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2016-05-19

Eurocastle Investment Limited: Eurocastle Announces 2016 AGM Results and First Quarter 2016 Financial Results

Guernsey, 19 May 2016 - Eurocastle Investment Limited (Euronext Amsterdam:
ECT)todayannounces the results of its 2016 Annual General Meeting held
yesterday, 18 May 2016. All ordinary and extraordinary business tabled before
the meeting in accordance with the Notice of Annual General Meeting
circulated to shareholders on 28 April 2016 was approved. This includes the
approval of the standing share buyback authority. Under this program, the
Company may repurchase a maximum of 18,100,374 shares at the minimum price of
€0.01 per share and the maximum price equal to 97.5% of the Company's most
recently published net asset value per share as at the date of the
acquisition. The definition of net asset value for these purposes was
clarified by an amendment to resolution 5 to refer to 'adjusted net asset
value' as reported by the Company. A copy of the Notice of Meeting is
available on Eurocastle's website atwww.eurocastleinv.com.

In addition, the Company today released its financial results for the first
quarter ended 31 March 2016.

FINANCIAL HIGHLIGHTS

* Normalised FFO 1 * €10.5 million, or €0.15 per share, for the first quarter
of 2016 reflecting the first full quarter ownership of doBank and including
€0.02 per share one-off impacts from the Legacy Business2,6(Q4 2015: €8.1
million, or €0.11 per share). * Before costs, Italian Investments3alone
generated €12.0 million, or €0.17 per share of Normalised FFO, resulting in
a return on average net invested capital4of 15% (Q4 2015: €9.7 million, or
€0.13 per share).
* Adjusted Net Asset Value 5 * €532.2 million, or €7.35 per share, in line
with previous quarter after paying €9.1 million of quarterly dividend (Q4
2015: €532.5 million, or €7.35 per share).
* First Quarter 2016 Dividend * €9.1 million or €0.125 per share paid in
April.

--------------------------------------------------------------------------------------------
| Q1 2016 Q4 2015 |
| € million € per share € million € per share |
| Normalised FFO1 10.5 0.15 8.1 0.11 |
| Legacy Business6Cash Flow Received 4.7 0.06 17.3 0.24 |
| Adjusted NAV5[1]5 532.2 7.35 532.5 7.35 |
| |
--------------------------------------------------------------------------------------------

BUSINESS HIGHLIGHTS

Italian Investments
- On 8 March 2016, Eurocastle entered into a structured transaction ("Fund
Investment IV") investing €1.0 million out of an anticipated €7.0 million to
acquire substantially all of the units of a newly established unlisted
Italian real estate fund set up to restructure and monetise real estate
properties owned by an over-levered real estate fund. The portfolio owned by
the fund consists of a retail portfolio in Northern Italy and 3 office assets
with a combined value of €132 million.

Italian Investment Performance -
During the first quarter, these investments in aggregate generated €10.9
million, or €0.15 per share, of cash flow. This includes €2.0 million from
the NPLs within doBank and €5.5 million from doBank's servicing business.

Legacy Business -
The Company continued making progress towards its goal of fully disposing of
these assets, collecting €4.7 million over the period including €3.6 million
from the sale of the Zama portfolio. As at 31 March 2016, the Legacy Business
has a remaining NAV of €13.0 million, or €0.18 per share, representing only
2% of the Group's Adjusted NAV.Since January 2015 the gacy Business has
generated €82.5 million of cash flow.

HIGHLIGHTS SUBSEQUENT TO 31 MARCH 2016

* At its Annual General Meeting, amongst other items, the Company received
approval to buy back up to 25% of outstanding shares at a price not
exceeding 97.5% of its most recently published Adjusted Net Asset Value per
share.
* On 10 May 2016, Eurocastle invested an additional €6.0 million into the
Fund Investment IV transaction bringing the Company's total equity
investment to €7.0 million. On completion, Eurocastle's share of the
implied net asset value of this fund was €14.2 million indicating an
acquisition at approximately a 50% discount to the implied NAV.
* In May 2016, Eurocastle received €6.8 million, or 63% of its original
investment in Fund Investment III. The distribution followed the sale of an
asset which represented 26% of the fund's total assets, with the sale price
representing a 5% premium to reported market value. The units in this fund
were acquired by the Company at a 56% discount to the fund's reported NAV
at acquisition.
* In May 2016, the Company invested €5.0 million to acquire an interest in
mezzanine tranches of a securitisation of senior Italian real estate fund
debt at a significant discount to expected recovery.

