1. Real Estate Investing: A Private Foundation’s Approach Presented by: D. Ellen Shuman Vice President & Chief Investment Officer Carnegie Corporation of New York

2. 2 “My desire is that the work which I hav [sic] been carrying on, or similar beneficial work, shall continue during this and future generations.” Andrew Carnegie, November 10, 1911 First Letter of Gift Carnegie Corporation of New York Perpetuity as a Mandate

3. 3 Carnegie Grants with Impact TIAA-CREF (1915) Gunner Myrdal, An American Dilemma: The Negro Problem and American Democracy (1944) Sesame Street (1969) New York City small schools initiative (2003)

4. 4 Carnegie Corporation of New York Actual Asset Allocation by Fiscal Year

5. 5 Carnegie Corporation of New York Actual Real Estate Allocation by Fiscal Year

6. 6 Carnegie Corporation of New York Annual Performance (FY ending 9/30)

7. 7 Carnegie Corporation of New York Current Property Exposure by Type

8. 8 Carnegie Corporation of New York Private Real Estate Portfolio Characteristics 20 private real estate managers 40 commingled funds $200M market value (out of total Carnegie portfolio value of ~$2.1B) 55% average property level leverage 230 individual properties 1/3 in Southern California

9. 9 Carnegie Corporation of New York Top 10 Properties by Equity Exposure Three managers own these assets that represent 27% of total value of the real estate portfolio

10. While a Few of Our Holdings Are Landmarks…

11. …Much of the Portfolio Is Far Less Glamorous

12. 12 Carnegie Corporation of New York Manager Selection Criteria “Local sharpshooter” –Focus on property type and/or geographic market Proper alignment of interests –Meaningful co-investment –Back-ended incentive compensation widely distributed among the team Principal ownership of the firm Qualitative factors –Principal mentality –Investment discipline w/ ability to assess risk as well as return