Form N-CSR
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21465
CBRE Clarion Global Real Estate Income Fund
(Exact name of registrant as specified in charter)
201 King of Prussia
Road, Suite 600
Radnor, PA 19087
(Address of principal executive offices) (Zip code)
T. Ritson Ferguson,
President and Chief Executive Officer
CBRE Clarion Global Real Estate Income Fund
201 King of Prussia Road, Suite 600
Radnor, PA 19087
(Name and address of agent for service)
Registrant’s telephone number, including area code: 1-888-711-4272
Date of fiscal year end: December 31
Date of reporting period: June 30, 2012
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the
transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its
regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information
specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and
Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Report(s) to Stockholders.
The semi-annual Report of CBRE Clarion Global Real Estate Income Fund (the “Trust”) transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 is as follows:
CBRE CLARION GLOBAL REAL ESTATE
INCOME FUND
Semi-Annual Report for the Six Months Ended June 30, 2012
CBRE Clarion Global Real Estate Income Fund
(the “Trust”), acting in accordance with an exemptive order received from the Securities and Exchange Commission (“SEC”) and with approval of its Board of Trustees (the “Board”), has adopted a managed distribution
policy (the “Policy”) with the purpose of distributing over the course of each year, through periodic distributions as nearly equal as practicable and any required special distributions, an amount closely approximating the total taxable
income of the Trust during such year and all of the returns of capital paid by portfolio companies to the Trust during such year. In accordance with its Policy, the Trust distributes a fixed amount per common share, currently $0.045, each month to
its common shareholders. This amount is subject to change from time to time in the discretion of the Board. Although the level of distributions is independent of fund performance, the Trust expects such distributions to correlate with its
performance over time. Each monthly distribution to shareholders is expected to be at the fixed amount established by the Board, except for extraordinary distributions and potential increases or decreases in the final dividend periods for each year
in light of the Trust’s performance for the entire calendar year and to enable the Trust to comply with the distribution requirements imposed by the Internal Revenue Code. Over time, the Trust expects that the distribution rate in relation to
the Trust’s Net Asset Value (“NAV”) will approximately equal the Trust’s total return on NAV.
The fixed amount of distributions will
be reviewed and amended as necessary by the Board at regular intervals with consideration of the level of investment income and realized gains. The Board strives to establish a level regular distribution that will meet the Trust’s requirement
to pay out all taxable income (including amounts representing return of capital paid by portfolio companies) with a minimum of special distributions. The Trust’s total return in relation to changes in NAV) is presented in the financial
highlights table. Shareholders should not draw any conclusions about the Trust’s investment performance from the amount of the current distribution or from the terms of the Trust’s managed distribution policy. The Board may amend or
terminate the managed distribution policy without prior notice to Trust shareholders.
Shareholders should note that the Trust’s Policy is subject
to change or termination as a result of many factors. The Trust is subject to risks through ownership of its portfolio company holdings including, but not limited to, declines in the value of real estate held by the portfolio company, risks related
to general and local economic conditions, and portfolio company losses. Moreover, an economic downturn could have a material adverse effect on the real estate markets and on real estate companies in which the Trust invests, which in turn could
result in the Trust not achieving its investment or distribution objectives thereby jeopardizing the continuance of the Policy. Please refer to the prospectus for a fuller description of the Trust’s risks.
Table of Contents
CBRE CLARION GLOBAL REAL ESTATE INCOME FUND SEMI-ANNUAL REPORT 2012
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| SEMI-ANNUAL REPORT 2012 |
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1 |
Letter to Shareholders
T. Ritson Ferguson
Steven D. Burton
Dear Shareholder:
We
are pleased to present the 2012 Semi-Annual Report for the CBRE Clarion Global Real Estate Income Fund (the “Trust”).
Performance Review
Global real estate stocks, as measured by the S&P Developed Property Index (S&PDPI) (1), delivered positive returns during the first half of the year. Generally solid 2011 earnings results coupled with an
improving economic landscape provided the backdrop for very strong first quarter performance (+12.8%). Despite a 6.3% pullback in May, second quarter results also remained in positive territory at 2.0% as listed property company returns
continued to be buoyed by a number of key factors, including: (1) an attractive dividend yield relative to other asset classes; (2) a healthy near-term earnings and dividend growth outlook; and (3) property companies’ strong
balance sheets and continued access to attractively priced capital.
During the first six months of 2012, the S&PDPI rose 15.0%
and the MSCI REIT Preferred Index (MSRPI) (2) rose 6.5%. The Trust’s
Net Asset Value Return (“NAV Return” i.e., NAV gain plus dividends) was 13.4%, equal to the return of a blended index comprised of 80% S&PDPI and 20% MSRPI (3). On average during the first half of 2012, 17% of the Trust’s portfolio was invested in preferred stock. The
Trust’s portfolio positions for both preferred and common stocks outperformed the year-to-date performance of the MSRPI and S&PDPI indices respectively. Security selection in the United States and Australia were particularly helpful to
performance. The Trust’s market price return of 19.8% (i.e., stock price appreciation plus reinvested dividends) exceeded the NAV Return due to the significant narrowing of the discount of the Trust’s share price to NAV (from 16.0% at
year-end to 11.5% at June 30). The Trust continues to employ little leverage in an effort to reduce volatility.
The Trust paid total dividends of
$0.27 per share for the first six months of 2012, consisting of six regular monthly dividends of $0.045 per share. The annualized dividend of $0.54 per share represents a 6.8% yield on share price and a 6.0% yield on NAV as of June 30. The
Board continues to review the sustainability of the Trust’s regular monthly dividend in light of the current market environment and the dividends that have been paid out over the life of the Trust (which amount to $11.92 per share since
inception in 2004). Based on income and realized gains to date this year, the Board has thus far seen fit to maintain the monthly dividend at the current level rate.
The Trust’s dividend is established by the Board at regular intervals with consideration of the portfolio’s level of investment income, potential capital appreciation and market conditions. The Board
strives to establish a level monthly dividend that, by the end of the year, satisfies the requirement (under applicable tax regulations) to distribute all income and realized gains, with a minimum of special distributions.
| (1) |
The S&P Developed Property Index is an unmanaged market-weighted total return index which consists of over 350 real estate companies from 22 developed markets with a free
float total market capitalization of at least U.S. $100 million that derive more than 60% of their revenue from real estate development, management, rental and/or direct investment in physical property. |
| (2) |
The MSCI REIT Preferred Index is a preferred stock market capitalization weighted index of all exchange traded preferred securities of equity REITs. |
| (3) |
We include the return of this “blended index” as a reference point, since the Trust invests in both common and preferred stocks issued by listed property companies. The
Trust does not have a formal performance benchmark. |
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| 2 |
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CBRE CLARION GLOBAL REAL ESTATE INCOME
FUND |
Portfolio Review
The Trust’s investments remain well-diversified by property type and geography as shown in the pie charts below. The geographic mix of the portfolio has been relatively stable during the past six months. At
June 30, the Trust’s portfolio was 52% invested in the Americas, 10% in Europe, 25% in Asia-Pacific, with 12% invested in preferred stock of US real estate companies (down from 19% this time last year). Retail is the largest property type
represented in the portfolio at 46%. We continue to favor retail properties (particularly top-quality malls) because historically these properties have shown more stable cash flows during economic slow-downs than other commercial property types. The
Trust also has meaningful positions in the industrial, apartment and office sectors.
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Geographic
Diversification (4) |
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Sector
Diversification
(4) |
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Market Commentary
The issue regarding the market outlook is the deteriorating prospects for economic growth around the globe. While the resolution of the European financial system has captured many of the headlines, the core
issue remains the anemic level of economic growth in most parts of the world. Real GDP growth projections for 2012 globally have generally been revised downward over the past year, as shown by the two charts below. The first chart reflects the
Western world and the second chart reflects the Asia-Pacific region. Projections have been revised downward more recently and most notably for the Asia-Pacific region:
Economist Poll of Forecasters
Evolution of the GDP
Forecast for 2012
| (4) |
Percentages presented are based on managed assets and are subject to change. Geographic and Sector diversification are unaudited. |
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| SEMI-ANNUAL REPORT 2012 |
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3 |
With economic releases during the second quarter generally disappointing, the probability of 2012 GDP growth
projections being revised further downward has increased. While we think concerns of a “double dip” scenario are likely overdone, there is little doubt that economic growth remains sluggish. An index of global leading indicators in the
following chart reveals the recent loss of momentum of the global economic rebound:
Headline Global Leading Indicators vs. Global Industrial Production
The case for listed property companies remains positive, however, in the current environment of sluggish economic growth.
Listed property companies have many investment attributes that are appealing in the current uncertain economic environment. This should provide support for the asset class, particularly among investors seeking a high component of current income in
the total return proposition. These attributes include: (1) compelling relative yield in a low yield world with a healthy near-term growth outlook; (2) stable cash flows generated from generally improving property fundamentals; and
(3) attractive real estate valuations.
Property companies provide attractive dividend yields. The average dividend yield for a global real estate
securities strategy is now in the 3-4% range. This compares favorably with fixed income alternatives. Additionally, we estimate that dividend growth this year and next will be in the high single-digit range, driven by a combination of improving
company cash flows as well as an increase in dividend payout policies which remain conservative. The relative yield proposition versus fixed income alternatives has only improved with the continued decline of bond yields. As shown in the following
chart, current spreads between dividend yields of listed property companies and local 10-year sovereign bond yields for most major global markets are materially wider than long-term average spreads.
Indicated Dividend Yields
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| 4 |
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CBRE CLARION GLOBAL REAL ESTATE INCOME
FUND |
Real estate cash flows remain resilient amidst the economic uncertainty. Despite the global economic slowdown, our
underwritten earnings projections of funds from operations (cash flow per share) are now higher than what we projected at the beginning of the year. More specifically, our current global weighted average estimates for cash flow growth per share for
2012 and 2013 are 110 basis points higher than what we had projected at December 31, 2011. Projected earnings are higher as a result of a combination of improving revenues, lower expenses (partly via lower financing costs), and external growth,
which is an increasing component of earnings growth. While a rising expectation for revenue growth seems unusual given the changing economic backdrop, listed property companies are benefiting partly from an increase in their market share of tenant
demand. This is being driven by the higher-than-average quality of their property portfolios and the superior property locations versus the average private landlord in many markets globally. The chart below reflects our current earnings growth
outlook.
