This Pzena Investment Management, LLC (“Pzena”) commentary is a historical document and is intended solely for informational purposes. The views expressed reflect the views of Pzena Investment Management (“PIM”) as of the date published and are subject to change. Neither the writer nor PIM undertake to advise you of any changes in the views expressed therein. There is no guarantee that any projection, forecast, or opinion in this material has been or will be realized. Past performance is not indicative of future results. All investments involve risk, including risk of total loss.
Value investors buy stocks when investors are fearful and where pessimism is already reflected in valuations, but the long-term earnings potential is not recognized.
VALUATION EXTREMES AND RARE OPPORTUNITIES
Investors seem to be chasing recent performance, flocking to growth and so-called safety shares despite their high valuations that we view as unsustainable given the current trajectory of earnings. In contrast, cyclical shares have been shunned, remaining undervalued throughout the past market cycle, and are now priced at recessionary levels. The improved fundamentals and positive earnings trajectory of these companies, during the recovery, have not protected their stocks from being disproportionately weighed down by every negative news headline.
Dedicated value investors seize on opportunities to pick stocks when pessimism is already priced in, but earnings potential is not yet recognized. We believe the world is facing one of those rare points when fear has reached an extreme, and a tremendous number of overlooked but good companies are available at fire-sale prices.
A WORLD AT RARE EXTREMES
Amid rising macroeconomic uncertainty, investors’ commitment to near-term favorites alongside the dismissal so many others has created wide valuation dispersions.1 Figure 1 illustrates that today’s polarization, based on price-to-book (P/B) measures, has spiked to over three standard deviations from the mean. This extreme level surpasses 99% of the monthly observations in the 45-year history of our global data.
Figure 1: Dispersions are Approaching those of the Internet Bubble
DEVELOPED WORLD VALUATION DISPERSION BETWEEN CHEAPEST AND MOST EXPENSIVE STOCKS
Data through June 2019. Source: Sanford C. Bernstein & Co., Pzena analysis
Dispersion based on price to book; equally-weighted data
Universe is the largest ~1,600 stocks by market capitalization in developed world
Based on our proprietary estimates of price-to-normalized earnings (P/N), we see stocks in the cheapest quintile trading at 50% discounts to median valuations across the global universe.2 Within our own portfolios, the spreads between our median P/Ns and those of their respective universes are very attractive, and in many cases, they are as wide as other periods of extreme market stress such as in 2008, 2011, or 2016.
Today, growth’s dominance over value has reached an extreme not seen since the peak of the internet bubble. Given the extent of the current dislocation, and the long drought in value investing, it’s easy to forget that value stocks have traditionally outperformed over the long term. Moreover, this outperformance has corresponded with times of wide dispersion in valuations.
THE GROWING COST OF HIGH-PRICED STOCKS
During the current cycle, investors have paid up for the promise of growth in an attempt to improve returns amid the most tepid recovery of any in the US post-war era.i
Stocks in the highest valuation quintile of the US universe have largely raised the multiple for the broad index during this cycle, as implied in Figure 2. While the stocks within the cheapest quintile performed positively this cycle, they lagged the broader market. As a result, their valuations never rerated after the GFC, moving from a lowly 6x earnings in 2009 to just 8x today. Meanwhile, the more expensive stocks started the period at an already high price to earnings (P/E) of 29x in 2009 but have grown to an excess of 80x today. What’s resulted is the largest dispersion in valuations in the 68-year history of the data — a distortion that we argue is not sustainable.
Figure 2: The Most Highly Valued Stocks Have Led the Market Higher
RECORD VALUATION DISPERSION
Source: National Bureau of Economic Research, Sanford C. Bernstein & Co., Pzena analysis
The lines show the market-cap weighted trailing P/E ratios for the most expensive and cheapest quintiles of the US market. Data is from 1951 through 2018
Universe is the largest ~1,500 US stocks ranked by market capitalization
Today’s valuation is higher than the level reached by a similar segment of expensive US stocks in the heyday of the dot-com bubble. Substantial growth is necessary to warrant these lofty valuations, and while a few remarkable companies may be able to achieve this feat, the vast majority won’t.
Starting points are critical to investment returns — and purchasing the most expensive shares in today’s market may do more to destroy wealth than protect it.
