Performance

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Performance

Pzena Composite Annualized Performance

Period ending October 31, 2017



The table above indicates the annualized returns, gross and net (which represents returns prior to and after payment of advisory fees, respectively), of our ten largest investment strategies* from their inception to October 31, 2017 and in the five-year, three-year, one-year and year-to-date periods ended October 31, 2017. All performance numbers are preliminary and subject to change.

Pzena Investment Management LLC claims compliance with Global Investment Performance Standards (GIPS®) and has been verified for the period January 1, 1996 to December 31, 2016. The table above is an abbreviated presentation of composite performance. Additional information is available upon request regarding policies for calculating and reporting returns. To receive a complete list and description of Pzena Investment Management’s composites and/or a full presentation that adheres to the GIPS standards, contact Joan Berger at (212) 583-1291, or write to Pzena Investment Management, 320 Park Avenue, 8th Floor, New York, NY 10022 or berger@pzena.com.

Past performance is no guarantee of future results, and the past performance of any account or commingled fund managed by Pzena Investment Management should not be considered indicative of the future performance of any account or commingled fund managed by Pzena Investment Management. Investment return and principal value of an investment will fluctuate over time. The performance information provided is historical in nature; nothing in this report should be construed as an offer to sell (or the solicitation of an offer to buy) any product or service of Pzena Investment Management, LLC. The performance information presented for each investment strategy represents composite performance of separately-managed accounts and/or commingled funds (depending on the particular investment strategy presented).

*We launched the Pzena Mid Cap Value strategy on April 1, 2014. In terms of asset size, the strategy would now be one of our largest investment strategies with total assets of $2,286.1 million. However, given limited performance data, we have excluded the strategy from the chart at this time. The monthly performance for Pzena Mid Cap Value is 1.3% gross and 1.3% net, and inception to date annualized performance is 10.3% gross and 10.1% net.

Performance Notes Specific to Domestic Products

The domestic product returns presented are for Pzena Large Cap Focused Value, Pzena Large Cap Value (formerly known as Pzena Large Cap Expanded Value), Pzena Focused Value, Pzena Small Cap Focused Value, and Pzena Mid Cap Value (formerly known as Pzena Mid Cap Expanded Value) composites. Pzena Large Cap Focused Value is a portfolio generally consisting of 30-40 stocks generally taken from a universe of the largest 500 U.S.-traded companies at time of initial purchase; Pzena Large Cap Value is a portfolio generally consisting of 50-80 stocks generally taken from a universe of the largest 500 U.S.-traded companies at time of initial purchase; Pzena Focused Value is a portfolio generally consisting of 30-40 stocks generally taken from a universe of the largest 1,000 U.S.-traded companies at time of initial purchase; Pzena Small Cap Focused Value is a portfolio generally consisting of 40-50 stocks generally taken from a universe of 2,000 U.S.-traded companies ranked 1,001 – 3,000 in terms of market capitalization at time of initial purchase; Pzena Mid Cap Value is a portfolio generally consisting of 50-80 stocks generally taken from a universe of 1,000 U.S.-traded companies ranked 201-1,200 in terms of market capitalization at the time of initial purchase.

As of December 31, 2016, the Pzena Large Cap Focused Value composite included 21 accounts with total assets of $3,651.0 million and represented 99.0% of our assets in this product. As of December 31, 2016, the Pzena Large Cap Value Composite included 3 accounts with total assets of $5,296.7 million and represented 100% of our assets in this product. As of December 31, 2016, the Pzena Focused Value Composite included 58 accounts with total assets of $2,007.0 million and represented 99.9% of our assets in this product. As of December 31, 2016, the Pzena Small Cap Focused Value Composite included 51 accounts with total assets of $1,531.8 million and represented 97.0 of our assets in this product. As of December 31, 2016 the Pzena Mid Cap Value Composite included 1 account with total assets of $2,108.3 million and represented 100% of our assets in this product.

As of December 31, 2016, 0.04% of the Pzena Large Cap Focused Value Composite assets, 0.0% of the Pzena Large Cap Value Composite assets, 0.6% of the Pzena Focused Value Composite assets, 0.1% of the Pzena Small Cap Focused Value Composite assets, and 0.0% of the Pzena Mid Cap Value Composite assets were represented by non-fee paying accounts. No leverage was employed in the accounts in any of the domestic product composites. Eligible new portfolios enter the relevant Composite at the beginning of the first full month under management. Terminated portfolios are removed from the Composite after the last full month under management.

