NABTU Capital Strategies Meeting...NABTU Capital Strategies Meeting Monday, June 24th, 2019 Keith Cahill, Managing Director, Head of Taft-Hartley Business and Consultant Strategy Team212-648-0845,

NABTU Capital Strategies Meeting

Monday, June 24th, 2019

Keith Cahill, Managing Director, Head of Taft-Hartley Business and Consultant Strategy Team

212-648-0845, [email protected]

mailto:[email protected]

1 | FOR INSTITUTIONAL USE ONLY | NOT FOR PUBLIC DISTRIBUTION

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J.P. Morgan Taft Hartley Business

STRICTLY PRIVATE l CONFIDENTIAL


JPMAM Taft-Hartley Team

Keith Cahill, Managing Director, is head of the Taft-Hartley client business and North American Consultant Strategy Team at JPMorgan. He is also a

member of the North America Institutional Management committee. Prior to his leadership appointments, Keith was a client advisor, leading the firm’s efforts

in working with Taft-Hartley/Multi-Employer plans. An employee since 2006, Keith previously worked in the Asset Management division of the firm's Real

Estate Investment Group, managing a portfolio of real estate investments valued at more than $6 billion. In addition, he has held positions in the firm's

Internal Audit department, and is a member of the JPMorgan Chase Ambassador program. Before joining the firm, he was with HRH Construction

Management. Keith earned a B.S. in finance and economics from Fordham University. He holds Series 3, 7, 24 & 63 licenses. Keith is also a member of the

International Foundation of Employee Benefit Plans.

Cli

en

t A

dvis

ors

Tom Villanova, CFA, CAIA, Executive Director, is a Client Advisor in the Investment Management division of J.P. Morgan Asset Management. An

employee since 2007, Tom is focused on the firm's efforts in working with Taft-Hartley/Multi-Employer plans. Before his current role, Tom was a client

advisor in JPMAM’s Endowments and Foundations Group, responsible for partnering with endowments, foundations and other not-for-profits to address

market and investment challenges. Prior to this position, Tom worked for J.P. Morgan Private Bank where in his role he worked with sophisticated families,

private equity sponsors, hedge fund managers and their firms on investment solutions and hedging strategies. Tom is a Chartered Alternative Investment

Analyst charterholder and Chartered Financial Analyst charterholder. Tom holds a B.A. in finance from Marquette University. He also holds Series 3, 7 and

66 licenses.

Stephan T. Murphy, Managing Director, is a Client Advisor focused on Taft-Hartley/Multi-Employer Pension Plans. A J.P. Morgan employee

since 1998, previously he was a Client Advisor for Institutional Asset Management across the spectrum of investment strategies covering Corporate, Public

and Multi-Employer Pension Plans nationally. Prior to 2012 he was a Client Portfolio Manager for Global Real Assets focused on J.P. Morgan’s real estate

investment products. Prior to 2007, he was head of the Development and Engineering Group, responsible for development management/investments,

operational support for asset management and engineering/environmental acquisition due diligence. Stephan has participated in over $9 bil lion of acquisitions

and over $5 billion of development projects. Prior to joining the firm, he was employed by O’Connor Realty Advisors, Inc., Eastdil Realty, Lazard Realty and

the City of Englewood, NJ. He is a member of IFEBP, NCCMP, Urban Land Institute, PREA and NAREIM. Stephan holds a B.A. from Syracuse University, as

well as both a B.S. and B.L.A. from SUNY College of Environmental Science and Forestry. He holds Series 7 and 63.

Matthew Johnson, Vice President, is a Client Advisor in the North America Institutional division of J.P. Morgan Asset Management. An employee since

2012, he is a member of the dedicated Taft-Hartley Team, focused solely on working with Taft-Hartley/Multi-Employer Plans. Matthew was previously an

analyst supporting Client Advisor and Relationship Managers’ efforts delivering the firm’s global resources to provide strategic investment management

solutions tailored to the needs of public, corporate, healthcare organizations, and Taft-Hartley/Multi-Employer plans. Before joining the firm in 2012, Matthew

earned a B.A. in economics from Saint Olaf College. He holds Series 3, 7 & 63 licenses. Matthew is also is a member of the International Foundation of

Employee Benefit Plans.