STABILITY AT THE COST OF GROWTH
The more defensive investors have been moving into stocks that they view as stable, and they’ve been willing to pay a premium for the privilege. Low-volatility shares within the MSCI ACWI Index, for instance, are trading at an aggregate P/E of 18.9x,i slightly higher than that of the MSCI’s broad ACWI Growth Index.4, ii Is it sensible that low-volatility shares have a multiple that’s on par with growth stocks without the possibility of much earnings growth?
Meanwhile, compared to value shares, trading at a P/E of 7.2x, low-volatility stocks globally are trading at premiums not seen since the Asian Financial Crisis (according to Figure 3). In the US, this spread has reached a further extreme with low volatility trading at an all-time high versus value.3,i
Figure 3: Low-volatility Stocks are Expensive Versus Value Shares
Source: Courtesy J.P. Morgan Chase & Co., Copyright 2017
Data from 1993 through May 2019
Value is defined as the combination of P/E, P/B and P/S. Low volatility is based on realized 1-year volatility.
The desire for safety is proving greater during this cycle than previously, but if investors are buying low-volatility at high valuations, they may be exposing themselves to more risk than they bargained for — and downside protection could fail just when they need it most.
VALUATION SHOULD ALWAYS BE LINKED TO EARNINGS POWER
The large number of dislocations in today’s market has some investors asking, “Is this time different?” We noted how much the returns of the high flyers have exceeded their peers during this cycle. Although some of the explanation for this outperformance is due to their stronger profitability this cycle, we believe the most optimistic scenarios are already priced into these stocks. (When positive outcomes are already embedded in share prices, investors take on undue risk.)
Meanwhile, among the stocks that were hit the hardest in the prior recession (consider financials this time), profitability normalization hasn’t been much different from last time. Figure 4 illustrates this point in comparing companies that started in the bottom (10th) decile of profitability based on return on equity (ROE). During both the current cycle (2008 – 2018) and the last one (1997 – 2007), approximately 70% of the stocks that were hardest hit were able to raise their profitability to the average level of their peers within three years.
Figure 4: Businesses with Lower Profitability Catch Up to Peers
MEAN REVERSION OF LOW ROE STOCKS IN S&P 500
Source: Courtesy J.P. Morgan Chase & Co., Copyright 2017
This demonstrates on a broad level what we witness in every cycle with companies facing temporary pain. A business will enact self-help to repair earnings rather than enduring a subpar ROE and falling behind the competition. From an operational standpoint, we don’t believe this time is different. What’s different is the disconnect between valuations and earnings for these companies. After demonstrating the ability to improve earnings at a typical pace, valuations should follow earnings.
In this period, when extreme macro-related headlines are overshadowing all else, we continue to concentrate on the substance of the business. Benjamin Graham once said, “In the short run the market is a voting machine, but in the long run it is a weighing machine.” Ultimately, it’s the market’s fear and indiscriminate reactions without focusing on a company’s fundamentals that create value opportunities.
CONCLUSION
Today’s market offers a wide range of stocks that are trading in deep-value territory, while so many others in the broader markets are priced well above their long-term averages. Value investors buy stocks when the markets are fearful and where pessimism is already reflected in valuations, but the long-term earnings potential is not.
The combination of broad-based valuations, the late stage of the economic cycle, and a host of exogenous threats increase the likelihood that the next five years will post lower stock market returns than the last five years. The likelihood that global market extremes indicate that an inflection point is near underscores the importance of selectivity and a research-driven process that can uncover opportunities without paying a high price.
We invite investors to exploit today’s valuation anomalies, rather than attempting to predict what near-term event will happen next. The current market provides investors rare, significant opportunities to buy good businesses at deep discounts that may have encountered significant issues but are clawing their way back.
Valuation dispersions are the difference in the price-to-book ratios between the cheapest and the most expensive quintile of stocks in a given universe.
Based on the largest 2,000 stocks in the global universe.
Based on relative Standard & Poor’s indices
According to MSCI, as of May 31, 2019, based on forward earnings. Since this writing, MSCI ‘s June update shows a forward P/E of 20.4x for the MSCI ACWI Growth Index, in US dollars.
