To achieve this objective, REU's strategy is to acquire a diversified portfolio of real estate assets and, through a wholly owned investment vehicle, Rubicon Finance Europe, a highly diversified portfolio of loan assets.

The strategy of Rubicon Finance Europe is to invest in high yielding loans entered into by private and corporate owners of real estate in Europe whose financing requirements may not be met by traditional institutional lenders and lenders that typically securities loans. Rubicon Finance Europe will concentrate primarily on investment in high yielding loans.

In considering future acquisitions of properties and loans, the key objective will be the enhancement of risk-adjusted returns to Investors, taking into account both initial and expected future returns. Benefits to Investors may include the potential to increase earnings and distributions and the reduction in risk due to the further diversification of the REU Portfolio.

For future acquisitions, the Manager has adopted the following criteria (to be reviewed annually):

• Properties in which interests are acquired are expected to provide:
  
  
  • sustainable net operating income
    
    
  • the opportunity for returns to be generated from repositioning, more effective asset management or redevelopment/development where the risks associated with such projects can be reasonably mitigated
    
    
• Properties to be acquired at or below fair market value
  
  
• Properties located in Europe with a focus on Western Europe
  
  
• Commercial real estate loans entered into by private and corporate owners of real estate in Europe whose financing requirements may not be met by traditional lenders.