Alex Schneider, CFA, Executive Director, is a client advisor in the Investment Management division of J.P. Morgan Asset Management. An employee

since 2018, Alex is focused on the firm’s efforts in working with Taft-Hartley/Multi-Employer plans as well as public pension plans. Prior to joining the firm,

Alex was a Director at William Blair and was responsible for Taft-Hartley/Multi-Employer new business development and client service. Prior to William

Blair, he was a Relationship Manager at PNC Institutional Investments. Alex is a Chartered Financial Analyst charterholder. Alex holds a B.S. in Finance

and Marketing with distinction from University of Illinois at Chicago and holds his M.B.A w/concentrations in Finance, Econometrics and Accounting from

University of Chicago Booth School of Business. He also holds his Series 7 and 66 licenses.



TAFT-HARTLEY CLIENTS BY ASSET CLASS

Committed to Partnering with Taft-Hartley/Multi-Employer Clients

KEY BUSINESS STATISTICS

$16.4bn Taft-Hartley assets under management as of March 31,

2019.

21 of the 30 largest Taft-Hartley plans invest with J.P. Morgan.

351 Taft-Hartley investment accounts, 57 clients with multiple

strategies.

Over 45 year relationship with longest tenured T-H client.

COMMITMENT TO JOB CREATION

“Veteran Jobs Mission" – Founded by JPMorgan, this Mission

has hired over 500k veterans since 2011, >14,000 by JPMC,

and has raised its target to hiring 1mm veterans.

Nearly $6.5bn of JPMAM Real Estate construction was

completed using 100% union labor from 2006 – 2019, with

$2.0bn from 2019 developments in progress.

Roughly 34mm labor man-hours booked in U.S. development

projects since from 2006-2019.

Support U.S. Manufacturing - Played a key role in restructuring

Chrysler’s debt, facilitating fair agreements between workers

and creditors, saving thousands of jobs and propelling a

comeback by the Detroit auto industry.

RESPONSIBILITY

We have provided over 900 mortgage-free homes to wounded

veterans and their families, through the Military Warriors

Support Foundation, in our commitment to award 1,000

mortgage-free homes to veterans and their families nation-wide.

JPMorgan Asset Management has been active in promoting

Multi-Employer Pension reform in order to strengthen the

system for current and future participants. Our published

research highlights the importance of the Multi-Employer

Pension system to the US Economy, and the critical importance

of finding a viable solution that works for all stakeholders.

39.3%Real Assets

33.0%AM Solutions

12.4%Fixed Income

8.9%US Equity

3.6%International Equity

2.6%Private Equity 0.2%

Cash

Source: Institutional Book of Business (Updated 3/31/2019).



Quality workmanship – Union labor

Source: JPMAM construction stats 2006-Q1 2019. These examples represent selected JPMAM investments under development. However, these types of investments may not be available to or,

if available, may not be selected for investment by any fund in the future.

$6.5B

34M

$2.0B

From 2006 to 2019, we completed nearly

$6.5 billion of union labor construction

Roughly 34 million union labor man hours

were spent on our projects from 2006 to 2019

Our 2019 developments in progress include

$2.0 billion of union labor construction

3Eleven, Chicago

923 Folsom,

San Francisco

1345 Ave of the Americas, NYC

Liberty Harbor North,

Jersey City, NJ

250 East 57th Street, NYC

110 N. Carpenter, Chicago

Fulton West, Chicago

Van Ness, Boston

caec2370-5c90-11e9-aa3e-3a2fcc6727bb

“A”A-rated by the North America's Building

Trades Unions' Real Estate Manager Survey



Senior Management Commitment

• Jamie Dimon fireside chat with Sean McGarvey at NABTU Legislative Conference

• Mary Erdoes engagement, meetings with NABTU, NCCMP, and various clients

• JPMC & Business Roundtable Support of Multi-Employer Pension Reform



Corporate Real Estate Responsible Contracting – 270 Park Avenue Redevelopment

• JPMC employs Union workers in all of its NYC properties (approx. 480 including both commercial and retail spaces)