Regional Earnings Growth
Forecast
Listed real estate is cheaper than private real estate. We estimate that listed property company real estate now trades at
a 4% discount to our estimate of the underlying real estate value within our net asset value (NAV) estimates. NAV relationships by major geography are displayed in the chart below. Canada and the U.S. are the only markets with observable premiums to
NAV, and in the case of the U.S. the premium disappears when you focus on the pricing of the “core” property types (i.e., retail, office, industrial and apartments). The discounts in the Asia-Pacific region are particularly notable on both
an absolute basis as well as relative to long-term averages.
NAV Premium/Discount by Region
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| SEMI-ANNUAL REPORT 2012 |
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5 |
Total returns for property stocks will continue to be anchored by an average dividend yield which remains in the 3-4%
range and earnings growth that we project will be 6-7% this year and next. The persisting discount to NAV of listed real estate company stocks in most markets suggests that there remains the possibility of further multiple expansion. For these
reasons, we continue to be constructive on the total return prospects for a portfolio of global property stocks over the course of the coming year.
We
appreciate your continued faith and confidence.
Sincerely,
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| T. Ritson Ferguson |
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Steven D. Burton |
| President & Chief Executive Officer |
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Co-Portfolio Manager |
| Co-Portfolio Manager |
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The views expressed represent the opinion of CBRE Clarion Securities and are subject to change and are not intended as a forecast or
guarantee of future results. This material is for informational purposes only, does not constitute investment advice, and is not intended as an endorsement of any specific investment. Information and opinions are derived from proprietary and
non-proprietary sources.
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| 6 |
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CBRE CLARION GLOBAL REAL ESTATE INCOME
FUND |
Portfolio of Investments (unaudited)
June 30, 2012
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| Shares |
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Market
Value ($) |
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Real Estate Securities* – 98.3% |
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Common Stock – 85.8% |
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Australia – 13.2% |
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5,453,037 |
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CFS Retail Property Trust Group |
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$ |
10,843,895 |
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2,776,835 |
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Charter Hall Retail Real Estate Investment Trust |
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9,421,568 |
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38,529,000 |
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Dexus Property Group |
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36,729,567 |
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1,410,723 |
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Goodman Group |
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5,307,047 |
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3,536,700 |
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GPT Group |
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11,927,220 |
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4,102,827 |
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Westfield Group |
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39,953,234 |
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8,119,662 |
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Westfield Retail Trust |
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23,720,724 |
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137,903,255 |
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Canada – 11.3% |
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200,100 |
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Calloway Real Estate Investment Trust |
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5,495,905 |
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500,000 |
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Crombie Real Estate Investment Trust (a) |
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7,209,770 |
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884,800 |
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H&R Real Estate Investment Trust |
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21,264,015 |
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| |
2,082,900 |
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InnVest Real Estate Investment Trust |
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9,602,854 |
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440,000 |
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InnVest Real Estate Investment Trust (a) |
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2,028,545 |
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700,000 |
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Primaris Retail Real Estate Investment Trust (a) |
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16,177,351 |
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| |
2,078,800 |
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RioCan Real Estate Investment Trust |
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56,484,143 |
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118,262,583 |
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France – 3.4% |
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65,700 |
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Altarea |
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8,504,412 |
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351,122 |
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Societe de la Tour Eiffel |
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17,587,492 |
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49,220 |
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Unibail-Rodamco SE |
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9,063,329 |
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35,155,233 |
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Germany – 0.5% |
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167,161 |
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GSW Immobilien AG |
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5,723,420 |
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Hong Kong – 3.5% |
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8,913,000 |
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Link REIT (The) |
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36,367,398 |
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Japan – 2.6% |
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840 |
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Activia Properties, Inc. (b) |
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4,826,921 |
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620 |
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Frontier Real Estate Investment Corp. |
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4,973,054 |
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10,652 |
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Japan Retail Fund Investment Corp. |
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16,887,806 |
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26,687,781 |
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Netherlands – 2.7% |
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118,455 |
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Corio NV |
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5,205,766 |
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357,401 |
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Eurocommercial Properties NV |
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12,359,503 |
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277,161 |
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Vastned Retail NV |
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10,810,458 |
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28,375,727 |
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| Shares |
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Market
Value ($) |
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New Zealand – 0.7% |
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9,050,000 |
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Goodman Property Trust |
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$ |
7,237,567 |
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Singapore – 5.1% |
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6,735,000 |
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Ascendas Real Estate Investment Trust |
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11,430,573 |
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16,748,000 |
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CapitaMall Trust |
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25,251,563 |
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6,761,600 |
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Global Logistic Properties Ltd. (b) |
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11,155,466 |
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4,757,000 |
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Suntec Real Estate Investment Trust |
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5,069,427 |
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52,907,029 |
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United Kingdom – 3.5% |
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1,939,300 |
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Land Securities Group Plc |
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22,462,922 |
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4,045,110 |
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Segro Plc |
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13,786,716 |
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36,249,638 |
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United States – 39.3% |
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795,353 |
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Brandywine Realty Trust |
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9,814,656 |
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826,200 |
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Camden Property Trust (c) |
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55,908,954 |
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| |
668,632 |
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CBL & Associates Properties, Inc. (c) |
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13,065,069 |
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1,472,700 |
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Extra Space Storage, Inc. |
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45,064,620 |
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327,769 |
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General Growth Properties, Inc. |
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5,929,341 |
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1,533,200 |
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Liberty Property Trust |
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56,483,088 |
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1,183,385 |
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Macerich Co. (The) |
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69,878,884 |
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1,847,070 |
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OMEGA Healthcare Investors, Inc. |
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41,559,075 |
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714,731 |
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ProLogis, Inc. |
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23,750,511 |
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100,000 |
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Regency Centers Corp. |
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4,757,000 |
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1,040,500 |
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Retail Properties of America, Inc., Class A |
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10,113,660 |
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194,219 |
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Simon Property Group, Inc. (c) |
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30,232,130 |
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1,211,534 |
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UDR, Inc. |
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31,306,039 |
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63,760 |
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Ventas, Inc. (c) |
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4,024,531 |
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712,120 |
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Verde Realty (b)(d) |
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8,545,440 |
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410,432,998 |
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Total Common Stock
(cost $731,346,822) |
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895,302,629 |
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See notes to financial statements.
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| SEMI-ANNUAL REPORT 2012 |
|
7 |
Portfolio of Investments concluded
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| Shares |
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Market
Value ($) |
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Preferred Stock – 12.5% |
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United States – 12.5% |
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80,500
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Apartment Investment & Management Co., Series U |
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$ |
2,022,563 |
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| |
480,000 |
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|
|
BioMed Realty Trust, Inc., Series A |
|
|
|
|
12,172,800 |
|
| |
51,000 |
|
|
|
|
CBL & Associates Properties, Inc., Series C |
|
|
|
|
1,299,480 |
|
| |
100,000 |
|
|
|
|
CBL & Associates Properties, Inc., Series D |
|
|
|
|
2,555,000 |
|
| |
257,339 |
|
|
|
|
Cedar Realty Trust, Inc., Series A |
|
|
|
|
6,549,278 |
|
| |
171,300 |
|
|
|
|
Corporate Office Properties Trust SBI MD, Series J |
|
|
|
|
4,294,491 |
|
| |
320,000 |
|
|
|
|
Digital Realty Trust, Inc., Series E |
|
|
|
|
8,598,400 |
|
| |
121,700 |
|
|
|
|
Eagle Hospitality Properties Trust, Inc., Series A (b) |
|
|
|
|
360,536 |
|
| |
400,000 |
|
|
|
|
Entertainment Properties Trust, Series D |
|
|
|
|
10,104,000 |
|
| |
20,000 |
|
|
|
|
Glimcher Realty Trust, Series F |
|
|
|
|
505,400 |
|
| |
645,700 |
|
|
|
|
Glimcher Realty Trust, Series G |
|
|
|
|
16,297,468 |
|
| |
150,000 |
|
|
|
|
iStar Financial, Inc., Series F |
|
|
|
|
2,655,000 |
|
| |
765,000 |
|
|
|
|
iStar Financial, Inc., Series I |
|
|
|
|
13,188,600 |
|
| |
520,000 |
|
|
|
|
LaSalle Hotel Properties, Series G |
|
|
|
|
13,088,400 |
|
| |
268,000 |
|
|
|
|
Pebblebrook Hotel Trust, Series A |
|
|
|
|
7,001,500 |
|
| |
442,500 |
|
|
|
|
SL Green Realty Corp., Series C |
|
|
|
|
11,385,525 |
|
| |
200,000 |
|
|
|
|
SL Green Realty Corp., Series D |
|
|
|
|
5,092,000 |
|
| |
142,600 |
|
|
|
|
Taubman Centers, Inc., Series G |
|
|
|
|
3,623,466 |
|
| |
373,500 |
|
|
|
|
Taubman Centers, Inc., Series H |
|
|
|
|
9,503,707 |
|
| |
|
|
|
|
|
Total Preferred Stock
(cost $130,123,714) |
|
|
|
|
130,297,614 |
|
| |
|
|
|
|
|
Total Investments – 98.3%
(cost $861,470,536) |
|
|
|
|
1,025,600,243 |
|
| |
|
|
|
|
|
Other Assets less Liabilities – 1.7% |
|
|
|
|
17,841,767 |
|
|
|
|
|
|
| |
|
|
|
|
|
Net Assets – 100.0% |
|
|
|
$ |
1,043,442,010 |
|
| * |
Includes U.S. Real Estate Investment Trusts (“REIT”) and Real Estate Operating Companies (“REOC”) as well as entities similarly formed under the laws of
non-U.S. Countries. |
| (a) |
Securities are exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions that are exempt from registration, normally
to qualified institutional buyers. At June 30, 2012, the securities amounted to $25,415,666 or 2.4% of net assets. |
| (b) |
Non-income producing security. |
| (c) |
All or a portion of these securities have been physically segregated in connection with written option contracts. |
| (d) |
Fair valued pursuant to guidelines approved by the board. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
Contracts |
|
|
|
Call Options Written
(b) |
|
Expiration
Date |
|
|
Exercise
Price |
|
|
|
|
Market
Value |
|
| 1,000 |
|
|
|
Simon Property Group, Inc. |
|
|
July 2012 |
|
|
$ |
155 |
|
|
|
|
$ |
295,000 |
|
| 2,000 |
|
|
|
Camden Property Trust |
|
|
August 2012 |
|
|
|
70 |
|
|
|
|
|
170,000 |
|
| 3,000 |
|
|
|
CBL & Associates Properties, Inc. |
|
|
August 2012 |
|
|
|
20 |
|
|
|
|
|
150,000 |
|
| 400 |
|
|
|
Ventas, Inc. |
|
|
August 2012 |
|
|
|
65 |
|
|
|
|
|
26,000 |
|
| |
|
|
|
Total Call Options Written
(Premiums received $253,939) |
|
|
|
|
|
|
|
|
|
|
|
$ |
641,000 |
|
See notes to financial statements.