ENDNOTES
Lakos-Bujas, D. et al., “The Value Conundrum,” J.P. Morgan Securities LLC, June 6, 2019, pp. 9, 11
These presentation materials are intended for the exclusive purpose of evaluating the investment advisory services of Pzena Investment Management, LLC (“PIM”). PIM is located at 320 Park Avenue, 8th Floor, New York, NY 10022 and is an investment adviser registered with the U.S. Securities and Exchange Commission. Any other use is strictly prohibited.
Past performance is not indicative of future results. All investments involve risk, including risk of total loss.
The specific portfolio securities discussed in this material are included for illustrative purposes only and were selected based on their ability to help you better understand our investment process. They do not represent all of the securities purchased or sold by PIM during the period. There is no assurance that any securities discussed herein remain in our portfolios at the time you receive this presentation or that securities sold have not been repurchased. PIM is a discretionary investment manager and does not make “recommendations” to buy or sell any securities.
This document does not constitute an offer to sell, or a solicitation of an offer to buy, securities or investment advisory services in any jurisdiction where such an offer or solicitation is against the law, or to anyone to whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so. The information contained herein is general in nature and does not constitute legal, tax, or investment advice. Prospective investors are encouraged to consult their own professional advisers as to the implications of making an investment in any securities or investment advisory services.
For European Investors Only:
This financial promotion is issued by Pzena Investment Management, Ltd. Pzena Investment Management, Ltd. is a limited company registered in England and Wales with registered number 09380422, and its registered office is at Dashwood House, 69 Old Broad Street, London EC2M 1QS, United Kingdom. Pzena Investment Management, Ltd is an appointed representative of DMS Capital Solutions (UK) Limited and Mirabella Advisers LLP, which are authorised and regulated by the Financial Conduct Authority. The Pzena documents are only made available to professional clients and eligible counterparties as defined by the FCA. Past performance is not indicative of future results. The value of your investment may go down as well as up, and you may not receive upon redemption the full amount of your original investment. The views and statements contained herein are those of Pzena Investment Management, LLC and are based on internal research.
For Australia and New Zealand Investors Only:
This document has been prepared and issued by Pzena Investment Management, LLC (ARBN 108 743 415), a limited liability company (“PIM”). PIM is regulated by the Securities and Exchange Commission (SEC) under U.S. laws, which differ from Australian laws. PIM is exempt from the requirement to hold an Australian financial services license in Australia in accordance with ASIC Corporations (Repeal and Transitional) Instrument 2016/396. PIM offers financial services in Australia to ‘wholesale clients’ only pursuant to that exemption. This document is not intended to be distributed or passed on, directly or indirectly, to any other class of persons in Australia.
In New Zealand, any offer is limited to ‘wholesale investors’ within the meaning of clause 3(2) of Schedule 1 of the Financial Markets Conduct Act 2013 (‘FMCA’). This document is not to be treated as an offer, and is not capable of acceptance by, any person in New Zealand who is not a Wholesale Investor.
For Jersey Investors Only:
Consent under the Control of Borrowing (Jersey) Order 1958 (the “COBO” Order) has not been obtained for the circulation of this document. Accordingly, the offer that is the subject of this document may only be made in Jersey where the offer is valid in the United Kingdom or Guernsey and is circulated in Jersey only to persons similar to those to whom, and in a manner similar to that in which, it is for the time being circulated in the United Kingdom, or Guernsey, as the case may be. The directors may, but are not obliged to, apply for such consent in the future. The services and/or products discussed herein are only suitable for sophisticated investors who understand the risks involved. Neither Pzena Investment Management, Ltd. nor Pzena Investment Management, LLC nor the activities of any functionary with regard to either Pzena Investment Management, Ltd. or Pzena Investment Management, LLC are subject to the provisions of the Financial Services (Jersey) Law 1998.
Institutional Investors - Important Legal Acknowledgement
The information on this website is intended for institutional investors and consultants to institutional investors. It is published for informational purposes only and does not purport to address the financial objectives, situation or specific needs of any investor. If you do not qualify as an institutional investor or consultant, the information shown on this site may not be relevant or appropriate for you.
