2015 Q2 FUND MANAGER S REPORT OLD MUTUAL GLOBAL PROPERTY SECURITIES FUND

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1 2015 Q2 FUND MANAGER S REPORT OLD MUTUAL GLOBAL PROPERTY SECURITIES FUND HEITMAN TEAM FUND MANAGERS INVESTMENT OBJECTIVE To achieve long term capital growth and income through investment in a globally diversified portfolio of property related securities. TOTAL NET ASSETS (MILLIONS): 58.3 FUND DOMICILE: United Kingdom BASE CURRENCY: GBP BENCHMARK: FTSE EPRA/NAREIT Developed Index IMA SECTOR: PROPERTY PERFORMANCE DATA CUMULATIVE PERFORMANCE 1 month 3 month 6 month 1Y 3Y 5Y Fund DISCRETE PERIOD PERFORMANCE 2015 YTD Fund Past performance is not a guide to future performance. Source: Factset. Morningstar. All Rights Reserved. Bid to bid, net income reinvested. A GBP INC terms. All information as at 30/06/2015 unless otherwise stated. PERFORMANCE SUMMARY POSITIVE PERFORMANCE FACTORS Hong Kong led the way with positive returns. M&A activity accelerated in North America with multiple deals.. NEGATIVE PERFORMANCE FACTORS The Greece drama led equities in Europe lower during the quarter. Canada still underperforming as low oil prices impact the Canadian dollar.

2 MARKET REVIEW ASIA-PACIFIC While all three regions recorded negative returns during the second quarter, the Asia-Pacific region suffered the least and is now in line with the global index year-to-date. Hong Kong led the way with positive returns as the market is benefitting from loosening regulations restricting money flows between Hong Kong and mainland China. This, in turn, is having a positive impact on the local office market as financial firms have increased hiring, thereby decreasing vacancy in central offices to 2.3%. Australia was the next best performer due to the continued strengthening of its residential market. Australia s residential market is the preferred market for Chinese money attempting to locate offshore. Japan underperformed the region during the quarter, but was in line with the global benchmark. We continue to see the theme of M&A and capital raising in Asia-Pacific, as the Novion and Federation merger noted last quarter was completed. This merger created the third largest Australian REIT behind Scentre Group and Westfield Group. In addition, Nomura announced it would merge its three REITs (Nomura Master Fund, Nomura Real Estate Office Fund, and Nomura Residential REIT) into a single J-REIT for future growth and stability. On the capital raising side, there were nine J-REITs that announced equity offerings during the quarter. Proceeds have typically been used to fund acquisitions, of which we are now seeing some evidence of J-REITs reaching for more yield in suburban Tokyo or even regional cities away from Tokyo. EUROPE AND UK Greek sovereign debt issues dominated headlines yet again and played havoc with the market, much to the consternation of our investment team. We should not be surprised though, Greece has the dubious honour of holding the title of the first known sovereign debt default by a collection of ten Greek cities in the 4th century BC. Further, since its independence from the Ottoman Empire in the early 1800s, Greece has spent about half of those years either in default or trying to restructure its debt. We can now add 2015 to that list as Greece spent the quarter arguing with Germany over its debts and threatening to not pay. The difference between these latest Greek debt shenanigans and the crisis of has to do with the element of contagion, or fear that the Greek crisis will spread to other countries such as Spain or Italy. Last time, the potential for contagion was very real. This time, though, the ECB has its QE programme in place to support the bonds of the countries that are not trying to commit economic suicide like Greece. As a result, we don t expect much negative spillover from Greece, but the noise from the headlines could cause some near-term volatility in the market. The only question that remains is how this Greek tragedy will end. The Europe region suffered negative returns during the quarter but, like the Asia-Pacific region, outperformed the global benchmark. The Greece situation, as well as rising interest rates likely led to the negative returns for the region despite what appears to be a pretty good macro environment. Unemployment rates in the Euro area continue to fall with the greatest improvements expected to continue in the peripheral countries. The situation in the UK continues to look very good with solid and consistent growth in retail sales as well as industrial production, which is now growing faster than it did last cycle. NORTH AMERICA Even more than the Asia-Pacific region, M&A activity accelerated in North America with multiple deals, both privatizations as well as public-to-public mergers. Private equity firms acquired Home Properties and Excel Trust while public mergers involved Brookfield Asset Management and Associated Estates, Equinix and Telecity, and Gramercy and Chambers Street. We expect this theme to continue but do not expect the same fervour for deal making as the last cycle unless the debt markets loosen terms and grant much higher loan-