|
|
|
| 8 |
|
CBRE CLARION GLOBAL REAL ESTATE INCOME
FUND |
Statement of Assets and Liabilities (unaudited)
|
|
|
|
|
|
|
| |
|
|
|
As of
June 30, 2012 |
|
|
|
|
| Assets |
|
|
|
|
|
|
| Investments, at value (cost $861,470,536) |
|
|
|
|
$1,025,600,243 |
|
| Cash and cash equivalents (including foreign currency of $211,386 with a cost of $211,381) |
|
|
|
|
12,208,153 |
|
| Dividends and interest receivable |
|
|
|
|
7,030,198 |
|
| Dividend withholding reclaims receivable |
|
|
|
|
140,779 |
|
| Other assets |
|
|
|
|
94,956 |
|
| Total Assets |
|
|
|
|
1,045,074,329 |
|
|
|
|
| Liabilities |
|
|
|
|
|
|
| Written options (premiums received $253,939) |
|
|
|
|
641,000 |
|
| Management fee payable |
|
|
|
|
659,004 |
|
| Accrued expenses |
|
|
|
|
332,315 |
|
| Total Liabilities |
|
|
|
|
1,632,319 |
|
|
|
|
| Net Assets |
|
|
|
|
$1,043,442,010 |
|
|
|
|
| Composition of Net Assets |
|
|
|
|
|
|
| $0.001 par value per share; unlimited number of shares authorized, 116,590,494 shares issued and outstanding |
|
|
|
|
$116,590 |
|
| Additional paid-in capital |
|
|
|
|
1,363,050,697 |
|
| Distributions in excess of net investment income |
|
|
|
|
(55,778,383 |
) |
| Accumulated net realized loss on investments, written options, swap contracts and foreign currency transactions |
|
|
|
|
(427,754,801 |
) |
| Net unrealized appreciation on investments, written options and foreign currency denominated assets
and liabilities |
|
|
|
|
163,807,907 |
|
|
|
|
| Net Assets |
|
|
|
|
$1,043,442,010 |
|
|
|
|
| Net Asset Value
(based on 116,590,494 shares outstanding) |
|
|
|
|
$8.95 |
|
See notes to financial statements.
|
|
|
| SEMI-ANNUAL REPORT 2012 |
|
9 |
Statement of Operations
(unaudited)
|
|
|
|
|
|
|
| |
|
|
|
For
the Six Months Ended
June 30, 2012 |
|
| Investment Income |
|
|
|
|
|
|
| Dividends (net of foreign withholding taxes of $1,501,490) |
|
|
|
|
$28,287,668 |
|
| Interest |
|
|
|
|
224 |
|
| Total Investment Income |
|
|
|
|
28,287,892 |
|
|
|
|
| Expenses |
|
|
|
|
|
|
| Management fees |
|
|
|
|
4,357,974 |
|
| Printing and mailing fees |
|
|
|
|
334,958 |
|
| Interest expense on line of credit |
|
|
|
|
90,470 |
|
| Insurance fees |
|
|
|
|
86,010 |
|
| Custodian fees |
|
|
|
|
78,696 |
|
| Trustees’ fees and expenses |
|
|
|
|
77,750 |
|
| Legal fees |
|
|
|
|
74,671 |
|
| Administration fees |
|
|
|
|
62,048 |
|
| NYSE listing fee |
|
|
|
|
52,783 |
|
| Audit and tax fees |
|
|
|
|
36,351 |
|
| Miscellaneous expenses |
|
|
|
|
17,394 |
|
| Total Expenses |
|
|
|
|
5,269,105 |
|
| Management fee waived |
|
|
|
|
(340,616 |
) |
| Net Expenses |
|
|
|
|
4,928,489 |
|
|
|
|
| Net Investment Income |
|
|
|
|
23,359,403 |
|
|
|
|
| Net Realized and Unrealized Gain (Loss) on Investments, Written Options and Foreign Currency Transactions |
|
|
|
|
|
|
| Net realized gain on: |
|
|
|
|
|
|
| Investments |
|
|
|
|
92,806 |
|
| Written options |
|
|
|
|
476,488 |
|
| Foreign currency transactions |
|
|
|
|
39,871 |
|
| Total Net Realized Gain |
|
|
|
|
609,165 |
|
| Net change in unrealized appreciation (depreciation) on: |
|
|
|
|
|
|
| Investments |
|
|
|
|
101,720,857 |
|
| Written options |
|
|
|
|
(387,061 |
) |
| Foreign currency denominated assets and liabilities |
|
|
|
|
42,902 |
|
| Total Net Change in Unrealized Appreciation (Depreciation) |
|
|
|
|
101,376,698 |
|
|
|
|
| Net Gain on Investments, Written Options and Foreign Currency Transactions |
|
|
|
|
101,985,863 |
|
|
|
|
| Net Increase in Net Assets |
|
|
|
|
$125,345,266 |
|
See notes to financial statements.
|
|
|
| 10 |
|
CBRE CLARION GLOBAL REAL ESTATE INCOME
FUND |
Statements of Changes in Net Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
For
the Six Months Ended
June 30, 2012
(unaudited) |
|
|
|
|
For
the Year Ended
December 31, 2011 |
|
| Change in Net Assets Resulting from Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net investment income |
|
|
|
|
$23,359,403 |
|
|
|
|
|
$39,879,687 |
|
|
|
|
|
|
| Net realized gain (loss) on investments, written options and foreign currency transactions |
|
|
|
|
609,165 |
|
|
|
|
|
(5,923,615 |
) |
|
|
|
|
|
| Net change in unrealized appreciation (depreciation) on investments, written options and foreign
currency denominated assets and liabilities |
|
|
|
|
101,376,698 |
|
|
|
|
|
(21,658,681 |
) |
|
|
|
|
|
| Net increase in net assets resulting from operations |
|
|
|
|
125,345,266 |
|
|
|
|
|
12,297,391 |
|
|
|
|
|
|
| Dividends and Distributions on Common Shares * |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Distribution of net investment income |
|
|
|
|
(31,479,433 |
) |
|
|
|
|
(38,608,248 |
) |
|
|
|
|
|
| Distribution of return of capital |
|
|
|
|
— |
|
|
|
|
|
(24,350,619 |
) |
|
|
|
|
|
| Total dividends and distributions on Common Shares |
|
|
|
|
(31,479,433 |
) |
|
|
|
|
(62,958,867 |
) |
|
|
|
|
|
| Net Increase (Decrease) in Net Assets |
|
|
|
|
93,865,833 |
|
|
|
|
|
(50,661,476 |
) |
|
|
|
|
|
| Net Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Beginning of period |
|
|
|
|
949,576,177 |
|
|
|
|
|
1,000,237,653 |
|
|
|
|
|
|
| End of period (net of distributions in excess of net investment income of $55,778,383 and
$47,658,353, respectively) |
|
|
|
|
$1,043,442,010 |
|
|
|
|
|
$949,576,177 |
|
| * |
The final determination of the source of the 2012 distributions for tax purposes will be made after the Trust’s fiscal year. |
See notes to financial statements.
|
|
|
| SEMI-ANNUAL REPORT 2012 |
|
11 |
Statement of Cash Flows
(unaudited)
|
|
|
|
|
|
|
| |
|
|
|
For
the Six Months Ended
June 30, 2012 |
|
|
|
|
| Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
|
| Net increase in net assets resulting from operations |
|
|
|
|
$125,345,266 |
|
|
|
|
| Adjustments to Reconcile Net Increase in Net Assets Resulting from Operations to Net Cash Provided by Operating
Activities: |
|
|
|
|
|
|
|
|
|
| Net change in unrealized appreciation/depreciation on investments |
|
|
|
|
(101,333,796 |
) |
|
|
|
| Net realized gain on investments |
|
|
|
|
(92,806 |
) |
|
|
|
| Cost of securities purchased |
|
|
|
|
(14,479,101 |
) |
|
|
|
| Proceeds from sale of securities |
|
|
|
|
75,714,321 |
|
|
|
|
| Premiums on written options |
|
|
|
|
253,939 |
|
|
|
|
| Decrease in receivable for investment securities sold |
|
|
|
|
3,875 |
|
|
|
|
| Decrease in dividends and interest receivable |
|
|
|
|
543,819 |
|
|
|
|
| Increase in dividend withholding reclaims receivable |
|
|
|
|
(140,779 |
) |
|
|
|
| Decrease in other assets |
|
|
|
|
29,881 |
|
|
|
|
| Increase in management fee payable |
|
|
|
|
35,616 |
|
|
|
|
| Decrease in accrued expenses |
|
|
|
|
(87,465 |
) |
|
|
|
| Net Cash Provided by Operating Activities |
|
|
|
|
85,792,770 |
|
|
|
|
| Cash Flows From Financing Activities: |
|
|
|
|
|
|
|
|
|
| Cash distributions paid on common shares |
|
|
|
|
(31,479,433 |
) |
|
|
|
| Decrease in line of credit payable |
|
|
|
|
(42,169,900 |
) |
|
|
|
| Net Cash Used in Financing Activities |
|
|
|
|
(73,649,333 |
) |
|
|
|
| Net increase in cash |
|
|
|
|
12,143,437 |
|
|
|
|
| Cash and Cash Equivalents at Beginning of Period |
|
|
|
|
64,716 |
|
|
|
|
| Cash and Cash Equivalents at End of Period |
|
|
|
|
$12,208,153 |
|
|
|
|
| Supplemental disclosure |
|
|
|
|
|
|
|
|
|
| Interest paid on line of credit |
|
|
|
|
$121,526 |
|
See notes to financial statements.
