Newcastle’s core business strategy is to invest in a diverse portfolio of real estate securities and other real estate-related assets. The Company’s investment philosophy is built around the principles of investing in a moderate amount of credit risk, adhering to strong investment and credit discipline and actively managing the portfolio to achieve its objectives. Fundamental to the investment philosophy is diversification as a means to minimize the risk of capital loss as well as to enhance financing terms.

INVEST
Newcastle’s investments include commercial mortgage backed securities, senior unsecured debt issued by property real estate investment trusts, credit leased real estate, asset backed securities and mortgage loans. The Company generally targets securities rated “A” through “BB” with first loss credit protection.

MATCH FUND
The Company seeks to match fund its assets with respect to interest rates and maturities in order to minimize the impact of interest rate fluctuations on earnings, and to reduce the risk of refinancing its liabilities prior to the maturities of its assets. Newcastle makes money by locking-in the difference between the yield on assets and the cost of liabilities (net spread) and optimizing this difference over the life of the financing. The Company also designs its financings to provide the flexibility to manage the credit profile of its assets on an ongoing basis. All of its investment and financing transactions are structured in-house.

MANAGE ASSETS
Newcastle actively manages its credit exposure through portfolio diversification and ongoing asset surveillance and selection. Newcastle has a dedicated team of senior investment professionals experienced in real estate, capital markets, structured finance and asset management. The Company believes that these critical skills position it well not only to make prudent investment decisions but also to monitor and manage the credit profile of its investment portfolio.