USQ expands investment platform with acquisition of PREDEX

KENNETT SQUARE, Pa.–(BUSINESS WIRE)–Union Square Capital Partners, LLC, announced today that it has acquired management of PREDEX, a real estate-focused interval fund. PREDEX (Ticker: PRDEX) had $163 million in AUM as of July 27, 2022, bringing total USQ interval fund assets to approximately $400 million.

“True diversification matters, and most investors were reminded of that in the first half of this year,” said Thomas Miller, CEO of Union Square Capital Partners. Since launching, both funds have consistently demonstrated that a lack of correlation with the broader markets is possible, while delivering strong risk-adjusted returns, with both having a three-year correlation of just -0.02 to the S&P 500 as of June 30, 2022 During the same period, the USQ Core Real Estate Fund (ticker: USQIX) achieved an annualized return of 10.46%, while the PRDEX achieved an annualized return of 12.09%.

USQ’s first fund, USQIX, has a primary investment objective of generating returns consisting of both current income and long-term capital appreciation with moderate volatility and low correlation to the broader markets. USQ implements this strategy by investing in the core private real estate funds that make up the NCREIF Fund Index — Open-end Diversified Core Equity (“NFI-ODCE”). PREDEX also serves as a gateway to private prime real estate, but takes a slightly different approach that allows a portion of assets to be held in funds outside of the NFI-ODCE index.

“We are excited to join the USQ team and believe they are a perfect partner to support the growth of the PREDEX Fund,” said J. Grayson Sanders, Founder of PREDEX.

The expansion of USQ strategies is in line with the firm’s long-term plans. “This acquisition underscores our commitment to growing our asset management business through both organic growth and strategic acquisitions,” said Matt Henry, managing partner and founder of USQ and CEO of Chatham Financial.

As of 30.06.2022

QTD

YTD

One year

3 year old

5 year old

Since creation*

Class I Shares: USQIX(1)

4.16%

10.82%

26.02%

10.46%

N/A

8.79%

Class I Shares: PRDEX(2)

6.15%

13.08%

29.63%

12.09%

9.46%

8.14%

*Start Date – USQIX: 09/27/2017, PRDEX: 07/01/2016

(1) USQIX’s gross expenses are 1.35% and net expenses are 0.95%. The net fees are based on a contractual fee waiver and refund agreement that will continue indefinitely until terminated by mutual consent of the Adviser and the Fund, including the consent of the Fund’s Board. All investing involves risk, including possible loss of principal.

(2) The total annual expense ratio for PRDEX is estimated at 1.32% according to the Fund’s annual report dated April 30, 2022. The Fund’s investment adviser has contractually agreed to limit its fees and bear the Fund’s expenses until at least 31 August , 2022 so that annual operating expenses (excluding interest and extraordinary expenses, if any) do not exceed 1.10% per annum of the average daily net assets of the Fund.

The performance quoted represents past performance. Past results do not guarantee future results. Current performance may be lower or higher than quoted performance data. Investment returns and fund principal will vary; the investor’s shares, when repurchased, may be worth more or less than their original value. Current performance data through the end of the most recent month may be obtained by calling 1-833-877-3863 for USQIX or 1-877-940-7202 for PRDEX.

Fund returns reflect actual fee waivers and reimbursements for the time periods presented. If fees and expenses were not waived and refunded, returns would be lower. See each fund’s prospectus for more information on ongoing fees and expenses.

About USQ

USQ, a wholly owned subsidiary of Chatham Financial Corp., is an investment management firm providing access to innovative real asset investment strategies. The USQ platform leverages deep knowledge of the complexities of real estate finance to offer modern investment approaches spanning the needs of registered investment advisors to institutional investors. Union Square Capital Partners, LLC offers low-cost, institutional private real estate to wealth managers.

About Chatham Financial

Chatham Financial is the largest independent financial risk management consulting and technology firm. A leader in debt and derivatives solutions, Chatham provides clients with access to deep knowledge, innovative tools and an unparalleled team of over 600 employees to help mitigate the risks associated with interest rate, foreign currency and commodity exposures. Founded in 1991, Chatham serves more than 3,000 companies across a wide range of industries – handling over $750 billion in transaction volume annually and helping businesses maximize their value in the capital markets every day. To learn more, visit chathamfinancial.com.

Definitions and indexes

Correlation is a statistic that measures the extent to which two asset classes (or securities) move relative to each other. Two asset classes that have a high correlation move in the same direction when markets rise and fall. Two asset classes with a negative or inverse correlation move in opposite directions when markets rise and fall. The closer to zero the correlation statistic between two asset classes is, the more independently the asset classes move relative to each other.

S&P 500 Index is a market capitalization-weighted index of 500 common stocks selected by market size, liquidity and industry group representation to represent U.S. equity performance.

NCREIF Fund Index — Open Ended Diversified Equity (NFI-ODCE) consists of private real estate investment funds that meet certain criteria in terms of things like leverage (less than 35%), operations (at least 75% invested in properties that are 75% or more leased ), sector and geographic diversification and investments in prime real estate (at least 75% in offices, industrial properties, apartments and commercial properties).

One cannot invest directly in an index.

Important revelations

Before investing in any fund, you should carefully consider the fund’s investment objectives, risks, fees and expenses. For a copy of USQIX’s prospectus, which contains this and other information, please visit www.usqfunds.com or call 1-833-USQ-FUND [1-833-877-3863]. USQ Core Real Estate Fund is distributed by Quasar Distributors LLC. Please read the fund prospectus carefully before investing.

A copy of PRDEX’s prospectus, which contains this and other important information, may be obtained by calling 1-877-940-7202. PREDEX is distributed by Northern Lights Distributors, LLC, member FINRA/SIPC. Please read the fund prospectus carefully before investing.

Risk Disclosure

Investing involves risk. A major loss is possible. Investing in real estate involves special risks, including (i) changes in general economic and market conditions; (ii) changes in the value of real estate; (iii) risks related to local economic conditions, redevelopment and increased competition; (iv) increases in property taxes and operating expenses; (v) changes in zoning laws; (vi) casualty and condemnation losses; (vii) variations in rental income, neighborhood values ​​or the property’s attractiveness to tenants; (viii) availability of financing and (ix) changes in interest rates and leverage. There are also special risks associated with certain sectors of real estate or real estate operations in general. The fund is not intended to be a full investment program, but instead as a way to help investors diversify into real estate. Diversification does not guarantee profit or guarantee against loss.

USQ Core Real Estate Fund and PREDEX are permanently offered, non-diversified, registered closed-end funds with limited liquidity.

PREDEX is distributed by Northern Lights Distributors, LLC.

USQ Core Real Estate Fund is distributed by Quasar Distributors LLC.

1876-NLD-28.07.2022

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