The aggregate past performance information is calculated based solely on realized investments through June 30, 2021, all of which were made by some of the Principals at their prior firms, prior to the formation of Palladius Capital Management. Principals of Palladius Capital Management utilized special purpose vehicles to pair institutional and family office investors with investment opportunities in multifamily and student housing assets (the “Pre-Palladius Investments”). The performance data has not been audited.

The Gross IRR calculation is made on the basis of the actual timing of investment inflows and outflows, aggregated at least monthly, and the return is annualized.  The gross IRR calculation is calculated at the investment level and does not represent the actual contributions from and distributions to investors in a fund.  An IRR is a function of the length of time from the initial investment to ultimate realization and, for a given dollar amount realized, the IRR will decrease as the investment holding period increases.  The “Gross IRR” calculation measures deal-level returns for the Pre-Palladius Investments.  Because these investments were not made through a fund, the Pre-Palladius Investments were not subject to the same types of fees and expenses as the Fund or timing differentials between investor cash flows and investment cash flows. Management fees, partnership expenses, carried interest and other expenses borne by investors in a typical investment (including applicable taxes) will reduce returns, and in the aggregate, are expected to be material.  There is no guarantee that future results will achieve these returns.

Unrealized IRR is calculated based on the indicated holding period and assumes the applicable property is sold at the end of such holding period for the fair market value of the property as of March 31, 2021. Performance results include unrealized values of investments and there can be no assurance that the unrealized values will, in fact, be realized at the present valuations. Returns will vary as gains or losses are realized on its presently unrealized holdings if and when they are sold. There can be no guarantee that future funds will be able to invest in the same or similar opportunities or be able to implement their investment strategies or achieve their investment objectives. While the valuations of unrealized values are based on assumptions that are believed to be reasonable under the circumstances, the actual realized returns on unrealized holdings will depend on, among other factors, future operating results, the value of the assets and market conditions at the time of disposition, any related transaction costs and the timing and manner of sale, all of which may differ from the assumptions on which the valuations used in the prior performance data contained herein are based.  Accordingly, the actual realized returns on these unrealized holdings may differ materially from the returns indicated herein.

The Pro Forma Net IRR assumes that all of the realized Pre-Palladius Investments (through June 30, 2021) were held in a single investment vehicle with a 1.5% management fee on contributed capital, a preferred return of 7% and a carried interest of 30% thereafter with a catch-up, $200,000 of organizational expenses which is amortized evenly through 3 years, administrative and operating expenses of $90,000 fixed and 0.11% variable on committed capital annually. The Pro Forma Net IRR is based upon the foregoing assumptions and does not reflect actual historical performance results. There can be no assurance that future investment will achieve these pro forma results. Material changes in market or economic conditions may prevent PCM from employing the strategy which produced these results.