investment structures and stakeholder management · Leveraging technology for operational efficiency · Portfolio risk management and tax considerations

Development growth challenges and opportunities in key markets · Supply/demand in residential and commercial real estate · Coping with land/building costs and affordability · Deal structuring, financing and alternative sources of capital · Co-investment opportunities for private and institutional investors · Key technology trends impacting the construction industry · Real estate crowdfunding: competitive or complementary?

Real estate investment vehicles: what is right for you? · Optimizing real estate deals (cost, structure, terms) · Transactional risk management (commercial, multi-family properties) · Trends and best practices in acquisition/disposition due diligence · Legal/tax considerations for forming and operating private real estate funds in Canada · Cross-border investments, tax strategies, offshore structures · Evolving compliance and regulatory environment

Re-assessing multifamily investment approaches in current markets · Value-add and stabilized properties across the risk/return spectrum · Getting into the construction game: The new dealflow? · How shifting demographics and lifestyle attitudes impact the rental market · Property value and cashflow enhancement techniques · Boosting tenant acquisition and retention rates · Portfolio diversification and risk management

Running an effective fundraising campaign · How investors source and select funds · What incentives do you need to offer to LPs? · Building a momentum in the fundraising process · Raising capital from institutional firms · Strategies for securing a first strong close · Structuring your fundraising deals · Examining deal terms and capital stack · Working with placement agents · Real estate crowdfunding

Investment climate and trends in primary and secondary cities · Redevelopment and repositioning in response to evolving client needs · Lease negotiation techniques for increased NOI and profitability · Digitalization and outsourcing - implications for office real estate investment · E-commerce, big data, analytics - how retailers and investors cope with technology · What does the future hold for office and retail construction? · CRE portfolio strategies for premium risk-adjusted returns · Approaches to capital stack and risk management in CRE deals · Biggest opportunities in 2020?

Hotel investment outlook: travel markets, hospitality trends · What drives investor demand: local vs. foreign groups · Competition for prime assets and its impact on valuation · M&A activity and consolidation trends in key markets · Deal structuring and financing options for investors · Innovative asset value enhancement techniques · Exit climate and secondaries · Optimizing operations and auxiliary revenue drivers · Choosing your hotel operator: What every investor should know · Independent vs chain hotels · Opportunistic development