ADDITIONAL INFORMATION

For additional information that management believes to be useful for
investors, please refer to the latest presentation posted on the Investor
Relations section of the Company's website,www.eurocastleinv.com. For
consolidated investment portfolio information, please refer to the Company's
most recent Financial Report, which is available on the Company's website
(www.eurocastleinv.com).

EARNINGS CALL INFORMATION

Eurocastle's management will host an earnings conference call at 2:00 P.M.
London time (9:00 A.M. New York time) later today. All interested parties are
welcome to participate on the live call. You can access the conference call
by dialing first +1-800-215-5243 (from within the U.S.) or +1-330-863-8154
(from outside of the U.S.) ten minutes prior to the scheduled start of the
call; please reference "Eurocastle First Quarter 2016 Earnings Call" or
"conference ID number 1385711."

A webcast of the conference call will be available to the public on a
listen-only basis atwww.eurocastleinv.com. Please allow extra time prior to
the call to visit the site and download the necessary software required to
listen to the internet broadcast. A replay of the webcast will be available
for three months following the call. For those who are not available to
listen to the live call, a replay will be available until 11:59 P.M. New York
time on 19 August 2016 by dialing +1-855-859-2056 (from within the U.S.) or
+1-404-537-3406 (from outside of the U.S.); please reference access code
"1385711"
NORMALISED FFO

Normalised FFO is a non-IFRS financial measure that, with respect to the
Company's Italian Investments, recognises income on an expected yield basis
allowing Eurocastle to report the run rate earnings from these investments in
line with their projected annualised returns. On Eurocastle's Legacy Business
the measure excludes realised gains and losses, sales related costs
(including realised swap losses), impairment losses and foreign exchange
movementsand any movements on portfolios with a negative NAV other than sales
or asset management fees realised.

Eurocastle believes that, given the strategy of seeking to monetise the
existing value of the Legacy Business, focusing on the Normalised FFO of the
Company's Italian Investments will further enable investors to understand
current and future earnings given annualised returns achieved and the average
net invested capital over the relevant period.

Q1 2016
NORMALISED FFO

-----------------------------------------------------------------------------------------------------
| |
| Italian Legacy Total Average Net Invested Capital[2] Yield |
| |
| Investments € Thousands € Thousands |
| |
| € Thousands |
| Italian Investments 11,959 - 11,959 309,874 15% |
| Legacy Portfolios - 3,507 3,507 |
| Operating expenses (3,481) (1,443) (4,924) |
| Normalised FFO 8,478 2,064 10,542 |
| Per Share 0.12 0.03 0.15 |
| |
-----------------------------------------------------------------------------------------------------
In the first quarter of 2016, Eurocastle generated Normalised FFO of €10.5
million, or €0.15 per share compared to a dividend of €9.1 million, or €0.125
per share. Before corporate costs, Italian Investments generated €12.0
million, or €0.17 per share. Given the average net invested capital in the
period was approximately €310 million, this equates to a yield of 15%.

Q1 2016 INCOME STATEMENT

----------------------------------------------------------------------------------------------------------------------------
| Italian Investments Legacy Total |
| |
| € Thousands |
| € Thousands € Thousands |
| Operating income |
| Italian Investments |
| Fair value movements on Italian Investments |
| doBank (Servicer&NPL) 7,933 - 7,933 |
| NPLs[3] 781 - 781 |
| Real estate fund units (Fund Investment I) 632 - 632 |
| Share of post-tax profits from associate investment in RE fund units (Fund 4,225 - 4,225 |
|Investment III) ...

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