For UK Investors Only:
The information on this website is intended only for professional clients and eligible counterparties as defined by the Financial Conduct Authority (FCA) and should not be relied upon by other persons, such as Retail Clients, as outlined under the FCA’s Rules. The definitions can be found on the FCA website at www.fca.org.uk . Pzena Investment Management, Ltd. (“PIM UK”) is a limited company registered in England and Wales with registered number 09380422, and its registered office is at 34-37 Liverpool Street, London EC2M 7PP, United Kingdom. PIM UK is an appointed representative of Vittoria & Partners LLP (FRN 709710), which is authorised and regulated by the FCA. Past performance is not indicative of future results. The value of your investment may go down as well as up, and you may not receive upon redemption the full amount of your original investment. The views and statements contained herein are those of Pzena Investment Management and are based on internal research.
For Switzerland Investors Only:
In Switzerland, the information on this website is intended only for qualified investors according to art. 10 para. 3 and 3ter CISA
Investment Professionals - Important Legal Acknowledgement
The information on this website is intended for institutional investors and consultants to institutional investors. It is published for informational purposes only and does not purport to address the financial objectives, situation or specific needs of any investor. If you do not qualify as an institutional investor or consultant, the information shown on this site may not be relevant or appropriate for you.
For UK Investors Only:
The information on this website is intended only for professional clients and eligible counterparties as defined by the Financial Conduct Authority (FCA) and should not be relied upon by other persons, such as Retail Clients, as outlined under the FCA’s Rules. The definitions can be found on the FCA website at www.fca.org.uk . Pzena Investment Management, Ltd. (“PIM UK”) is a limited company registered in England and Wales with registered number 09380422, and its registered office is at 34-37 Liverpool Street, London EC2M 7PP, United Kingdom. PIM UK is an appointed representative of Vittoria & Partners LLP (FRN 709710), which is authorised and regulated by the FCA. Past performance is not indicative of future results. The value of your investment may go down as well as up, and you may not receive upon redemption the full amount of your original investment. The views and statements contained herein are those of Pzena Investment Management and are based on internal research.
For Switzerland Investors Only:
In Switzerland, the information on this website is intended only for qualified investors according to art. 10 para. 3 and 3ter CISA
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Andrew Chung, CFA
Principal and Senior Research Analyst
Mr. Chung became a member of the firm in 2014. Prior to joining Pzena Investment Management, Mr. Chung was a senior associate at Dodge & Cox and began his career as a research associate at Sanford C. Bernstein. He earned a B.S.E. summa cum laude in Finance and a B.A.S. in Computer Science from the University of Pennsylvania. Mr. Chung holds the Chartered Financial Analyst designation.
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Second Quarter 2019 Commentary
This Pzena Investment Management, LLC (“Pzena”) commentary is a historical document and is intended solely for informational purposes. The views expressed reflect the views of Pzena Investment Management (“PIM”) as of the date published and are subject to change. Neither the writer nor PIM undertake to advise you of any changes in the views expressed therein. There is no guarantee that any projection, forecast, or opinion in this material has been or will be realized. Past performance is not indicative of future results. All investments involve risk, including risk of total loss.
Value investors buy stocks when investors are fearful and where pessimism is already reflected in valuations, but the long-term earnings potential is not recognized.
VALUATION EXTREMES AND RARE OPPORTUNITIES
Investors seem to be chasing recent performance, flocking to growth and so-called safety shares despite their high valuations that we view as unsustainable given the current trajectory of earnings. In contrast, cyclical shares have been shunned, remaining undervalued throughout the past market cycle, and are now priced at recessionary levels. The improved fundamentals and positive earnings trajectory of these companies, during the recovery, have not protected their stocks from being disproportionately weighed down by every negative news headline.
Dedicated value investors seize on opportunities to pick stocks when pessimism is already priced in, but earnings potential is not yet recognized. We believe the world is facing one of those rare points when fear has reached an extreme, and a tremendous number of overlooked but good companies are available at fire-sale prices.
A WORLD AT RARE EXTREMES
Amid rising macroeconomic uncertainty, investors’ commitment to near-term favorites alongside the dismissal so many others has created wide valuation dispersions.1 Figure 1 illustrates that today’s polarization, based on price-to-book (P/B) measures, has spiked to over three standard deviations from the mean. This extreme level surpasses 99% of the monthly observations in the 45-year history of our global data.