|
|
|
| 12 |
|
CBRE CLARION GLOBAL REAL ESTATE INCOME
FUND |
Financial Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share operating performance for a
share outstanding throughout the period |
|
|
|
For the Six
Months Ended
June 30, 2012
(unaudited) |
|
|
|
|
For the
Year Ended
December 31,
2011 |
|
|
|
|
For the
Year Ended
December 31,
2010 |
|
|
|
|
For the
Year Ended
December 31,
2009 |
|
|
|
|
For the
Year Ended
December 31,
2008 |
|
|
|
|
For the
Year Ended
December 31,
2007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net asset value, beginning of period |
|
|
|
|
$8.14 |
|
|
|
|
|
$8.58 |
|
|
|
|
|
$7.51 |
|
|
|
|
|
$5.63 |
|
|
|
|
|
$16.16 |
|
|
|
|
|
$22.78 |
|
| Income from investment operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net investment income (1) |
|
|
|
|
0.20 |
|
|
|
|
|
0.34 |
|
|
|
|
|
0.36 |
|
|
|
|
|
0.39 |
|
|
|
|
|
1.11 |
|
|
|
|
|
1.17 |
|
| Net realized and unrealized gain (loss) on investments, written options, swap contracts and foreign currency transactions |
|
|
|
|
0.88 |
|
|
|
|
|
(0.24 |
) |
|
|
|
|
1.25 |
|
|
|
|
|
2.03 |
|
|
|
|
|
(10.15 |
) |
|
|
|
|
(4.07 |
) |
| Dividends and distributions on Preferred Shares from net investment income (common stock equivalent
basis) |
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
(0.25 |
) |
|
|
|
|
(0.48 |
) |
| Total from investment operations |
|
|
|
|
1.08 |
|
|
|
|
|
0.10 |
|
|
|
|
|
1.61 |
|
|
|
|
|
2.42 |
|
|
|
|
|
(9.29 |
) |
|
|
|
|
(3.38 |
) |
| Dividends and distributions on Common Shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net investment income |
|
|
|
|
(0.27 |
) |
|
|
|
|
(0.33 |
) |
|
|
|
|
(0.54 |
) |
|
|
|
|
(0.54 |
) |
|
|
|
|
— |
|
|
|
|
|
(1.97 |
) |
| Capital gains |
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
(0.68 |
) |
|
|
|
|
(1.25 |
) |
| Return of capital |
|
|
|
|
— |
|
|
|
|
|
(0.21 |
) |
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
(0.56 |
) |
|
|
|
|
— |
|
| Total dividends and distributions to Common Shareholders |
|
|
|
|
(0.27 |
) |
|
|
|
|
(0.54 |
) |
|
|
|
|
(0.54 |
) |
|
|
|
|
(0.54 |
) |
|
|
|
|
(1.24 |
) |
|
|
|
|
(3.22 |
) |
| Offering expenses in connection with the issuance of Preferred Shares |
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
— |
|
|
|
|
|
(0.02 |
) |
| Net asset value, end of period |
|
|
|
|
$8.95 |
|
|
|
|
|
$8.14 |
|
|
|
|
|
$8.58 |
|
|
|
|
|
$7.51 |
|
|
|
|
|
$5.63 |
|
|
|
|
|
$16.16 |
|
| Market value, end of period |
|
|
|
|
$7.92 |
|
|
|
|
|
$6.84 |
|
|
|
|
|
$7.75 |
|
|
|
|
|
$6.37 |
|
|
|
|
|
$3.98 |
|
|
|
|
|
$13.83 |
|
| Total investment return (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net asset value |
|
|
|
|
13.38 |
% |
|
|
|
|
0.94 |
% |
|
|
|
|
22.41 |
% |
|
|
|
|
46.79 |
% |
|
|
|
|
(61.14 |
)% |
|
|
|
|
(15.82 |
)% |
| Market value |
|
|
|
|
19.78 |
% |
|
|
|
|
(5.38 |
)% |
|
|
|
|
31.06 |
% |
|
|
|
|
79.09 |
% |
|
|
|
|
(67.38 |
)% |
|
|
|
|
(32.34 |
)% |
| Ratios and supplemental data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net assets, applicable to Common Shares, end of period (thousands) |
|
|
|
|
$1,043,442 |
|
|
|
|
|
$949,576 |
|
|
|
|
|
$1,000,238 |
|
|
|
|
|
$875,448 |
|
|
|
|
|
$586,525 |
|
|
|
|
|
$1,659,240 |
|
| Ratios to average net assets applicable to Common Shares of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net expenses, after fee waiver + |
|
|
|
|
0.98 |
% (3) |
|
|
|
|
1.03 |
% |
|
|
|
|
0.94 |
% |
|
|
|
|
1.14 |
% |
|
|
|
|
1.28 |
% |
|
|
|
|
1.38 |
% |
| Net expenses, before fee waiver + |
|
|
|
|
1.05 |
% (3) |
|
|
|
|
1.14 |
% |
|
|
|
|
1.11 |
% |
|
|
|
|
1.38 |
% |
|
|
|
|
1.67 |
% |
|
|
|
|
1.74 |
% |
| Net expenses, after the fee waiver excluding interest on line of
credit + |
|
|
|
|
0.96 |
% (3) |
|
|
|
|
0.97 |
% |
|
|
|
|
0.90 |
% |
|
|
|
|
1.12 |
% |
|
|
|
|
1.28 |
% |
|
|
|
|
1.08 |
% |
| Net expenses, before fee waiver excluding interest on line of credit
+ |
|
|
|
|
1.03 |
% (3) |
|
|
|
|
1.09 |
% |
|
|
|
|
1.07 |
% |
|
|
|
|
1.35 |
% |
|
|
|
|
1.67 |
% |
|
|
|
|
1.44 |
% |
| Net investment income, after preferred share dividends |
|
|
|
|
4.65 |
% (3) |
|
|
|
|
3.98 |
% |
|
|
|
|
4.60 |
% |
|
|
|
|
6.75 |
% |
|
|
|
|
7.10 |
% |
|
|
|
|
3.17 |
% |
| Preferred share dividends |
|
|
|
|
N/A |
|
|
|
|
|
N/A |
|
|
|
|
|
N/A |
|
|
|
|
|
0.04 |
% |
|
|
|
|
2.08 |
% |
|
|
|
|
2.20 |
% |
| Net investment income, before preferred share dividends
+ |
|
|
|
|
4.65 |
% (3) |
|
|
|
|
3.98 |
% |
|
|
|
|
4.60 |
% |
|
|
|
|
6.79 |
% |
|
|
|
|
9.18 |
% |
|
|
|
|
5.37 |
% |
| Portfolio turnover rate |
|
|
|
|
1.41 |
% |
|
|
|
|
1.53 |
% |
|
|
|
|
12.91 |
% |
|
|
|
|
28.04 |
% |
|
|
|
|
7.32 |
% |
|
|
|
|
6.10 |
% |
| Leverage analysis: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Preferred shares, at redemption value, ($25,000 per share liquidation preference) (thousands) |
|
|
|
|
N/A |
|
|
|
|
|
N/A |
|
|
|
|
|
N/A |
|
|
|
|
|
N/A |
|
|
|
|
|
$370,000 |
|
|
|
|
|
$910,000 |
|
| Net asset coverage per share of preferred shares |
|
|
|
|
N/A |
|
|
|
|
|
N/A |
|
|
|
|
|
N/A |
|
|
|
|
|
N/A |
|
|
|
|
|
$64,630 |
|
|
|
|
|
$70,584 |
|
| (1) |
Based on average shares outstanding. |
| (2) |
Total investment return does not reflect brokerage commissions. A return calculated for a period of less than one year is not annualized. Dividends and distributions are assumed
to be reinvested at the prices obtained under the Trust’s Dividend Reinvestment Plan. Net Asset Value (“NAV”) total return is calculated assuming reinvestment of distributions at NAV on the date of the distribution.
|
| + |
Does not reflect the effects of dividends to Preferred Shareholders. |
See notes to financial statements.
|
|
|
| SEMI-ANNUAL REPORT 2012 |
|
13 |
Notes to Financial Statements
(unaudited)
CBRE Clarion Global Real Estate Income Fund (the “Trust”) is a diversified, closed-end management investment company that was organized as a Delaware
statutory trust on November 6, 2003 under the Investment Company Act of 1940, as amended. Effective July 5, 2011, the Trust has been renamed CBRE Clarion Global Real Estate Income Fund. CBRE Clarion Securities LLC (the “Advisor”)
is the Trust’s investment advisor. The Trust commenced operations on February 18, 2004.