3 to-values. That said, the conditions continue to be ripe for M&A as private market values appear to be moving higher than public market pricing. While the economic data have not bounced back as much as we expected following the abysmal Q1 GDP growth, it turns out that perhaps Q1 was not really as bad as we thought because the U.S. Bureau of Economic Analysis admitted they might have a seasonality problem. Hopefully they can get this sorted out so we can stop blaming slow growth during first quarters on bad winters. Looking through to the underlying data we continue to see an economy that is growing and creating enough jobs to stimulate demand for real estate, but not strong enough to warrant new development as supply remains below average in most sectors. PERFORMANCE REVIEW Overall, the Heitman Global Focused Developed Strategy outperformed the benchmark during the quarter. In Asia-Pacific, it was a challenging quarter given the FX volatility and M&A activity; however, our positioning in Australia and China contributed to relative returns. An overweight in Australia contributed to relative performance, holding Ingenia Communities Group (out of benchmark holding) added to relative performance as better than expected development sales led to the outperformance of the stock. Also, holding China Overseas Land & Investment further contributed towards relative performance. However, overweighting Japan detracted from performance during 2Q15. From the stock selection perspective, overweighting Nippon ProLogis REIT detracted from performance as it was the worst performing stock within the JREITs, due to the relative expensive valuations and the expectation of raising potential capital caused the stock to underperform. Overweighting Kenedix Realty Investment and Japan Retail Fund Investment further detracted from performance. The REITs in Japan underperformed as 10-year yields were rising across the globe. In Europe, the portfolio slightly outperformed the benchmark. The performance was primarily driven by allocation, London Specialists and Majors showed a solid outperformance and contributed the most given our large overweight. Our large underweight in Continental Europe Defensive Office (bond proxies) also contributed as the group underperformed strongly. Overweighting Immobiliaria Colonial in Continental Europe cyclical office contributed to relative performance as the increased demand for Spanish (and prime Paris) real estate assets supported the stock during the month of June. On the flip side, the residential stock overall underperformed; even though the group was held at an underweight it detracted from performance due to underperformance of Deutsche Annington held at an overweight; this was a result of raising much more capital than initially communicated. Strong security selection also added to performance in North America during the quarter. In the niche sector, holding Equinix added to the relative performance as their quarterly earnings were better than expected. Also, holding QTS Realty Trust added to relative performance as M&A speculation and recent secondary offering led to its outperformance.

4 In the healthcare sector, overweighting Physician Realty Trust and holding Senior Housing Properties added to relative performance. Healthcare stocks have underperformed as investors tend to exit more yield focused names during times of rising interest rates. On the other hand, overweighting Education Realty and not holding Home Properties detracted from performance. Also, Canada underperformed as Allied Properties reported disappointing fourth quarter results which resulted in the stock underperforming for the quarter. Calloway REIT acquired their development partner Smart Centres, which was well received by the market. FUND ACTIVITY REVIEW Contributors in Q2: Equinix outperformed the benchmark and contributed to relative performance as it was held at an overweight position in comparison to the benchmark. Outperformance was due to better than expected quarterly results. Equity Commonwealth outperformed the benchmark and contributed to relative performance as it was held at an overweight position in comparison to the benchmark. Small cap stocks with a higher likelihood of M&A activity outperformed during the month. Pebblebrook Hotel Trust underperformed the benchmark and contributed to relative performance as it was held at an overweight position in comparison to the benchmark. Hotel stocks outperformed with the rising 10 year yield during the month. Detractors in Q2: Spirit Realty Capital underperformed the benchmark and detracted from relative performance as it was held at an overweight position in comparison to the benchmark. Rising interest rates and management changes have led investors to exit the name. Ventas underperformed the benchmark and detracted from relative performance as it was held at an overweight position in comparison to the benchmark. Attractive valuation relative to peers. ProLogis underperformed the benchmark and detracted from relative performance as it was held at an overweight position in comparison to the benchmark. The decline of the euro has been perceived as a negative for PLD as they have exposure to Europe. FUND POSITIONING AND MANAGER S OUTLOOK In the Asia-Pacific region, while much of the financial media appear to be focused on the rollercoaster ride the Chinese stock market is on, there are a number of positive trends that we are positioning to capture. These trends include the strong office market conditions in Japan and Hong Kong with rising demand and rents. Tokyo s office market continues to strengthen and the condo market is quite healthy and prices continue to rise. In addition, development cost increases appear to be moderating, so we are positioned toward developers that will benefit from the strength in both the office and condo markets. In Australia, the residential market continues to thrive amid local demand as well as significant capital flows from Chinese buyers looking to diversify their wealth offshore. We