Figure 1: Dispersions are Approaching those of the Internet Bubble
DEVELOPED WORLD VALUATION DISPERSION BETWEEN CHEAPEST AND MOST EXPENSIVE STOCKS
Data through June 2019. Source: Sanford C. Bernstein & Co., Pzena analysis
Dispersion based on price to book; equally-weighted data
Universe is the largest ~1,600 stocks by market capitalization in developed world
Based on our proprietary estimates of price-to-normalized earnings (P/N), we see stocks in the cheapest quintile trading at 50% discounts to median valuations across the global universe.2 Within our own portfolios, the spreads between our median P/Ns and those of their respective universes are very attractive, and in many cases, they are as wide as other periods of extreme market stress such as in 2008, 2011, or 2016.
Today, growth’s dominance over value has reached an extreme not seen since the peak of the internet bubble. Given the extent of the current dislocation, and the long drought in value investing, it’s easy to forget that value stocks have traditionally outperformed over the long term. Moreover, this outperformance has corresponded with times of wide dispersion in valuations.
THE GROWING COST OF HIGH-PRICED STOCKS
During the current cycle, investors have paid up for the promise of growth in an attempt to improve returns amid the most tepid recovery of any in the US post-war era.i
Stocks in the highest valuation quintile of the US universe have largely raised the multiple for the broad index during this cycle, as implied in Figure 2. While the stocks within the cheapest quintile performed positively this cycle, they lagged the broader market. As a result, their valuations never rerated after the GFC, moving from a lowly 6x earnings in 2009 to just 8x today. Meanwhile, the more expensive stocks started the period at an already high price to earnings (P/E) of 29x in 2009 but have grown to an excess of 80x today. What’s resulted is the largest dispersion in valuations in the 68-year history of the data — a distortion that we argue is not sustainable.
Figure 2: The Most Highly Valued Stocks Have Led the Market Higher
RECORD VALUATION DISPERSION
Source: National Bureau of Economic Research, Sanford C. Bernstein & Co., Pzena analysis
The lines show the market-cap weighted trailing P/E ratios for the most expensive and cheapest quintiles of the US market. Data is from 1951 through 2018
Universe is the largest ~1,500 US stocks ranked by market capitalization
Today’s valuation is higher than the level reached by a similar segment of expensive US stocks in the heyday of the dot-com bubble. Substantial growth is necessary to warrant these lofty valuations, and while a few remarkable companies may be able to achieve this feat, the vast majority won’t.
Starting points are critical to investment returns — and purchasing the most expensive shares in today’s market may do more to destroy wealth than protect it.
STABILITY AT THE COST OF GROWTH
The more defensive investors have been moving into stocks that they view as stable, and they’ve been willing to pay a premium for the privilege. Low-volatility shares within the MSCI ACWI Index, for instance, are trading at an aggregate P/E of 18.9x,i slightly higher than that of the MSCI’s broad ACWI Growth Index.4, ii Is it sensible that low-volatility shares have a multiple that’s on par with growth stocks without the possibility of much earnings growth?
Meanwhile, compared to value shares, trading at a P/E of 7.2x, low-volatility stocks globally are trading at premiums not seen since the Asian Financial Crisis (according to Figure 3). In the US, this spread has reached a further extreme with low volatility trading at an all-time high versus value.3,i
Figure 3: Low-volatility Stocks are Expensive Versus Value Shares
Source: Courtesy J.P. Morgan Chase & Co., Copyright 2017
Data from 1993 through May 2019
Value is defined as the combination of P/E, P/B and P/S. Low volatility is based on realized 1-year volatility.
The desire for safety is proving greater during this cycle than previously, but if investors are buying low-volatility at high valuations, they may be exposing themselves to more risk than they bargained for — and downside protection could fail just when they need it most.
VALUATION SHOULD ALWAYS BE LINKED TO EARNINGS POWER
The large number of dislocations in today’s market has some investors asking, “Is this time different?” We noted how much the returns of the high flyers have exceeded their peers during this cycle. Although some of the explanation for this outperformance is due to their stronger profitability this cycle, we believe the most optimistic scenarios are already priced into these stocks. (When positive outcomes are already embedded in share prices, investors take on undue risk.)
Meanwhile, among the stocks that were hit the hardest in the prior recession (consider financials this time), profitability normalization hasn’t been much different from last time. Figure 4 illustrates this point in comparing companies that started in the bottom (10th) decile of profitability based on return on equity (ROE). During both the current cycle (2008 – 2018) and the last one (1997 – 2007), approximately 70% of the stocks that were hardest hit were able to raise their profitability to the average level of their peers within three years.