On February 15, 2011, ING Group and CB Richard
Ellis, Inc. (“CBRE”) entered into agreements pursuant to which the majority of ING’s real estate investment management business, including the Advisor, would be acquired by CBRE, a US based global provider of real estate services (the
“Transaction”). The Transaction was completed on July 1, 2011. Certain members of the Advisor’s senior management team acquired a minority equity interest in the Advisor as part of the Transaction. The Advisor, now a
majority-owned subsidiary of CBRE, is partially owned by its senior management team.
| 2. |
Significant Accounting Policies |
The following accounting policies are in accordance with U.S. general accepted accounting principles (“GAAP”) and are consistently followed by the Trust.
Securities Valuation – The net asset value of the common shares of the Trust will be computed based upon the value of the Trust’s
portfolio securities and other assets. The Trust calculates net asset value per common share by subtracting the Trust’s liabilities (including accrued expenses, dividends payable and any borrowings of the Trust) and the liquidation value of any
outstanding preferred shares from the Trust’s total assets (the value of the securities the Trust holds, plus cash and/or other assets, including interest accrued but not yet received) and dividing the result by the total number of common
shares of the Trust outstanding. Net asset value per common share will be determined as of the close of the regular trading session (usually 4:00 p.m., EST) on the New York Stock Exchange (“NYSE”) on each business day on which the
NYSE is open for trading.
For purposes of determining the net asset value of the Trust, readily marketable portfolio assets traded principally on an
exchange, or on a similar regulated market reporting contemporaneous transaction prices, are valued, except as indicated below, at the last sale price for such assets on such principal markets on the business day on which such value is being
determined. If there has been no sale on such day, the
securities are valued at the mean of the closing bid and asked prices on such day. Foreign securities are valued based upon quotations from the primary market in which they are traded and are
translated from the local currency into U.S. dollars using current exchange rates. Securities and other assets for which market quotations are not readily available or for which the above valuation procedures are deemed not to reflect fair
value are valued in a manner that is intended to reflect their fair value as determined in accordance with procedures approved by the Trust’s Board of Trustees (the “Board”).
Short-term securities which mature in more than 60 days are valued at current market quotations. Short-term securities, which mature in 60 days or less are valued at, amortized cost, which approximates
market value.
GAAP provides guidance on fair value measurements. In accordance with the standard, fair value is defined as the price that the Trust
would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. It
establishes a single definition of fair value, creates a three-tier hierarchy as a framework for measuring fair value based on inputs used to value the Trust’s investments, and requires additional disclosure about fair value. The hierarchy of
inputs is summarized below:
| • |
|
Level 1 — unadjusted quoted prices in active markets for identical investments |
| • |
|
Level 2 — other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk,
etc.) |
| • |
|
Level 3 — significant unobservable inputs (including the Trust’s own assumptions in determining the fair value of investments)
|
For Level 1 inputs, the Trust uses unadjusted quoted prices in active markets for assets or liabilities with sufficient frequency and
volume to provide pricing information as the most reliable evidence of fair value.
The Trust’s Level 2 valuation techniques include inputs other
than quoted prices within Level 1 that are observable for an asset or liability, either directly or indirectly. Level 2 observable inputs may include quoted prices for similar assets and liabilities in active markets or quoted prices for identical
or similar assets or liabilities in markets that are not active in which there are few transactions, the prices are not current, or price quotations vary substantially over time or among market
|
|
|
| 14 |
|
CBRE CLARION GLOBAL REAL ESTATE INCOME
FUND |
Notes to Financial Statements continued
participants. Inputs that are observable for the asset or liability in Level 2 include such factors as interest rates, yield curves, prepayment speeds, credit risk, and default rates for similar
liabilities.
For Level 3 valuation techniques, the Trust uses unobservable inputs that reflect assumptions market participants would be expected to use
in pricing the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available and are developed based on the best information available under the circumstances. In developing
unobservable inputs, market participant assumptions are used if they are reasonably available without undue cost and effort.
The inputs or methodology
used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used as of June 30, 2012 in valuing the Trust’s investments carried at fair
value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
| Investments in Real Estate Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Australia |
|
$ |
137,903,255 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
137,903,255 |
|
|
|
|
|
|
| Canada |
|
|
118,262,583 |
|
|
|
— |
|
|
|
— |
|
|
|
118,262,583 |
|
|
|
|
|
|
| France |
|
|
35,155,233 |
|
|
|
— |
|
|
|
— |
|
|
|
35,155,233 |
|
|
|
|
|
|
| Germany |
|
|
5,723,420 |
|
|
|
— |
|
|
|
— |
|
|
|
5,723,420 |
|
|
|
|
|
|
| Hong Kong |
|
|
36,367,398 |
|
|
|
— |
|
|
|
— |
|
|
|
36,367,398 |
|
|
|
|
|
|
| Japan |
|
|
26,687,781 |
|
|
|
— |
|
|
|
— |
|
|
|
26,687,781 |
|
|
|
|
|
|
| Netherlands |
|
|
28,375,727 |
|
|
|
— |
|
|
|
— |
|
|
|
28,375,727 |
|
|
|
|
|
|
| New Zealand |
|
|
7,237,567 |
|
|
|
— |
|
|
|
— |
|
|
|
7,237,567 |
|
|
|
|
|
|
| Singapore |
|
|
52,907,029 |
|
|
|
— |
|
|
|
— |
|
|
|
52,907,029 |
|
|
|
|
|
|
| United Kingdom |
|
|
36,249,638 |
|
|
|
— |
|
|
|
— |
|
|
|
36,249,638 |
|
|
|
|
|
|
| United States |
|
|
401,887,558 |
|
|
|
— |
|
|
|
8,545,440 |
|
|
|
410,432,998 |
|
|
|
|
|
|
| Total Common Stocks |
|
|
886,757,189 |
|
|
|
— |
|
|
|
8,545,440 |
|
|
|
895,302,629 |
|
| Preferred Stocks |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| United States |
|
|
111,409,308 |
|
|
|
18,888,306 |
|
|
|
— |
|
|
|
130,297,614 |
|
|
|
|
|
|
| Total Investments in Real Estate Securities |
|
|
998,166,497 |
|
|
|
18,888,306 |
|
|
|
8,545,440 |
|
|
|
1,025,600,243 |
|
|
|
|
|
|
| Call Options Written |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| United States |
|
|
(641,000 |
) |
|
|
— |
|
|
|
— |
|
|
|
(641,000 |
) |
The primary third party pricing vendor for the Trust’s listed preferred stock investments is FT Interactive Data
(“IDC”). When available, the Trust will obtain a closing exchange price to value the preferred stock investments and, in such instances, the investment will be classified as Level 1 since an unadjusted quoted price was utilized. When a
closing price is not available for the listed preferred stock investments, IDC will
produce an evaluated mean price (midpoint between the bid and the ask evaluation) and such investments will be classified as Level 2 since other observable inputs were used in the valuation.
Factors used in the IDC evaluation include trading activity, the presence of a two-sided market, and other relevant market data.
The Trust’s
policy is to recognize transfers in and transfers out at the fair value as of the beginning of the period. The portfolio may hold securities which are periodically fair valued in accordance with the Trust’s fair value procedures. This may
result in movements between Levels 1, 2 and 3 throughout the period. The fair value of Level 2 and Level 1 investments at December 31, 2011 was $5,065,001 and $969,274,999, respectively. $17,946,380 was transferred out of Level 1 into Level 2
during the period ended June 30, 2012 as a result of obtaining quoted exchange closing prices from the Trust’s third party pricing vendor. With regard to the transfers from Level 1 into Level 2, quotations were still obtained from the
Trust’s third party pricing vendor. Pursuant to the Trust’s fair value procedures noted previously, equity securities (including exchange traded securities and open-end regulated investment companies) exchange traded derivatives (i.e.
futures contracts and options) are generally categorized as Level 1 securities in the fair value hierarchy. Fixed income securities, non-exchange traded derivatives and money market instruments are generally categorized as Level 2 securities in the
fair value hierarchy. Investments for which there are no such quotations, or for which quotations do not appear reliable, are valued at fair value as determined in accordance with procedures established by and under the general supervision of the
Trustees. These valuations are typically categorized as Level 2 or Level 3 securities in the fair value hierarchy.
The Trust has one investment in a
private equity security which is classified as Level 3 because no market quotations are readily available. In determining the fair value of this investment, the following factors may be evaluated: balance sheet, income statement, the portfolio of
real estate investments held, economic factors and conditions in which the company operates, and comparable public company valuations and trading prices.
|
|
|
| SEMI-ANNUAL REPORT 2012 |
|
15 |
Notes to Financial Statements continued
The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in
determining fair value:
|
|
|
|
|
| |
|
Common Stocks |
|
| Balance as of December 31, 2011 |
|
$ |
10,681,800 |
|
|
|
| Realized gain (loss) |
|
|
— |
|
|
|
| Change in unrealized appreciation (depreciation) |
|
|
(2,136,360 |
) |
|
|
| Net purchases (sales) |
|
|
— |
|
|
|
| Transfers in and/or out of Level 3 |
|
|
— |
|
| Balance as of June 30, 2012 |
|
$ |
8,545,440 |
|
For the six months ended June 30, 2012, there have been no significant changes to the Trust’s fair valuation methodology.
Derivatives and Hedging Disclosure — Codification Topic 815 (“ASC 815”), Derivatives and Hedging, requires qualitative
disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative
agreements. The Trust has invested in derivatives, specifically written options for the six months ended June 30, 2012 which are detailed in the table herein. The Trust’s derivative agreements contain credit-risk related contingent
features which include, but are not limited to, a percentage decline in the Trust’s NAV or net assets over a specified time period. If an event occurred that triggered a contingent feature, the counterparty to the agreement may require the
Trust to post additional collateral or terminate the derivative positions and demand payment. Any collateral posted with respect to the derivative positions would be used to offset or reduce the payment. The maximum exposure to derivatives
agreements with credit-risk related contingent features would be the total value of derivatives in net liability positions for the Trust.
