Real Estate Debt

“Traditional fixed income” refers to strategies invested primarily in U.S. Treasuries, U.S. Corporate bonds (both investment grade and high yield), or municipal bonds.

Commercial real estate debt instruments that are secured by commercial property are subject to risks of delinquency and foreclosure and risks of loss that are greater than similar risks associated with loans made on the security of single-family residential properties. This strategy expects to invest a portion of assets in pools or tranches of commercial mortgage-backed securities (CMBS)*. In a rising interest rate environment, the value of CMBS may be adversely affected when payments on underlying mortgages do not occur as anticipated, resulting in the extension of the security’s effective maturity and the related increase in interest rate sensitivity of a longer-term instrument. Subordinate CMBS are also subject to greater credit risk than those CMBS that are more highly rated. Mortgage loans on commercial properties generally lack standardized terms, which may complicate their structure and increase due diligence costs. Commercial mortgage loans also tend to have shorter maturities than single-family residential mortgage loans and are generally not fully amortizing, which means that they have a significant principal balance or “balloon” payment due on maturity.

* A security backed by commercial and multifamily mortgages rather than residential real estate.

Interests in private funds are typically not listed on an exchange and are subject to legal restrictions on transfer and resale. Investors should not assume they will be able to sell their securities. Private funds are speculative investments, and are not suitable for all investors, nor do they constitute a complete investment program. Investing in securities involves risk. Investors should be able to bear the loss of their investments. See the private offering memorandum for each Forum private fund for complete information and risk factors.