The Pzena Focused Value and Pzena Small Cap Focused Value Composites were created on January 1, 1996. The Pzena Large Cap Focused Value Composite was created on October 1, 2000. The Pzena Large Cap Value Composite was created on July 1, 2012. The Pzena Mid Cap Value Composite was created on April 1, 2014. No accounts with any significant client-imposed investment restrictions are included in the Composites.

Each Composite includes all fee-paying, non fee-paying, and non-wrap fee accounts since inception date, and mutual fund portfolios since April 2011 that are managed on a fully discretionary basis in the particular product represented by such composite. The rates of returns are calculated on a time-weighted, total return basis and include all dividends, interest, accrued income, and realized and unrealized gains or losses. Returns are calculated in U.S. dollars.

The gross rates of return are presented gross of investment management fees, and net of the deduction of brokerage commissions and transaction costs. The net rates of return are presented net of investment management fees, the deduction of brokerage commissions and transaction costs.

Generally, investment management fees are charged based upon the size of the portfolio, and are applied quarterly. The current standard fee schedule for Pzena Large Cap Focused Value is as follows: for accounts of $10 million or more, the fees are 0.70% per annum on the first $25 million of assets, 0.50% per annum on the next $75 million of assets, 0.40% per annum on the next $200 million of assets, and 0.35% thereafter; for accounts under $10 million, the fees are 1.00% per annum with a maximum annual fee of $70,000. The current standard fee schedule for Pzena Large Cap Value is as follows: 0.50% per annum on the first $25 million of assets, 0.35% per annum on the next $75 million of assets, 0.30% per annum on the next $200 million of assets, and 0.25% thereafter. The current standard fee schedule for Pzena Focused Value is as follows: for accounts of $10 million or more, the fees are 1.0% per annum on the first $10 million; 0.75% per annum on the next $40 million; 0.60% per annum on the next $50 million; and 0.50% per annum thereafter; for accounts under $10 million, the fees are 1.5% per annum, with a maximum annual fee of $100,000. The current standard fee schedule for Pzena Small Cap Focused Value is as follows: for accounts of $10 million or more the fees are 1.0% per annum; for accounts under $10 million, the fees are 1.5% per annum with a maximum annual fee of $100,000. The current standard fee schedule for Pzena Mid Cap Value is as follows: 0.50% per annum on the first $100 million, 0.45% per annum on the next $100 million, and 0.40% per annum thereafter. To illustrate the compounded effect of the deduction of a 1.0% annual fee on a hypothetical investment of $1,000 in an account where the average annual return before fees was 10% for a 10-year period, and assuming reinvestment of all dividends and interest, the initial investment would have grown to $1,100 after one year before fees and $1,089 after fees; to $1,611 after five years before fees and $1,532 after fees; and to $2,594 at the end of ten years before fees and $2,346 after fees. Further discussion regarding our advisory fees is contained in our Form ADV, Part 2A.

Performance Notes Specific to International and Global Products

Pzena International Value (formerly known as Pzena International Value EAFE and previously Pzena International (ex-U.S.) Expanded Value) is a portfolio generally consisting of 60-80 stocks generally taken from the largest 1,500 non-U.S.-traded companies at time of initial purchase. Pzena International Focused Value (formerly known as Pzena International (ex-U.S.) Focused Value) is a portfolio generally consisting of 30-50 stocks generally taken from the largest 1,500 non-U.S.-traded companies at time of initial purchase. Pzena Global Focused Value is a portfolio generally consisting of 40-60 stocks generally taken from the 2,000 largest companies worldwide at time of initial purchase. Pzena Global Value (formerly known as Pzena Global Value World and previously Pzena Global Expanded Value) is a portfolio generally consisting of 60-95 stocks generally taken from the 2,000 largest companies worldwide at time of initial purchase. Pzena Emerging Markets Focused Value is a portfolio generally consisting of 40-80 stocks generally taken from the largest 1,500 companies in the non-developed markets at time of initial purchase. Pzena European Focused Value is a portfolio generally consisting of 40-60 stocks generally taken from the 750 largest European companies at the time of initial purchase.