The Trust has
invested in derivatives, specifically written options for the six months ended June 30, 2012, which are detailed in the table herein. The derivative instruments disclosed and described herein are subject to credit risk. Credit risk is where the
financial condition of an issuer of a security or instrument may cause it to default or become unable to pay interest or principal due on the security. The counterparty to a derivative contract might default on its obligations. The effect of such
derivative instruments on the Trust’s financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations are presented in the summary below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Derivatives not
designated
as hedging instruments,
carried at fair value |
|
Asset Derivatives |
|
|
|
|
Liability Derivatives |
|
| |
Balance
Sheet Location |
|
Fair Value |
|
|
|
|
Balance
Sheet Location |
|
Fair Value |
|
|
|
|
|
|
|
| Equity contracts |
|
|
|
$ |
— |
|
|
|
|
Written options |
|
$ |
641,000 |
|
Gain or (loss) associated with derivatives outstanding throughout the six months ended June 30, 2012 is as follows:
|
|
|
|
|
| Amount of Realized Gain on Derivatives Recognized in Income |
|
| Derivatives not designated as hedging instruments, carried at fair value |
|
Written Options |
|
|
|
| Equity contracts |
|
$ |
476,488 |
|
|
|
|
|
|
| Change in Unrealized Appreciation on Derivatives Recognized in Income |
|
| Derivatives not designated as hedging instruments, carried at fair value |
|
Written Options |
|
|
|
| Equity contracts |
|
$ |
(387,061 |
) |
For the six months ended June 30, 2012, the Trust’s average premiums received for written options was $84,646.
Foreign Currency Translation – The books and records of the Trust are maintained in U.S. dollars. Foreign currency amounts are translated into
U.S. dollars on the following basis:
| (i) |
market value of investment securities, other assets and liabilities – at the current rates of exchange; |
| (ii) |
purchases and sales of investment securities, income and expenses – at the rate of exchange prevailing on the respective dates of such transactions.
|
Although the net assets of the Trust are presented at the foreign exchange rates and market values at the close of each fiscal period, the
Trust does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of long-term securities held at the end of the period.
Similarly, the Trust does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of portfolio securities sold during the period. Accordingly, realized foreign currency gains or
losses will be included in the reported net realized gains or losses on investment transactions.
Net realized gains or losses on foreign currency
transactions represent net foreign exchange gains or losses from the holding of foreign currencies, currency gains or losses realized between the trade date and settlement date on securities transactions, and the difference between the amounts of
dividends, interest and foreign withholding taxes recorded on the Trust’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains or losses from valuing foreign currency denominated assets or
liabilities (other than investments) at period end exchange rates are reflected as a component of net unrealized appreciation or depreciation on investments and foreign currencies.
|
|
|
| 16 |
|
CBRE CLARION GLOBAL REAL ESTATE INCOME
FUND |
Notes to Financial Statements continued
Foreign security and currency transactions may involve certain considerations and risks not typically associated with
those of domestic origin as a result of, among other factors, the possibility of political or economic instability, or the level of governmental supervision and regulation of foreign securities markets.
Forward Exchange Currency Contracts – The Trust may enter into forward exchange currency contracts in order to hedge its exposure to changes in
foreign currency exchange rates on its foreign portfolio holdings, to hedge certain Trust purchase and sales commitments denominated in foreign currencies and for investment purposes. A forward exchange currency contract is a commitment to purchase
or sell a foreign currency on a future date at a negotiated forward rate. The gain or loss arising from the difference between the original contracts and the closing of such contracts would be included in net realized gain or loss on foreign
currency transactions.
Fluctuations in the value of open forward exchange currency contracts are recorded for financial reporting purposes as unrealized
appreciation and depreciation by the Trust.
The Trust’s custodian will place and maintain cash not available for investment or other liquid assets
in a separate account of the Trust having a value at least equal to the aggregate amount of the Trust’s commitments under forward exchange currency contracts entered into with respect to position hedges.
Risks may arise from the potential inability of a counterparty to meet the terms of a contract and from unanticipated movements in the value of a foreign currency
relative to the U.S. dollar. The face or contract amount, in U.S. dollars, reflects the total exposure the Trust has in that particular currency contract. As of June 30, 2012, the Trust did not hold any forward exchange currency
contracts.
Options – The Fund may purchase or sell (write) options on securities and securities indices which are listed on a national
securities exchange or in the over-the-counter (“OTC”) market as a means of achieving additional return or of hedging the value of the Trust’s portfolio.
An option on a security is a contract that gives the holder of the option, in return for a premium, the right to buy from (in the case of a call) or sell to (in the case of a put) the writer of the option the
security underlying the option at a specified exercise or “strike” price. The writer of an option on a security has an obligation upon exercise of the option to deliver the underlying security upon payment of the exercise price (in the
case of a call) or to pay the exercise price upon delivery of the underlying security (in the case of a put).
There are several risks associated with transactions in options on securities. As the writer of a covered call
option, the Trust forgoes, during the option’s life, the opportunity to profit from increases in the market value of the security covering the call option above the sum of the premium and the strike price of the call but has retained the risk
of loss should the price of the underlying security decline. The writer of an option has no control over the time when it may be required to fill its obligation as writer of the option. Once an option writer has received an exercise notice, it
cannot effect a closing purchase transaction in order to terminate its obligation under the option and must deliver the underlying security at the exercise price.
Transactions in written options during the six months ended June 30, 2012 were as follows:
|
|
|
|
|
|
|
|
|
| |
|
Number
of Contracts |
|
|
Premiums
Received |
|
| Options outstanding, beginning of period |
|
|
— |
|
|
$ |
— |
|
| Options closed during the period |
|
|
(19 |
) |
|
|
(1,425 |
) |
| Options exercised during the period |
|
|
(152 |
) |
|
|
(3,263 |
) |
| Options expired during the period |
|
|
(12,748 |
) |
|
|
(475,481 |
) |
|
|
|
| Options written during the period |
|
|
19,319 |
|
|
|
734,108 |
|
| Options outstanding, end of period |
|
|
6,400 |
|
|
$ |
253,939 |
|
Securities Transactions and Investment Income – Securities transactions are recorded on a trade date basis.
Realized gains and losses from securities transactions are recorded on the basis of identified cost. Dividend income is recorded on the ex-dividend date. Distributions received from investments in REITs are recorded as dividend income on ex-dividend
date, subject to reclassification upon notice of the character of such distributions by the issuer. The portion of dividend attributable to the return of capital is recorded against the cost basis of the security. Withholding taxes on foreign
dividends are recorded net of reclaimable amounts, at the time the related income is earned. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, including
accretion of original issue discount, where applicable, and accretion of discount on short-term investments, is recorded on the accrual basis. Realized gains and losses from securities transactions are recorded on the basis of identified cost.
Dividends and Distributions to Shareholders – Dividends from net investment income, if any, are declared and paid on a monthly basis.
Income dividends and capital gain distributions to common shareholders are recorded on the ex-dividend date. To the extent the Trust’s net realized capital gains, if any, can be offset by capital loss carryforwards, it is the policy of the
Trust not to distribute such gains.
|
|
|
| SEMI-ANNUAL REPORT 2012 |
|
17 |
Notes to Financial Statements continued
On August 5, 2008, the Trust acting in accordance with an exemptive order received from the Securities and
Exchange Commission and with approval of the Board, adopted a managed distribution policy under which the Trust intends to make regular monthly cash distributions to common shareholders, stated in terms of a fixed amount per common share. With this
new policy the Trust can now include long-term capital gains in its distribution as frequently as twelve times a year. In practice, the Board views their approval of this policy as a potential means of further supporting the market price of the
Trust through the payment of a steady and predictable level of cash distributions to shareholders.
The current monthly distribution rate is $0.045 per
share. The Trust continues to evaluate its monthly distribution policy in light of ongoing economic and market conditions and may change the amount of the monthly distributions in the future.
Use of Estimates – The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Under normal market conditions, the Trust’s investments will be concentrated in income-producing common equity securities, preferred securities, convertible securities and non-convertible debt securities
issued by companies deriving the majority of their revenue from the ownership, construction, financing, management and/or sale of commercial, industrial, and/or residential real estate. Values of the securities of such companies may fluctuate due to
economic, legal, cultural, geopolitical or technological developments affecting various global real estate industries.
| 4. |
Investment Management Agreement and Other Agreements |
Pursuant to an investment management agreement between the Advisor and the Trust, the Advisor is responsible for the daily management of the Trust’s portfolio
of investments, which includes buying and selling securities for the Trust, as well as investment research. The Trust pays for investment advisory services and facilities through a fee payable monthly in arrears at an annual rate equal to 0.85% of
the average daily value of the Trust’s managed assets plus certain direct and allocated expenses of the Advisor incurred on the Trust’s behalf. The Advisor has agreed to waive a portion of its management fee in the amount of 0.25% of the
average daily values of the Trust’s managed assets for the first five years of the Trust’s
operations (through February, 2009), and for a declining amount for an additional four years (through February, 2013). During the six months ended June 30, 2012, the Trust incurred
management fees of $4,017,358 which are net of $340,616 in management fees waived by the Advisor.
The Trust has multiple service agreements with The
Bank of New York Mellon (“BNYM”). Under the servicing agreements, BNYM will perform custodial, fund accounting, certain administrative services, and transfer agency services for the Trust. As custodian, BNYM is responsible for the custody
of the Trust’s assets. As administrator, BNYM is responsible for maintaining the books and records of the Trust’s securities and cash. As transfer agent, BNYM is responsible for performing transfer agency services for the Trust.
For the six months ended June 30, 2012, there were purchases and sales transactions (excluding short-term securities) of $14,482,365 and $75,714,321, respectively.
The Trust intends to elect to be, and qualify for treatment as, a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). A regulated investment
company generally pays no federal income tax on the income and gains that it distributes. The Trust intends to meet the calendar year distribution requirements imposed by the Code to avoid the imposition of a 4% excise tax.
