Marathon's Real Estate Finance Fund aims to achieve high risk-adjusted returns through current income and/or capital appreciation by investing in real estate loans and related instruments, including but not limited to mortgage loans, B-notes and participations, mezzanine loans, CMBS and Real Estate Structured Finance Products.

• MORTGAGE LOANS: Individual or a portfolio of mortgage loans from various sellers, including mortgage bankers, mortgage brokers, life insurance companies, banks, investment banks and property owners, which are generally secured by real estate properties in the United States.



• TERM B, SECOND LIEN AND MEZANINE LOANS: A Term B loan shares a first priority lien in the borrower's collateral with senior loans, but is subordinate to such senior loans in order of payment. A second lien loan is secured by a lien that is junior in order of priority and the loan itself is also subordinate to the borrower's senior loans in order of payment. A mezzanine loan does not share in the same collateral package as the borrower's senior loans, may be unsecured and is subordinate to senior loans in order of payment.



• B-NOTES: These are junior participations in a first mortgage loan on a single property or group of related properties. The senior participation is known as an A-Note. Although a B-Note may be evidenced by its own promissory note, it shares a single borrower and mortgage with the A-Note and is secured by the same collateral. B-Note lenders have the same obligations, collateral and borrower as the A-Note lender. The B-Note is subordinate to the A-Note by virtue of a contractual or intercreditor arrangement between the A-Note lender and the B-Note lender. For the B-Note lender actively to pursue its available remedies (if any), it must, in most instances, purchase the A-Note, or maintain its performing status in the event of a default on the B-Note. The B-Note lender may in some instances require a security interest in the stock or partnership interests of the borrower as part of the transaction. If the B-Note holder can obtain a security interest, it may be able to accelerate gaining control of the underlying property, subject to the rights of the A-Note holder. Both of these debt instruments are senior to the mezzanine debt tranches described above though may be junior to another junior participation in the first mortgage loan.



• CMBS: Typically pass-through certificates created by the securitization of a single mortgage loan or a pool of mortgage loans that are collateralized by commercial real estate properties.



• REAL ESTATE STRUCTURED FINANCE PRODUCTS: Other real estate structured finance products, total return swaps, including preferred equity structures and loans to real estate companies that are not specific to a particular property. These investments may take the form of secured debt and other hybrid instruments such as corporate mezzanine loans.