Figure 4: Businesses with Lower Profitability Catch Up to Peers
MEAN REVERSION OF LOW ROE STOCKS IN S&P 500
Source: Courtesy J.P. Morgan Chase & Co., Copyright 2017
This demonstrates on a broad level what we witness in every cycle with companies facing temporary pain. A business will enact self-help to repair earnings rather than enduring a subpar ROE and falling behind the competition. From an operational standpoint, we don’t believe this time is different. What’s different is the disconnect between valuations and earnings for these companies. After demonstrating the ability to improve earnings at a typical pace, valuations should follow earnings.
In this period, when extreme macro-related headlines are overshadowing all else, we continue to concentrate on the substance of the business. Benjamin Graham once said, “In the short run the market is a voting machine, but in the long run it is a weighing machine.” Ultimately, it’s the market’s fear and indiscriminate reactions without focusing on a company’s fundamentals that create value opportunities.
CONCLUSION
Today’s market offers a wide range of stocks that are trading in deep-value territory, while so many others in the broader markets are priced well above their long-term averages. Value investors buy stocks when the markets are fearful and where pessimism is already reflected in valuations, but the long-term earnings potential is not.
The combination of broad-based valuations, the late stage of the economic cycle, and a host of exogenous threats increase the likelihood that the next five years will post lower stock market returns than the last five years. The likelihood that global market extremes indicate that an inflection point is near underscores the importance of selectivity and a research-driven process that can uncover opportunities without paying a high price.
We invite investors to exploit today’s valuation anomalies, rather than attempting to predict what near-term event will happen next. The current market provides investors rare, significant opportunities to buy good businesses at deep discounts that may have encountered significant issues but are clawing their way back.
ENDNOTES
DISCLOSURES
These presentation materials are intended for the exclusive purpose of evaluating the investment advisory services of Pzena Investment Management, LLC (“PIM”). PIM is located at 320 Park Avenue, 8th Floor, New York, NY 10022 and is an investment adviser registered with the U.S. Securities and Exchange Commission. Any other use is strictly prohibited.
Past performance is not indicative of future results. All investments involve risk, including risk of total loss.
The specific portfolio securities discussed in this material are included for illustrative purposes only and were selected based on their ability to help you better understand our investment process. They do not represent all of the securities purchased or sold by PIM during the period. There is no assurance that any securities discussed herein remain in our portfolios at the time you receive this presentation or that securities sold have not been repurchased. PIM is a discretionary investment manager and does not make “recommendations” to buy or sell any securities.
This document does not constitute an offer to sell, or a solicitation of an offer to buy, securities or investment advisory services in any jurisdiction where such an offer or solicitation is against the law, or to anyone to whom it is unlawful to make such an offer or solicitation, or if the person making the offer or solicitation is not qualified to do so. The information contained herein is general in nature and does not constitute legal, tax, or investment advice. Prospective investors are encouraged to consult their own professional advisers as to the implications of making an investment in any securities or investment advisory services.
For European Investors Only:
This financial promotion is issued by Pzena Investment Management, Ltd. Pzena Investment Management, Ltd. is a limited company registered in England and Wales with registered number 09380422, and its registered office is at Dashwood House, 69 Old Broad Street, London EC2M 1QS, United Kingdom. Pzena Investment Management, Ltd is an appointed representative of DMS Capital Solutions (UK) Limited and Mirabella Advisers LLP, which are authorised and regulated by the Financial Conduct Authority. The Pzena documents are only made available to professional clients and eligible counterparties as defined by the FCA. Past performance is not indicative of future results. The value of your investment may go down as well as up, and you may not receive upon redemption the full amount of your original investment. The views and statements contained herein are those of Pzena Investment Management, LLC and are based on internal research.
For Australia and New Zealand Investors Only:
This document has been prepared and issued by Pzena Investment Management, LLC (ARBN 108 743 415), a limited liability company (“PIM”). PIM is regulated by the Securities and Exchange Commission (SEC) under U.S. laws, which differ from Australian laws. PIM is exempt from the requirement to hold an Australian financial services license in Australia in accordance with ASIC Corporations (Repeal and Transitional) Instrument 2016/396. PIM offers financial services in Australia to ‘wholesale clients’ only pursuant to that exemption. This document is not intended to be distributed or passed on, directly or indirectly, to any other class of persons in Australia.
