KENNETT SQUARE, Pa.--(BUSINESS WIRE)--Union Square Capital Partners, LLC, announced today it acquired the management of PREDEX, a real estate-focused interval fund. PREDEX (Ticker: PRDEX) has $163 million in AUM as of July 27, 2022, bringing total assets of USQ interval funds to approximately $400 million.
“True diversification matters, and most investors have been reminded of that over the first half of this year,” said Thomas Miller, Chief Executive Officer of Union Square Capital Partners. Since both funds were launched, they have consistently demonstrated that non-correlation to the broader markets while still delivering strong risk-adjusted returns is possible, both having a three-year correlation of just -0.02 to the S&P 500 Index as of June 30, 2022. During the same period, the USQ Core Real Estate Fund (Ticker: USQIX) delivered an annualized return of 10.46%, while PRDEX delivered an annualized return of 12.09%.
USQ’s first fund, USQIX, has a primary investment objective to generate a return comprised 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 equity real estate funds that comprise the NCREIF Fund Index — Open-end Diversified Core Equity (“NFI-ODCE”). PREDEX likewise serves as a gateway to private core real estate but implements a slightly different approach that allows for a portion of assets to be held in funds outside of the NFI-ODCE Index.
“We are excited to join the USQ team and feel they are a perfect partner to support growing the PREDEX fund,” said J. Grayson Sanders, founder of PREDEX.
The expansion of the USQ strategies is aligned with long-term plans for the firm. “This acquisition highlights 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 Chief Executive Officer of Chatham Financial.
As of 6/30/2022 |
QTD |
YTD |
1-year |
3-year |
5-year |
Since Inception* |
||||||
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% |
*Inception Date - USQIX: 9/27/2017, PRDEX: 7/01/2016 |
(1) USQIX gross expenses are 1.35% and net expenses are 0.95%. Net fees are based on a contractual fee waiver and reimbursement agreement that will continue indefinitely until terminated by mutual agreement of the Adviser and the Fund, including consent of the Fund’s Board. All investing involves risk, including the possible loss of principal. |
(2) The total annual expense ratio for PRDEX is estimated to be 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 absorb expenses of the Fund until at least August 31, 2022 so that the annual operating expenses (excluding interest and extraordinary expenses, if any) will not exceed 1.10% per annum of the Fund’s average daily net assets. |
The performance quoted represents past performance. Past performance does not guarantee future results. The current performance may be lower or higher than the performance data quoted. The investment return and principal value of the Fund will fluctuate; an investor’s shares, when redeemed, may be worth more or less than their original cost. Performance data current to the most recent month end 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 reimbursement of expenses for the time periods represented. Had fees and expenses not been waived and reimbursed, returns would have been lower. See each fund’s prospectus for more information on current fees and expenses.
About USQ
USQ, a wholly owned subsidiary of Chatham Financial Corp., is an investment management firm providing access to inventive strategies for real asset investing. The USQ platform leverages in-depth knowledge of real estate financing complexities to offer modern investing approaches spanning the needs from registered investment advisors to institutional investors. Union Square Capital Partners, LLC brings low-cost, institutional private real estate to wealth managers.
About Chatham Financial
Chatham Financial is the largest independent financial risk management advisory and technology firm. A leader in debt and derivative solutions, Chatham provides clients with access to in-depth knowledge, innovative tools, and an incomparable team of over 600 employees to help mitigate 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 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.
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.
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).
One cannot invest directly in an index.
Important Disclosures
Before investing in either Fund, you should carefully consider the Fund’s investment objectives, risks, fees and expenses. For a copy of the USQIX prospectus which contains this and other information, please visit www.usqfunds.com or call 1-833-USQ-FUND [1-833-877-3863]. The USQ Core Real Estate Fund is distributed by Quasar Distributors LLC. Please read the Fund’s prospectus carefully before investing.
A copy of the PRDEX prospectus which contains this and other important information, can be obtained by calling 1-877-940-7202. PREDEX is distributed by Northern Lights Distributors, LLC, Member FINRA/SIPC. Please read the Fund’s prospectus carefully before investing.
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 USQ Core Real Estate Fund and PREDEX are continuously-offered, non-diversified, registered closed-end funds with limited liquidity.
PREDEX is distributed by Northern Lights Distributors, LLC.
The USQ Core Real Estate Fund is distributed by Quasar Distributors LLC.
1876-NLD-07/28/2022