• We are just completing our HQ2 project which is the swing space / new offices that will house our midtown employees while our new headquarters at

270 Park Avenue is demolished and rebuilt.

• The HQ2 project fit out 1.5m SF of new office space in midtown Manhattan and was delivered under a Project Labor Agreement through which we

spent approx. $370MM on new construction employing a 100% union workforce of nearly 1,200 – 1,500 union men and women. We estimate that

about 25% of the workforce was also diverse

• Looking further ahead we remain committed to using union Labor and are negotiating a Project Labor Agreement with the BCTC for the demolition

and new build of 270 Park where we anticipate a 100% union workforce of approximately 8,000 union men and women and anticipate close to a 30%

diverse workforce will be employed to help us deliver the new HQ of JPMC

• 707 ft.

• 1.5m Gross Square Footage

• Approximately 6,500

occupants, designed for 3,500

• 1200-1300 ft.

• 2.5m Gross Square Footage

• Target occupancy of +/- 13,000

Investment Engines



U.S. Real Estate

• Responsible Contractor Policy

– This Policy is designed to ensure that contractors, managers, consultants and other vendors

engage in fair and responsible employment practices. This policy also provides the flexibility to

ensure commercially reasonable efforts are used to employ vendors who engage in these practices.

– Belief: A workforce that reflects the local community, is well trained, fairly compensated, and

provides a safe working environment produces a superior product.

– A Responsible Contractor, as related to this policy, is one who complies fully with all applicable

labor laws and provides equal employment, a fair wage, and fair benefit in the local market.

Benefits evaluated against the local market may include health insurance, retirement savings,

education, registered apprenticeships, and/or required accreditations

– Fee is not the sole criteria during vendor selection. Consideration is also given to relevant

experience and to a vendor’s reputation of fairness, integrity, ethics, diversity, safety and

dependability.

– Policy applies to contracted and subcontracted work valued over $100,000 at time of award

- 110 N. Carpenter Chicago, IL

- $135mm of Union Labor

- Returns since Inception: 32.4%

- 10 Hudson Yards New York, NY


- Returns since Inception: 22.2%

- 7 Bryant Park New York, NY


- 89% IRR and 2.3x multiple

- One Congress Boston, MA

- Broke ground 6/20/19

expecting 100% union

participation

- 50/50 Joint Venture with

National Real Estate Advisors

STRICTLY PRIVATE | CONFIDENTIAL

10 | FOR INSTITUTIONAL/WHOLESALE/PROFESSIONAL CLIENTS AND QUALIFIED INVESTORS ONLY – NOT FOR RETAIL USE OR DISTRIBUTION

Infrastructure Investments Fund (“IIF”) ─ Open Ended Core / Core+ Infrastructure

Portfolio

Founded in 2006

Open-ended perpetual structure

Core/core+ infrastructure. Focus on Diversification, Inflation Protection

& Yield (“D.I.Y.”)

18 portfolio companies (361 assets) in 25 countries & 11 subsectors

Focus on middle market platform investing – Average transaction size

since 2013 of approx. USD 75mm

Queue currently expected to be 6 months or less from next

quarter end close

Sector Breakdown:Geographic Breakdown:

All data as of December 31, 2018. The advisor seeks to achieve the stated objectives. There can be no guarantee the objectives will be met. 1 The target returns and cash yield are for

illustrative purposes only and are subject to significant limitations. An investor should not expect to achieve actual returns or yield similar to the targets shown above. Please see the complete

Target Return disclosure at the conclusion of the presentation for more information on the risks and limitation of target returns. 2 Yield on NAV, the trailing one-year cash yields were calculated using individual quarterly cash yields. 3 Other includes Japan, Chile and South Africa.4 3.5% invested in Sweden, which is denominated in SEK.