The Trust is required to evaluate tax positions taken or expected to be taken in the course of preparing the Trust’s tax returns to determine whether the tax
positions are “more-likely-than-not” of being sustained by the applicable tax authority. Income tax and related interest and penalties would be recognized by the Trust as tax expense in the Statement of Operations if the tax positions were
deemed to not meet the more-likely-than-not threshold. For the six months ended June 30, 2012, the Trust did not incur any income tax, interest, or penalties. As of June 30, 2012, the Advisor has reviewed all open tax years and concluded
that there was no impact to the Trust’s net assets or results of operations. Tax years ended December 31, 2009, through December 31, 2011, remain subject to examination by the Internal Revenue Service and state taxing authorities. On
an ongoing basis, the Advisor will monitor its tax positions to determine if adjustments to this conclusion are necessary.
The Trust distinguishes
between dividends on a tax basis and on a financial reporting basis and only distributions in excess of tax basis earnings and profits are reported in the financial statements as a tax return of capital. Differences in the
|
|
|
| 18 |
|
CBRE CLARION GLOBAL REAL ESTATE INCOME
FUND |
Notes to Financial Statements continued
recognition or classification of income between the financial statements and tax earnings and profits which result in temporary over-distributions for financial statement purposes are classified
as distributions in excess of net investment income or accumulated net realized losses in the components of net assets on the Statement of Assets and Liabilities.
In order to present paid-in capital in excess of par and accumulated net realized gains or losses on the Statement of Assets and Liabilities that more closely represent their tax character, certain adjustments have
been made to additional paid-in capital, undistributed net investment income and accumulated net realized gains or losses on investments. For the year ended December 31, 2011, the adjustments were to decrease additional paid-in capital by
$26,414,410 increase accumulated net realized loss on investments by $2,873,953 and increase distributions in excess of net investment income by $23,540,457 due to the difference in the treatment for book and tax purposes of certain investments.
Results of operations and net assets were not affected by these reclassifications.
At December 31, 2011, the Trust had capital loss carryforwards
which will reduce the Trust’s taxable income arising from future net realized gain on investments, if any, to the extent permitted by the code and thus will reduce the amount of distributions to shareholders which would otherwise be necessary
to relieve the Trust of any liability for federal income tax. Pursuant to the code, such capital loss carryforwards, if unused, will expire, $28,739,702, $370,635,903 and $26,711,743 in 2016, 2017 and 2018, respectively.
The Regulated Investment Company Modernization Act of 2010 (the “Act”) eliminated the eight-year carryover period for capital losses that arise in taxable
years beginning after its enactment date of December 22, 2010. Consequently, these capital losses can be carried forward for an unlimited period. However, capital losses with an expiration period may not be used to offset capital gains until
all net capital losses without an expiration date have been utilized. Additionally, post-enactment capital loss carryovers will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under
prior law. $2,333,921 is characterized as long-term capital losses and has no expiration.
The final determination of the source of the 2012
distributions for tax purposes will be made after the end of the Trust’s fiscal year and will be reported to shareholders in February 2013 on Form 1099-DIV.
For the year ended December 31, 2011, the tax character of distributions paid, as reflected in the Statements of Changes in Net Assets, was $38,608,248 of ordinary income and $24,350,619 of return of capital,
respectively.
Information on the components of net assets as of June 30, 2012 is as follows:
|
|
|
|
|
|
|
Cost of
Investments |
|
Gross
Unrealized
Appreciation |
|
Gross
Unrealized
Depreciation |
|
Net
Unrealized
Appreciation
on Investments |
| $861,470,536 |
|
$254,734,529 |
|
($90,604,822) |
|
$164,129,707 |
The Trust has access to a secured line of credit up to $300,000,000 from BNYM for borrowing purposes. Borrowings under this arrangement bear interest at the Federal funds rate plus 75 basis points. At
June 30, 2012, there were no borrowings on the Trust’s line of credit.
The average daily amount of borrowings during the six months ended
June 30, 2012 was $26,891,829 with a related weighted average interest rate of 0.87%. The maximum amount outstanding for the six months ended June 30, 2012, was $42,169,900.
During 2004, the Trust issued 101,000,000 shares of common stock at $15.00. In connection with the Trust’s DRIP plan, the Trust issued no common shares in for the six months ended June 30, 2012 and
year ended 2011, respectively. At June 30, 2012, the Trust had outstanding common shares of 116,590,494 with a par value of $0.001 per share. The Advisor owned 12,741 shares of the common shares outstanding.
At June 30, 2012, the Trust had no shares of auction rate preferred securities outstanding.
The Trust enters into contracts that contain a variety of indemnifications. The Trust’s exposure under these arrangements is unknown. However, the Trust has not had prior claims or losses or current claims or
losses pursuant to these contracts.
| 10. |
New Accounting Pronouncements |
In December 2011, the FASB issued ASU No. 2011-11 regarding “Disclosures about Offsetting Assets and Liabilities”. The amendments, which will be effective for annual reporting periods beginning on or
after January 1, 2013 and interim periods within those annual periods, require an entity to disclose information about offsetting and related arrangements for assets and liabilities, financial instruments and derivatives that are either
currently offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements. At this time, management is evaluating the implications of ASU No. 2011-11 and its impact on the financial
statements has not yet been determined.
|
|
|
| SEMI-ANNUAL REPORT 2012 |
|
19 |
Notes to Financial Statements concluded
Events or transactions that occur after the balance sheet date but before the financial statements are issued are categorized as recognized or non-recognized for financial statement purposes. The Advisor has
evaluated subsequent events and has determined there were no events that required recognition or disclosure in the Trust’s financial statements, other than as noted below.
As discussed in Note 2, the Trust has one investment in a private equity security, Verde Realty, which is fair valued with a market value of $8,545,440 or $12.00 per share at June 30, 2012. On July 26,
2012, Verde Realty and Brookfield Asset Management issued a joint press release. The press release stated that there was a proposed merger between Verde Realty and a fund sponsored by Brookfield Asset Management Inc.’s Brookfield Property
Group. The transaction will provide Verde shareholders with a price of up to $12.85 per common share. The transaction is subject to shareholder approval and other customary closing conditions and is expected to be completed in the fourth quarter of
2012.
|
|
|
| 20 |
|
CBRE CLARION GLOBAL REAL ESTATE INCOME
FUND |
Supplemental Information (unaudited)
Trustees
The Trustees of the CBRE Clarion Global Real Estate Income Fund and their principal occupations during the past five years:
|
|
|
|
|
|
|
|
|
|
|
| Name, Address and Age |
|
Term of Office and
Length of Time
Served
(1) |
|
Title |
|
Principal Occupations
During The Past
Five Years |
|
Number of
Portfolios in
the Fund
Complex
Overseen
by Trustee |
|
Other
Directorships
Held by Trustee |
| Interested Trustees: |
|
|
|
|
|
|
|
|
|
|
| T. Ritson Ferguson* 201 King of Prussia
Road, Suite 600 Radnor, PA 19087 Age: 53 |
|
3 years/
since inception |
|
Trustee, President and Chief Executive Officer |
|
Chief Executive Officer and
Co-Chief Investment Officer of
CBRE Clarion Securities LLC |
|
1 |
|
|
| Asuka Nakahara** 201 King of Prussia
Road, Suite 600 Radnor, PA 19087 Age: 56 |
|
3 years/
since inception |
|
Trustee |
|
Associate Director of the Zell-Lurie Real Estate Center at the Wharton School, University of Pennsylvania (since 1999); Lecturer of Real Estate at the
Wharton School, University of Pennsylvania (since 1999); Partner of Triton Atlantic Partners (since 2009). |
|
1 |
|
|
| Frederick S. Hammer 201 King of Prussia
Road, Suite 600 Radnor, PA 19087 Age: 76 |
|
3 years/
since inception |
|
Trustee |
|
Co-Chairman of Inter-Atlantic Group (since 1994) and a member of its investment committee. |
|
1 |
|
Serves on the Boards of Universal Business Payment Solutions Corp. (since 2011); Inter-Atlantic Financial,
Inc. (since 2007); E-Duction, Inc. (2005 - 2008), Avalon Insurance Holdings, Inc. (2006 - 2009) and Homeowners Insurance Corp. (since 2006); Director of US Fiduciary Corp. (2006 - 2009); Chairman of the Board of Annuity and Life Re (Holdings),
Ltd. (1998 - 2005). |
| Richard L. Sutton 201 King of Prussia
Road, Suite 600 Radnor, PA 19087 Age: 77 |
|
3 years/
since inception |
|
Trustee |
|
Partner, Morris, Nichols, Arsht & Tunnel (1966 - 2000). |
|
1 |
|
Board of Directors of Investors in Global Real Estate Ltd. (since 2006). |
|
|
|
| SEMI-ANNUAL REPORT 2012 |
|
21 |
Supplemental Information continued
|
|
|
|
|
|
|
|
|
|
|
| Name, Address and Age |
|
Term of Office and
Length of Time
Served
(1) |
|
Title |
|
Principal Occupations
During The Past
Five Years |
|
Number of
Portfolios in
the Fund
Complex
Overseen
by Trustee |
|
Other
Directorships
Held by Trustee |
| Interested Trustees: |
|
|
|
|
|
|
|
|
|
|
| John Bartholdson 201 King of Prussia
Road, Suite 600 Radnor, PA 19087 Age: 67 |
|
3 years/
9 years |
|
Trustee/Audit Committee Financial Expert |
|
Senior Vice President, CFO and Treasurer, and a Director of
Triumph Group, Inc. (1993 -2007). |
|
1 |
|
Board of Old Mutual Advisor Funds, Old Mutual Funds II and Old Mutual Insurance Series Fund (since 2004), and Old Mutual Funds III (2008 -
2009). |
| (1) |
After a Trustee’s initial term, each Trustee is expected to serve a three-year term concurrent with the class of Trustees for which he serves. Messrs. Ferguson and
Hammer, as Class I Trustees, are expected to stand for re-election at the Trust’s 2014 annual meeting of shareholders; Mr. Nakahara, as Class II Trustee, is expected to stand for re-election at the Trust’s 2012 annual meeting of
shareholders; Messrs. Sutton and Bartholdson, as Class III Trustees, are expected to stand for re-election at the Trust’s 2013 annual meeting of shareholders. |
| * |
Mr. Ferguson is deemed to be an interested person of the Trust as defined in the Investment Company Act of 1940 (the “1940 ACT”), as amended, due to his position
with the Advisor. |
| ** |
Mr. Nakahara owned 5,000 shares of CB Richard Ellis Group, Inc. (“CB Richard Ellis”), of which the advisor is an indirect majority-owned subsidiary, as of
July 1, 2011, the date CB Richard Ellis acquired the advisor, and through September 2, 2011, technically making him an interested person of the Trust (as defined in the 1940 Act) during that period. Mr. Nakahara purchased the shares
several years ago. Mr. Nakahara no longer owns those shares and is an independent Trustee of the Trust. |
|
|
|
| 22 |
|
CBRE CLARION GLOBAL REAL ESTATE INCOME
FUND |
Supplemental Information continued
Officers
The Officers of the CBRE Clarion Global Real Estate Income Fund and their principal occupations during the past five years:
|
|
|
|
|
Name, Address, Age
and Position(s) Held
with Registrant |
|
Length of Time
Served |
|
Principal Occupations During
the Past Five Years and
Other Affiliations |
| Officers: |
|
|
|
|
| Jonathan A. Blome 201 King of Prussia Road, Suite 600 Radnor, PA 19087 Age: 35 Chief Financial Officer |
|
since 2006 |
|
Chief Financial Officer and Director of Operations of CBRE Clarion Securities LLC (since 2011); Director
and Head of Operations of CBRE Clarion Securities LLC (since 2010); Senior Vice President of CBRE Clarion Securities LLC (2005 -
2010). |
| William E. Zitelli 201 King of Prussia Road, Suite 600 Radnor, PA 19087 Age: 44 Chief Compliance Officer and Secretary |
|
since 2007 |
|
General Counsel of CBRE Clarion Securities LLC (since 2007), Chief Compliance Officer of CBRE Clarion Securities LLC (2007 - 2010) |
|
|
|
| SEMI-ANNUAL REPORT 2012 |
|
23 |
Supplemental Information concluded
Additional Information
Statement
of Additional Information includes additional information regarding the Trustees. This information is available upon request, without charge, by calling the following toll-free telephone number: 1-888-711-4272.