5 have seen this result in strong earnings for developers. Finally, valuations have become so cheap that we have been increasing our positions in Singapore. As in prior periods, Heitman remains constructive on an improving European economy and on the strength of the UK and Nordic real estate fundamentals despite having a mid-term cautious view on potential political contagion from Greece that could keep market volatility at a high level. Capital inflows into already pricey markets will remain a concern as investment spreads out from the favoured London and Paris metro areas. Property fundamentals and transactional markets remain healthy for prime assets in Continental Europe, the UK and the Nordics. The peripheral prime assets, e.g., Spain and Ireland, will also benefit from solid transactional and improving occupational activity, as well as a shortage of supply. This should support further rate compression and spreads for highquality secondary assets are also expected to tighten further. Capital markets are supportive with increasing corporate debt issuance and appetite for asset backed securities supported by the ECB s purchase plan. M&A is expected to remain an investable theme going forward, given limited capital redeployment opportunities and increasing fragmentation of the universe on the back of solid primary equity issuance in peripheral Europe, the Nordics and Germany. In the near term, though, capital raising could be weaker on the back of the Greek situation. Anecdotally, we have heard of a few IPOs cancelled or postponed due to the volatility and uncertainty created by the Greece situation. Our thematic positioning has not changed materially overall in Europe. We remain overweight in London specialists and the Nordics. We increased our exposure to Spain and Italy and hold a large overweight in growth stocks to benefit from the slow but continuing cyclical recovery in Europe. Finally, for North America, property fundamentals continue to improve due to low supply and a modestly improving economy. We are focused on when the Fed will raise rates, but do not expect interest rates to meaningfully increase this year. It is possible the fear of a Fed rate hike will be higher than the actual event, wherein the market will settle and refocus once the uncertainty of the first rate hike is removed. Given the near-term uncertainty, our active share is even more focused on stock selection than usual in the US. That said, we continue to have a cyclical bias with an underweight in the triple net lease sector and an overweight in the industrial sector. We maintain our overweight to stocks we view as M&A candidates given the aforementioned active deal environment, and thus increased our exposure to more small and mid-cap stocks than large caps. Finally, our turnover has gone down as lower dispersion year-to-date means fewer stocks are meeting our trigger points to change positions.

6 ONLINE Download fund data and read investment updates from this fund manager at CLIENT SERVICES Old Mutual Investment Management Limited P O Box 10278, Chelmsford, Essex, CM99 2AR Building better solutions. The value of an investment and the income from it can go down as well as up and investors may not get back the full amount invested. Past performance is not a guide to future performance. Exchange rates may cause the value of overseas investments to rise or fall. This communication has been prepared for general information only. It does not purport to be all-inclusive or contain all of the information which a proposed investor may require in order to make a decision as to whether to invest in the Fund. Nothing in this document constitutes a recommendation suitable or appropriate to a recipient s individual circumstances or otherwise constitutes a personal recommendation. We recommend that this document is read in conjunction with the latest factsheet, which provides additional information on the fund's main holdings, asset breakdown, product details and investment manager. No investment decisions should be made without first reviewing the prospectus and the key investor information document of the Fund which can be obtained from This communication provides information relating to a fund known as Old Mutual Global Property Securities Fund (the Fund ). This communication is issued by Old Mutual Global Investors (UK) Limited (trading name Old Mutual Global Investors), a member of the Old Mutual Group. Old Mutual Global Investors is registered in England and Wales under number and its registered office is 2 Lambeth Hill London EC4P 4AJ. Old Mutual Global Investors is authorised and regulated by the UK Financial Conduct Authority ( FCA ) with FCA register number and is owned by Old Mutual Plc, a public limited company limited by shares, incorporated in England and Wales under registered number