Pzena Investment Management, Inc. was formed in 2007 and is the sole managing
member of Pzena Investment Management, LLC, which is our operating company.
Founded in 1995, Pzena Investment Management, LLC is a value-oriented investment
management company. We believe that we have established a positive, team-oriented
culture that enables us to attract and retain highly qualified people. Over
the past twenty years, we have built a diverse, global client base of respected
and sophisticated institutional investors, select third-party distributed mutual
funds for which we act as sub-investment adviser, and funds for which we act
as investment adviser.
Pzena Investment Management, LLC is comprised of Class A and Class B membership
units, each of which have an identical economic interest in the operating company.
As a holding company, we hold all the Class A membership units and recognize
income generated from our economic interest in our operating companys net income.
The Class B membership units of the operating company are held by employees
and certain outside members. For each Class A membership unit held, we have
issued one corresponding share of Class A common stock, par value $0.01 per
share, which entitles the holder to one vote per share. For each Class B membership
unit, we have issued one corresponding share of Class B common stock, par value
$0.000001 per share, which entitles the holder to five votes per share without
dividend rights, as described below in the graphic illustration.
Unwavering Focus on Classic Value Investing. We view our unwavering focus on
long-term classic value investment excellence to be the key driver of our business
success.
Capitalize on Growth Opportunities Created By Our Global Strategies. Among
both institutional and retail investors industry-wide, over the past few years,
there have been increasing levels of investments in portfolios including non-U.S.
equities.
Work with Our Strong Consultant Relationships. We believe that we have built
strong relationships with the leading investment consulting firms who advise
potential institutional clients. Historically, new accounts sourced through
consultant-led searches have been a large driver of our inflows and are expected
to be a major component of our future inflows. We estimate that approximately
70% of all retirement plan assets are advised by investment consultants, with
a relatively small number of these consultants representing a significant majority
of these relationships. As a result of a consistent servicing effort over our
history, we have built strong relationships with consulting firms that we believe
are the most important. New accounts sourced through consultant-led searches
have been a large driver of our historical growth and are expected to be a major
component of our future growth.
Expand Our Non-U.S. Client Base. In recent years, we have increased our efforts
to develop our non-U.S. client base. Through our strong relationships with global
consultants, we have been able to accelerate the development of our relationships
with their non-U.S. branches. Over time, we aim to achieve growth of this client
base through these relationships and by directly calling on the world’s
largest institutional investors. We have also sought to expand our non-U.S.
base through our relationships with non-U.S. mutual funds and other investment
fund advisers. During 2015, we expanded our physical presence to three continents
with the launch of a business development and client service office in London,
in addition to our headquarters in the United States and representative office
in Melbourne. To date, these marketing efforts have resulted in client relationships
in more than fifteen non-U.S. countries, including the United Kingdom, Australia
and Canada. As of December 31, 2015, we managed $6.9 billion on behalf of non-U.S.
clients.
Provide Access To Our Strategies Through a Range of Investment Vehicles. Our
clients access our investment strategies through a range of investment vehicles,
including separately managed accounts, mutual funds that we sub-advise, and
certain private placement vehicles and non-U.S. funds that we offer to institutional
investors. During 2014 we launched three SEC-registered Pzena mutual funds for
which we act as investment adviser in an effort to expand the access investors
have to our strategies.
Employ Global Team to Serve Clients and Prospects. Our business development
and client service professionals are critical to our business, as noted below
under "Business Development and Client Service Teams" and are generally
focused geographically. In addition to our headquarters in the United States
and representative office in Melbourne, we have two dedicated professionals
located in our London office. During 2015 we demonstrated our commitment to
the retail market with an expanded two person leadership team focusing on the
growth of our distribution capabilities and intermediary business across channels.
Historically, a major component of our growth has been the development of new
strategies. Prior to incubating a new strategy, we perform in-depth research
on the potential market for the product, as well as its overall compatibility
with our investment expertise. This process involves analysis by our client
team, as well as by our investment professionals. We will only launch a new
product if we believe that it can add value to a client’s investment portfolio.
In the past, as appropriate, we have created partnerships with third parties
to enhance the distribution of a strategy or add expertise that we do not have
in-house. Prior to marketing a new strategy, we generally incubate the product
for a period of one to five years, so that we can test and refine our investment
strategy and process before actively marketing the product to our clients.
Furthermore, we continually seek to identify opportunities to extend our investment
process into new markets or to apply it in different ways to offer clients additional
strategies. We are currently incubating several strategies which we believe
may be attractive to our clients in the future.
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