The Trust has delegated the voting of the Trust’s voting securities to the Trust’s advisor pursuant to the proxy voting policies and procedures of the
advisor. You may obtain a copy of these policies and procedures by calling 1-888-711-4272. The policies may also be found on the website of the Securities and Exchange Commission (http://www.sec.gov).
Information regarding how the Trust voted proxies for portfolio securities, if applicable, during the most recent 12-month period ended June 30, is also
available, without charge and upon request by calling the Trust at 1-888-711-4272 or by accessing the Trust’s Form N-PX on the Commission’s website at http://www.sec.gov.
The Trust files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Trust’s Form N-Qs are
available on the SEC website at http://www.sec.gov. The Trust’s Form N-Qs may also be viewed and copied at the Commission’s Public Reference Room in Washington, DC; information on the operation of the Public Reference Room may be
obtained by calling (800) SEC-0330.
Dividend Reinvestment Plan (unaudited)
Pursuant to the Trust’s Dividend Reinvestment Plan (the “Plan”), shareholders of the Trust are automatically enrolled, to have all distributions of dividends and capital gains reinvested by The Bank
of New York Mellon (the “Plan Agent”) in the Trust’s shares pursuant to the Plan. You may elect not to participate in the Plan and to receive all dividends in cash by sending written instructions or by contacting The Bank of New York
Mellon, as dividend disbursing agent, at the address set forth below. Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by contacting the Plan Agent before the dividend record date;
otherwise such termination or resumption will be effective with respect to any subsequently declared dividend or other distribution. Shareholders who do not participate in the Plan will receive all distributions in cash paid by check and mailed
directly to the shareholders of record (or if the shares are held in street or other nominee name, then to the nominee) by the Plan Agent, which serves as agent for the shareholders in administering the Plan.
After the Trust declares a dividend or determines to make a capital gain distribution, the Plan Agent will acquire shares for the participants’ account,
depending upon the circumstances described below, either (i) through receipt of unissued but authorized shares from the Trust (“newly issued shares”) or (ii) by open market purchases. If, on the dividend payment date, the NAV is
equal to or less than the market price per share plus estimated brokerage commissions (such condition being referred to herein as “market premium”), the Plan Agent will invest the dividend amount in newly issued shares on behalf of the
participants. The number of newly issued shares to be credited to each participant’s account will be determined by dividing the dollar amount of the dividend by the NAV on the date the shares are issued. However, if the NAV is less than 95% of
the market price on the payment date, the dollar amount of the dividend will be divided by 95% of the market price on the payment date. If, on the dividend payment date, the NAV is greater than the market value per share plus estimated brokerage
commissions (such condition being referred to herein as “market discount”), the Plan Agent will invest the dividend amount in shares acquired on behalf of the participants in open-market purchases.
The Plan Agent’s fees for the handling of the reinvestment of dividends and distributions will be paid by the Trust. However, each participant will pay a pro
rata share of brokerage commissions incurred with respect to the Plan Agent’s open market purchases in connection with the reinvestment of dividends and distributions. The automatic reinvestment of dividends and distributions will not relieve
participants of any Federal income tax that may be payable on such dividends or distributions.
The Trust reserves the right to amend or terminate the
Plan. There is no direct service charge to participants in the Plan; however, the Trust reserves the right to amend the Plan to include a service charge payable by the participants. Participants that request a sale of shares through the Plan Agent
are subject to a $2.50 sales fee and a $0.15 per share sold brokerage commission. All correspondence concerning the Plan should be directed to the Plan Agent at Computershare Shareowner Services LLC, P.O. Box 358015, Pittsburgh, PA
15252-8015, Phone Number: (866) 221-1580.
|
|
|
| 24 |
|
CBRE CLARION GLOBAL REAL ESTATE INCOME
FUND |
CBRE CLARION GLOBAL REAL ESTATE INCOME FUND
BOARD OF TRUSTEES
T. RITSON FERGUSON
ASUKA NAKAHARA
FREDERICK S. HAMMER
RICHARD L. SUTTON
JOHN BARTHOLDSON
OFFICERS
T. RITSON FERGUSON
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
JONATHAN A. BLOME
CHIEF FINANCIAL OFFICER
WILLIAM E. ZITELLI
CHIEF COMPLIANCE OFFICER
AND SECRETARY
INVESTMENT ADVISOR
CBRE CLARION SECURITIES LLC
201 KING OF PRUSSIA ROAD, SUITE 600
RADNOR, PA 19087
888-711-4272
ADMINISTRATOR AND CUSTODIAN
THE BANK OF NEW YORK
MELLON
NEW YORK, NEW YORK
TRANSFER
AGENT
COMPUTERSHARE
JERSEY CITY, NEW JERSEY
LEGAL COUNSEL
MORGAN, LEWIS & BOCKIUS, LLP
WASHINGTON, DC
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
ERNST & YOUNG LLP
PHILADELPHIA, PENNSYLVANIA
Item 2. Code of Ethics.
Not applicable for semi-annual reporting period.
Item 3. Audit Committee Financial
Expert.
Not applicable for semi-annual reporting period.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual
reporting period.
Item 5. Audit Committee of Listed Registrants.
Not applicable for semi-annual reporting period.
Item 6. Investments.
(a) The schedule of investments is included as part of the report to shareholders filed under Item 1 of this form.
(b) Not applicable.
Item 7. Disclosure
of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable for semi-annual reporting period.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable for semi-annual reporting period.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
None.
Item 10. Submission of Matters
to a Vote of Security Holders.
Not applicable.
Item 11. Controls and Procedures.
(a) The Trust’s principal executive officer and principal financial officer have evaluated the Trust’s disclosure controls and procedures within 90 days of this filing and have concluded
that the Trust’s disclosure controls and procedures were effective, as of that date, in ensuring that information required to be disclosed by the Trust in this Form N-CSR was recorded, processed, summarized, and reported timely.
(b) The Trust’s principal executive officer and principal financial officer are aware of no changes in the Trust’s internal control over
financial reporting that occurred during the Trust’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial
reporting.
Item 12. Exhibits.
(a)(1) Not applicable.
(a)(2) Certification of chief executive officer and chief financial
officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(b) Certification of chief executive officer and chief financial
officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(c) Notices to Trust’s common
shareholders in accordance with Investment Company Act Section 19(a) and Rule 19a-1.(1)
| (1) |
The Trust has received exemptive relief from the Securities and Exchange Commission permitting it to make periodic distributions of long-term capital
gains with respect to its outstanding common stock as frequently as twelve times each year. This relief is conditioned, in part, on an undertaking by the Trust to make the disclosures to the holders of the Trust’s common shares, in addition to
the information required by Section 19(a) of the Investment Company Act and Rule 19a-1 thereunder. The Trust is likewise obligated to file with the Commission the information contained in any such notice to shareholders and, in that
regard, has attached hereto copies of each such notice made during the period. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
|
|
| (Registrant) CBRE Clarion Global Real Estate Income Fund |
|
|
| By: |
|
/s/ T. Ritson Ferguson |
|
|
| Name: |
|
T. Ritson Ferguson |
|
|
| Title: |
|
President and Chief Executive Officer |
|
|
| Date: |
|
September 6, 2012 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of
1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
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| By: |
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/s/ T. Ritson Ferguson |
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| Name: |
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T. Ritson Ferguson |
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| Title: |
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President and Chief Executive Officer |
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| Date: |
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September 6, 2012 |
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| By: |
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/s/ Jonathan A. Blome |
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| Name: |
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Jonathan A. Blome |
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| Title: |
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Chief Financial Officer |
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| Date: |
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September 6, 2012 |