Westwood Holdings Group Inc's Business Segments

We manage investment assets and provide services for our clients through our subsidiaries, Westwood Management Corp. and Westwood Advisors, LLC (together, “Westwood Management”), Westwood International Advisors Inc. (“Westwood International”) and Westwood Trust. Westwood Management, founded in 1983, provides investment advisory services to institutional investors, a family of mutual funds called the Westwood Funds®, other mutual funds, an Ireland-domiciled fund organized pursuant to the European Union’s Undertakings for Collective Investment in Transferable Securities (“UCITS”), individual investors and clients of Westwood Trust. Westwood International was established in 2012 and provides investment advisory services to institutional clients, the Westwood Funds®, other mutual funds, UCITS funds and clients of Westwood Trust. Westwood Trust, founded as a state-chartered trust company in 1974, provides trust and custodial services and participation in self-sponsored common trust funds to institutions and high net worth individuals. Our revenues are generally derived from fees based on a percentage of assets under management. We were incorporated under the laws of the State of Delaware on December 12, 2001. Our common stock is listed on the New York Stock Exchange under the ticker symbol “WHG.” We are a holding company whose principal assets consist of the capital stock of Westwood Management, Westwood Trust and Westwood International.

Westwood Holdings Group, Inc. operates as an independent investment management firm, primarily providing advisory and trust services for a diverse range of clients. The firm is renowned for its comprehensive suite of investment strategies, catering to institutional and individual investors alike. Heres an extensive overview of the segments, products, and services offered by Westwood Holdings Group:

1. Advisory Services

Westwoods advisory services are structured around two primary entities: Westwood Management and Westwood International. These services are further divided into distinct investment teams, each focusing on different strategies and markets.

Westwood Management
- Client Base: Primarily large institutions such as corporate and public retirement plans, endowments, and foundations. The firm also offers services to individuals and pooled investment vehicles.
- Separate Account Requirements: Institutional separate account minimums typically range from $5 million to $25 million, depending on the investment strategy.
- Investment Teams:
- U.S. Value Team: Focuses on value-oriented investments with an emphasis on controlling risk and preserving capital.
- Global Convertible Securities Team: Specializes in managing both long-only and liquid alternative global convertible securities strategies.
- Global and Emerging Markets Equity Team: Concentrates on identifying mispriced businesses primarily in emerging markets.

Westwood International
- Client Base: Similar to Westwood Management, but specifically aimed at institutions, pooled investment vehicles, and UCITS funds in the Canadian market.
- Separate Account Requirements: Institutional separate account minimums generally fall between $10 million and $25 million.
- Investment Strategies: Managed by the Global and Emerging Markets Equity Team, which operates under a participating affiliate agreement with Westwood Management. The advisory and subadvisory services mirror those provided by Westwood Management.

Investment Strategies

Westwood offers a broad array of investment strategies, with several boasting over $1 billion in assets under management. These include:

- Income Opportunity Strategy: Focuses on dividend-paying stocks, preferred stocks, convertible securities, Master Limited Partnerships (MLPs), Real Estate Investment Trusts (REITs), and selected debt instruments.
- Value-Oriented Strategies:
- LargeCap Value: Invests in seasoned companies with significant market capitalizations.
- SMidCap Value: Targets small to mid-sized companies, seeking operational improvements and value recognition.
- SmallCap Value: Concentrates on smaller firms, looking for companies with strong earnings potential not yet priced in by the market.
- AllCap Value: A flexible strategy that invests across market capitalizations, using a value-oriented approach.

- Global Convertible Securities: The Global Convertible Securities Team employs a disciplined approach to manage various convertible securities strategies, focusing on both return generation and risk management.
- Global and Emerging Markets Investments: This includes strategies focused on identifying companies in emerging markets and globally, assessing their potential for sustainable earnings growth.

Trust Services

Westwood Trust offers comprehensive fiduciary and investment services tailored for high-net-worth individuals and families, institutional clients, and non-profit organizations.

Fiduciary Services
- Financial Planning: Comprehensive planning that includes wealth transfer and estate planning.
- Trust Administration: Customizable trust services, including the administration of various trusts.
- Custodial Services: Management of assets, tax reporting, accounting of income, and distributions.

Investment Services
- Portfolio Development: Westwood Trust employs a consultative approach to create customized portfolio allocations based on client objectives.
- Common Trust Funds: Several funds are established to optimize efficiency and scale for clients, investing across Westwoods managed strategies.

- Enhanced Balanced® Portfolios: These portfolios focus on diversification across asset classes to maximize returns for a given risk level.

Distribution Channels

Westwood employs multiple distribution channels to enhance its market reach and optimize client service:

- Institutional: Engages with investment consultants and financial intermediaries to access institutional clients such as retirement plans, foundations, and endowments.
- Mutual Funds: The Westwood Funds® are marketed to various intermediaries including investment consultants and financial advisors.
- Private Wealth: Targets high-net-worth individuals through community engagement, referrals, and direct marketing to expand its client base.

Revenue Model

Westwood generates revenue through advisory agreements that are typically based on a percentage of the assets under management. This includes:
- Base Advisory Fees: Charged quarterly, either in advance or in arrears, based on the market value of client assets.
- Performance-Based Fees: Some clients may have agreements that include performance incentives based on exceeding benchmark returns.

Conclusion

Westwood Holdings Group, Inc.s comprehensive suite of investment and trust services positions it well within the asset management landscape. The firm emphasizes strong investment performance, a tailored approach to client needs, and strategic growth through relationship building and service expansion, catering effectively to both institutional and high-net-worth clients.