As of December 31, 2016, the Pzena International Value Composite included 10 accounts with total assets of $3,257.4 million and represented 84.9% of our assets in this product. As of December 31, 2016, the Pzena International Focused Value Composite included 5 accounts with total assets of 616.2 million and represented 75.4% of our assets in this product. As of December 31, 2016, the Pzena Global Focused Value Composite included 13 accounts with total assets of $2,391.7 million and represented 100% of our assets in this product. As of December 31, 2016, the Pzena Global Value Composite included 8 accounts with total assets of $1,627.2 million and represented 76.7% of our assets in this product. As of December 31, 2016, the Pzena Emerging Markets Focused Value Composite included 10 accounts with total assets of $1,610.5 million and represented 75.4% of our assets in this product. As of December 31, 2016, the Pzena European Focused Value Composite included 7 accounts with total assets of $1,895.6 million and represented 88.2% of our assets in this product.

As of December 31, 2016, 0.0% of the Pzena International Value Composite, 0.0% of the Pzena International Focused Value Composite, 0.5% of the Pzena Global Focused Value Composite, 0.0% of the Pzena Global Value Composite, 0.0% of the Pzena Emerging Markets Focused Value Composite, and 0.1% of the Pzena European Focused Value Composite were represented by non-fee paying accounts. No leverage was employed in the accounts in the Composites. FX currency transactions were used to transact in equity securities only, where applicable. Eligible new portfolios are added to the Composites at the beginning of the first full month under management. Terminated portfolios are removed from the Composites after the last full month that the portfolio is under firm management.

The Pzena International Value Composite was created on November 1, 2008. The Pzena International Focused Value Composite was created on January 1, 2004. The Pzena Global Value Composite was created on January 1, 2010. The Pzena Global Focused Value Composite was created on June 1, 2008 and represents returns for clients invested in the strategy since the inception date of January 1, 2004. The Pzena Emerging Markets Focused Value Composite was created on January 1, 2008. The Pzena European Focused Value Composite was created on August 1, 2008. No accounts with any significant client imposed investment restrictions are included in the Composite.

Each Composite includes all fee-paying, non fee-paying, and non-wrap fee accounts since inception date, and mutual fund portfolios since April 2011 that are managed on a fully discretionary basis in the particular style represented by such composite.

All International and Global product returns in this report have been presented both gross and net of investment management fees. The returns are calculated using the same methodology as the Domestic Products referenced herein. Returns are calculated in U.S. dollars (“USD”).

Generally, investment management fees are charged based upon the size of the portfolio, and are applied quarterly. The standard fee schedule for Pzena International Value is currently: 0.55% per annum on the first $100 million, 0.45% per annum on the next $200 million, million and 0.35% per annum on assets above $300 million. The standard fee schedule for Pzena International Focused Value is currently: 0.75% per annum on the first $50 million, 0.65% per annum on the next $50 million, 0.50% per annum on assets above $100 million. The standard fee schedule for Pzena Global Focused Value is currently: 1.00% per annum on the first $10 million, 0.80% per annum on the next $40 million, 0.70% per annum on the next $50 million, 0.60% on the next $200 million and 0.55% per annum on assets above $300 million. The standard fee schedule for Pzena Global Value is currently: 0.55% per annum on the first $100 million, 0.45% per annum on the next $200 million, and 0.35% per annum on assets above $300 million. The standard fee schedule for Pzena Emerging Markets Focused Value is currently: 1.00% per annum on the first $50 million and 0.70% per annum on assets above $50 million. The standard fee schedule for Pzena European Focused Value is currently: 0.75% per annum on the first €20 million, 0.55% per annum on the next €80 million, 0.45% per annum on the next €150 million, and 0.40% on assets above €250 million. To illustrate the compounded effect of the deduction of a 1% annual fee on a hypothetical investment of $1,000 in an account where the average annual return before fees was 10% for a 10-year period, and assuming reinvestment of all dividends and interest, the initial investment would have grown to $1,100 after one year before fees and $1,089 after fees; to $1,611 after five years before fees and $1,532 after fees; and to $2,594 at the end of ten years before fees and $2,346 after fees. Further discussion regarding our advisory fees is contained in our Form ADV, Part 2A.