Net Asset Value USD 10.3 billion

Gross Asset Value USD 21.9 billion (53% loan-to-value)

Target Return 8-12% net1

Target Cash Yield 5-7% on NAV1 (cash distributions)

Sector Focus Distribution/Regulated, GDP-Sensitive &

Contracted/Power

Geographic Focus U.S., Canada, Western Europe, and other

OECD

Summary of Key Strategy ElementsStrategy Overview

Existing Portfolio

Seeks to deliver stable cash yield, diversification, attractive risk-adjusted returns and inflation

protection through market cycles

Cash Yield and Distributions as Foundation of Total Return2

$0

$100

$200

$300

$400

$500

$600

$700

$800

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

'11 '12 '13 '14 '15 '16 17 18

US

D m

m

Contracted/Power35.0%

Distribution/Regulated

35.0%

GDP-Sensitive

30.0%US

31.9%

UK21.9%

Western Europe4

31.0%

Australia7.9%

Canada2.7%

Other3

4.6%

be776530-2a65-11e9-bba7-ee036e7797d8 (February 7, 2019)



Infrastructure Investments Fund

• Responsible Contractor Policy

– Designed to guide the selection of independent contractors, including all

operating company managers and their employees, and their subcontractors who

provide construction, repairs, maintenance and infrastructure operating services

to qualifying assets in which the Fund invests

– Seeks to ensure that the selection process for independent contractors will

include among other things, a demonstrated ability to provide reliable and high

quality services which may be evidenced by:

compliance with applicable statutes

payment of fair compensation and benefits to employees

relevant experience, reputation, dependability

ability to provide cost-efficient services

– The Fund supports a safe and healthy and profitable business environment

through market competition, small business development, and control of operating

costs. The Fund also supports and encourages fair compensation and fair

benefits for workers employed by contractors to the extent possible.

– The Policy shall apply to all U.S. infrastructure equity investments where the Fund

owns greater than 50% ownership of, and exercises the controlling management

interest in, the operating company.

– Policy applies to applicable service contracts with aggregate annual minimum

value of

$50mm for new construction capital works

$25mm for ongoing capital works

$15mm for operating or maintenance contracts not involving capital works

- $260 million in equity capital investment

- ~700 construction jobs

- Project Labor Agreement with general contractors and

sub-contractors for the construction of high pressure steel

pipelines within the state



Other Areas of Expertise

PEG was established at JPMorgan

Chase & Co. in 1997

Approximately $27 billion in assets

under management

Serving on over 200 boards

including funds and direct

investments

PEG average tenure

– 28 years: 9 founding members

– 18 years: 19 senior portfolio managers

– 15 years: portfolio management team

Located in New York, London, Hong

Kong, Beijing, and New Delhi

Consistent out-performance over

multiple market cycles

24 Taft-Hartley Investors with

$450MM in AUM

Private Equity Group

Approximately $52 billion in assets

under management

$150mm global research budget

8 flagship strategies

Located in New York, London, Hong

Kong, Tokyo, Singapore, Taipei,

Seoul, and Shanghai

370+ investment professionals with

over 12 years of average experience

149 research analysts with over 9

years of average experience

16 Taft-Hartley Investors with $1.1B

in AUM

Emerging Market Equities

Approximately $256 billion in multi-

asset strategies

45+ year track record of managing

multi-asset portfolios

First Target Date portfolio manger to

be recognized by Morningstar as

Allocation Fund Manager of the Year

Incorporate real participant behavior

into our glide path design

Strong risk-adjusted returns relative

to peers in the industry

All funds rank top quartile over the

last 10 years

11 Taft-Hartley Investors with $1.4B

in AUM

Target Date Funds

Best Practices / Things to look for in your partner



Best Practices / Things to look for in your partner

• Senior level understanding and commitment to the multi-employer market,

demonstrated consistently over time

• A Taft-Hartley team empowered to influence behavior, culture, and cause the

organization to act

• Open dialogue

• A firm that is open to helping, even when a mandate is not on the line

• Open to having difficult conversations. Understands that we won’t agree on

everything.

• Committed to shared values

Documents

NABTU Capital Strategies Meeting...NABTU Capital Strategies Meeting Monday, June 24th, 2019 Keith Cahill, Managing Director, Head of Taft-Hartley Business and Consultant Strategy Team212-648-0845,