KENNETT SQUARE, Pa.--(BUSINESS WIRE)--Union Square Capital Partners’ USQ Core Real Estate Fund (Ticker: USQIX), a closed-end interval fund, has exceeded $100 million in assets under management.
The Fund’s primary investment objective is to generate a return comprised of both current income and long-term capital appreciation with moderate volatility and low correlation to the broader markets. Union Square Capital Partners implements this strategy by investing in the core private equity real estate funds that comprise the NCREIF Fund Index — Open End Diversified Core Equity (NFI-ODCE). NCREIF’s strict index inclusion requirements include “Core” style private equity real estate utilizing low leverage in stable U.S. operating properties with high occupancy rates, leased to tenants with high credit ratings.
“Passing the $100 million AUM mark is a significant validation of our investment approach,” said Thomas Miller, CEO and CIO of Union Square Capital Partners, the investment adviser to USQIX. “Due to the strong returns and low correlation, we continue to see strong adoption of the Fund, as investment professionals seek out alternatives to fixed income and traditional equity.”
Since the Fund’s inception1 four years ago, USQIX has generated strong risk-adjusted returns with almost no correlation to the broader markets. As of September 30, 2021, the three-year correlation to the S&P 500 Index and the BBgBarc U.S. Agg Bond Index was 0.01 and -0.01, respectively. Additionally, the Fund has distributed 16 quarterly distributions since inception1 at an annualized rate of 4.16% 2, most of which is tax deferred.
Matt Henry, Managing Partner and Chairman of Chatham Financial, added, “We are excited for Union Square Capital Partners, a subsidiary of Chatham Financial, to reach this milestone. Cost-conscious, high-quality private real estate can enhance the risk/return profile of most portfolios. Yet, for many investors, private real estate is underrepresented. We launched this business to provide the RIA community with access to a traditionally inaccessible asset class.”
About Union Square Capital Partners
Union Square Capital Partners, LLC is a wholly owned subsidiary of Chatham Financial. It was formed to provide access to fee-conscious, institutional quality investment products, to create clarity through their product design and customer interactions, and to bring trust to the marketplace. Their goal is to impact the markets they serve in an attempt to make them more transparent, efficient, and less risky for participants. They want to be viewed as a partner rather than a third-party provider. They do this by constantly putting clients’ long-term interests first.
1. Inception date is 9/27/2017
2. Distributions are paid quarterly. Annual distribution rate is calculated based on the distribution amounts paid on a per-share basis over the trailing four quarters divided by the NAV at the beginning of the period. Distributions include all distribution payments regardless of source and may include net income, capital gain, and/or return of capital (ROC). ROC should not be confused with yield or income. A Fund’s Section 19a-1 Notice contains additional distribution composition information and may be obtained by visiting www.usqfunds.com. Final determination of a distribution’s tax character will be made on Form 1099 DIV and sent to shareholders. On a tax basis, the estimated component of the cumulative distribution since inception includes a return of capital of 67% per share. This amount is an estimate and the actual amounts and sources for tax reporting purposes may change upon final determination of tax characteristics and may be subject to change based on tax regulations. See additional disclosures below.
Definitions
Correlation is a statistic that measures the extent to which two asset classes (or securities) move in relation to each other. Two asset classes that have a high correlation move in the same direction as markets rise and fall. Two asset classes with negative or inverse correlation move in opposite directions as markets rise and fall. The closer the correlation statistic between two asset classes is to zero, the more independently the asset classes move with respect to each other.
Indexes
BBgBarc U.S. Agg Bond Index — The Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged market value-weighted index for U.S. dollar denominated investment-grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities with maturities of at least one year.
NFI-ODCE — The NCREIF Fund Index - Open End Diversified Core Equity (NFI-ODCE) consists of private real estate equity funds that meet certain criteria with respect to such things as leverage (less than 35%), operations (at least 75% invested in properties that are 75% or more leased), sector and geographic diversification, and investment in core real estate (at least 75% in office, industrial, apartment and retail properties)
S&P 500 — Index S&P 500 Index is a market capitalization-weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance.
One cannot invest directly in an index.
Risk Disclosures
Investing involves risk. Principal loss is possible. Investing in real estate entails special risks, including (i) changes in general economic and market conditions; (ii) changes in the value of real estate properties; (iii) risks related to local economic conditions, overbuilding 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 appeal of property to tenants; (viii) the availability of financing and (ix) changes in interest rates and leverage. There are also special risks associated with particular real estate sectors, or real estate operations generally. The Fund is not intended to be a complete investment program, but instead as a way to help investors diversify into real estate. Diversification does not ensure a profit or guarantee against a loss.
The Fund’s distribution policy is to make quarterly distributions to shareholders. The level of quarterly distributions (including any return of capital) is not fixed. However, this distribution policy is subject to change. The Fund’s distribution amounts are calculated based on the ordinary income received from the underlying investments, including short-term capital gains realized from the disposition of such investments. Shareholders should not assume that the source of a distribution from the Fund is net profit. A portion of the distributions consist of a return of capital based on the character of the distributions received from the underlying holdings, primarily Real Estate Investment Trusts. The final determination of the source and tax characteristics of all distributions will be made after the end of the year. Shareholders should note that return of capital will reduce the tax basis of their shares and potentially increase the taxable gain, if any, upon disposition of their shares. There is no assurance that the Fund will continue to declare distributions or that they will continue at these rates.
Any tax or legal information provided is merely a summary of our understanding and interpretation of some of the current income tax regulations and it is not exhaustive. Investors must consult their tax advisor or their particular situation. Neither the Fund nor any of its representatives may give legal or tax advice.
Before investing in the Fund, you should carefully consider the Fund’s investment objectives, risks, fees and expenses. For a copy of a prospectus which contains this and other information, please visit our website at www.usqfunds.com or call 1-833-USQ-FUND [1-833-877-3863]. Please read the Fund’s prospectus carefully before investing.
The USQ Core Real Estate Fund is distributed by Quasar Distributors LLC.