In New Zealand, any offer is limited to ‘wholesale investors’ within the meaning of clause 3(2) of Schedule 1 of the Financial Markets Conduct Act 2013 (‘FMCA’). This document is not to be treated as an offer, and is not capable of acceptance by, any person in New Zealand who is not a Wholesale Investor.
For Jersey Investors Only:
Consent under the Control of Borrowing (Jersey) Order 1958 (the “COBO” Order) has not been obtained for the circulation of this document. Accordingly, the offer that is the subject of this document may only be made in Jersey where the offer is valid in the United Kingdom or Guernsey and is circulated in Jersey only to persons similar to those to whom, and in a manner similar to that in which, it is for the time being circulated in the United Kingdom, or Guernsey, as the case may be. The directors may, but are not obliged to, apply for such consent in the future. The services and/or products discussed herein are only suitable for sophisticated investors who understand the risks involved. Neither Pzena Investment Management, Ltd. nor Pzena Investment Management, LLC nor the activities of any functionary with regard to either Pzena Investment Management, Ltd. or Pzena Investment Management, LLC are subject to the provisions of the Financial Services (Jersey) Law 1998.
Institutional Investors - Important Legal Acknowledgement
The information on this website is intended for institutional investors and consultants to institutional investors. It is published for informational purposes only and does not purport to address the financial objectives, situation or specific needs of any investor. If you do not qualify as an institutional investor or consultant, the information shown on this site may not be relevant or appropriate for you.
For UK Investors Only:
The information on this website is intended only for professional clients and eligible counterparties as defined by the Financial Conduct Authority (FCA) and should not be relied upon by other persons, such as Retail Clients, as outlined under the FCA’s Rules. The definitions can be found on the FCA website at www.fca.org.uk . Pzena Investment Management, Ltd. (“PIM UK”) is a limited company registered in England and Wales with registered number 09380422, and its registered office is at 34-37 Liverpool Street, London EC2M 7PP, United Kingdom. PIM UK is an appointed representative of Vittoria & Partners LLP (FRN 709710), which is authorised and regulated by the FCA. Past performance is not indicative of future results. The value of your investment may go down as well as up, and you may not receive upon redemption the full amount of your original investment. The views and statements contained herein are those of Pzena Investment Management and are based on internal research.
For Switzerland Investors Only:
In Switzerland, the information on this website is intended only for qualified investors according to art. 10 para. 3 and 3ter CISA
Investment Professionals - Important Legal Acknowledgement
The information on this website is intended for institutional investors and consultants to institutional investors. It is published for informational purposes only and does not purport to address the financial objectives, situation or specific needs of any investor. If you do not qualify as an institutional investor or consultant, the information shown on this site may not be relevant or appropriate for you.
For UK Investors Only:
The information on this website is intended only for professional clients and eligible counterparties as defined by the Financial Conduct Authority (FCA) and should not be relied upon by other persons, such as Retail Clients, as outlined under the FCA’s Rules. The definitions can be found on the FCA website at www.fca.org.uk . Pzena Investment Management, Ltd. (“PIM UK”) is a limited company registered in England and Wales with registered number 09380422, and its registered office is at 34-37 Liverpool Street, London EC2M 7PP, United Kingdom. PIM UK is an appointed representative of Vittoria & Partners LLP (FRN 709710), which is authorised and regulated by the FCA. Past performance is not indicative of future results. The value of your investment may go down as well as up, and you may not receive upon redemption the full amount of your original investment. The views and statements contained herein are those of Pzena Investment Management and are based on internal research.
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In Switzerland, the information on this website is intended only for qualified investors according to art. 10 para. 3 and 3ter CISA
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Andrew Chung, CFA
Principal and Senior Research Analyst
Mr. Chung became a member of the firm in 2014. Prior to joining Pzena Investment Management, Mr. Chung was a senior associate at Dodge & Cox and began his career as a research associate at Sanford C. Bernstein. He earned a B.S.E. summa cum laude in Finance and a B.A.S. in Computer Science from the University of Pennsylvania. Mr. Chung holds the Chartered Financial Analyst designation.
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