(t to b) Co-lead managers Jay Rosenberg and John Wenker in the U.S. Bancorp Center in Minneapolis, the headquarters for First American Real Estate Securities Fund.

By Jada A. Graves

Co-portfolio managers John Wenker and Jay Rosenberg like to travel from Minnesota to Lake Horseshoe in northern Wisconsin to go ice-fishing. Equipped with a space heater and a flasher, a sonar device used to detect marine life below the frozen surface, they spend a few hours huddled around a small hole drilled two feet down in the frozen water, hoping to catch something large enough to grill.

Though Wenker and Rosenberg admit they don’t receive an opportunity to fish often enough, they relish the infrequent expeditions and use them as an opportunity to get to know each other better socially and contemplate the state of First American Real Estate Securities Fund without too many distractions.

Wenker and Rosenberg’s ability to enjoy each other’s company in and out of the office has clearly fortified the fund’s constant proficiency: First American is ranked in Lipper’s top quartile for the one, three, five and 10 year periods, and was ranked 24 out of 96 distinct funds in Lipper’s real estate category for 2006. Also last year, the fund became the first real estate recipient of a Standard & Poor’s/Business Week’s Excellence in Fund Management Award, with profiles on Wenker and Rosenberg in Business Week’s April 10, 2006 article on “Best Fund Managers.”

First American Real Estate Securities Fund Ticker: FREAX (Class A) Address: 800 Nicollet Mall, Minneapolis, MN 55402 Web Site: www.firstamericanfunds.com Phone: 800-677-3863 Inception: Sept. 29, 1995 Advisor: FAF Advisors, Inc. Total Net Assets (all share classes): $1.0 billion No. of Holdings: 69 Weighted Avg. Market Cap: $9.4 billion Price (NAV): $27.30 (as of 2/12/2007) 52-week high (date): $28.25 (on 2/2/2007) 52-week low (date): $21.12 (on 5/23/2006) Beta (3 years vs. S&P 500): 0.95

Top Five Companies: Company % of Portfolio Simon Property Group 6.9% ProLogis 6.0% Vornado Realty Trust 5.1% Boston Properties 4.1% SL Green Realty Corp 4.1% Top Five Sectors: Sector % of Portfolio Office 24.0% Apartments 18.4% Malls 12.2% Community Centers 10.8% Industrials 8.7%

The two are modest about the accolades and success, but acknowledge the importance of being shrewd about your craft and performing under pressure. “We know the companies and their management teams very well,” Wenker says. “You have to know the market, the assets and pay close attention to what senior management tells you.”

“Our job is multidisciplinary,” Rosenberg adds. “You read the ability to price risk, market sentiment, assets and platform or franchise value. You also must be able to synthesize all the information you ingest. That’s something John and I pride ourselves on—we don’t like to miss a beat and we enjoy absorbing as much information as possible.”

Both men can pinpoint the ways the real estate industry appeals to them. For Wenker, it’s the variety. “The industry is an ever-changing kaleidoscope of issues—the deals, the people, the markets, property types, volatility and cycle changes. Things are always changing and there’s always action,” he says.

Rosenberg cites the energy. “Real estate is fast-paced and is not a business where you can rest on your laurels, because your knowledge and insight can become stale very quickly,” he says. “You have to consistently keep your eye on the next trend.”

Wenker joined First American Funds in 1992 as a managing director of the fixed income department. He is the head of real estate and co-lead manager of the firm’s real estate securities team. Wenker is also lead manager of the real estate debt product. Rosenberg came to First American as a co-lead manager in 2005 after serving as a vice president and real estate portfolio manager with Advantus Capital Management. In the span of two short years, the partners have learned how their managing styles complement each other.

“Two heads are better than one. We analyze and talk things through before making decisions. It helps that Jay’s approach is different from mine,” Wenker says.

“I’m more focused on the trees while John looks at the whole forest,” Rosenberg says. “It’s very seldom that you have one person who is able to assess a situation from both a macro and micro view. What’s great about having two people of different temperaments is you need to have insight on a particular stock, but also on how those stocks relate to one another.”

First Among Equals For the average 69 holdings in First American Real Estate Securities Fund, Wenker and Rosenberg’s goal is superior long term performance with results that are good in the up markets and exceptional in down markets. To achieve this, the two allocate at least 80 percent of the fund’s assets toward REIT securities. When selecting stocks, Rosenberg and Wenker seek out companies with consistent cash flow, the best property types as well as promising geographic opportunities within the real estate market. “We want to find the best stock among its immediate peers, so we don’t compare a community center versus an office company. We compare the office company with another.” Wenker lists four bullet points to their investment strategy: to invest on their industry expertise, to focus on a relative value basis, to focus on relative risk and lastly, to focus on quality companies. With these quality companies, First American closed last year with more than $63 billion in assets, and it’s steadily growing under Wenker and Rosenberg’s watch. “We are very active managers with our portfolio,” Rosenberg adds. “Being nimble is one of the ways that we like to describe ourselves.”