Pzena Investment Management is a New York City-based investment management company. The fee-only firm, which has additional offices in London and Melbourne, manages tens of billions of dollars in client assets.
The advisor isn’t for small-time investors, as it has requires a steep minimum investment to open an account. While the firm does have some clients who do not qualify as high-net-worth, the vast majority of the individuals that the firm advises do fall into this category.
Pzena Investment Management Background
Pzena Investment Management was founded in 1995 by Richard S. Pzena, and began officially managing assets on Jan. 1, 1996. Pzena remains the firm’s the principal owner and also serves as CEO, co-chief investment officer and a managing principal. The sole managing member of the firm is Pzena Investment Management, Inc., which is a company listed on the New York Stock Exchange.
Pzena prides itself on the fact that all of its investment professionals make investment decisions, rather than sticking to the role of research analysts or portfolio managers. Because of this set-up, everyone at the firm works together to make investment decisions for client portfolios.
Speaking of the Pzena team, the firm has 11 chartered financial analysts (CFAs) on staff, as well as two certified public accountants (CPAs).
Pzena Investment Management Clien Types and Minimum Account Sizes
Pzena Investment Management’s steep account minimum of $10 million means that it’s a good fit for investors with a high level of investable assets. Though the firm does occasionally make exceptions to its required minimum, the firm likely won’t be a good fit for small-time investors or those who are just getting started. Still, the firm’s current client base does include a handful of individual investors without a high net worth.
The firm also does business with a number of institutional clients, as it effectively splits its focus between individuals and institutions. Its institutional clients include investment companies, pooled investment vehicles, pension and profit-sharing plans, charitable organizations, state or municipal government entities, other investment advisors, insurance companies, sovereign wealth funds and corporations.
While the firm may make exceptions to its $10 million minimum, clients should note that the accounts with assets below the $10 million mark will be charged higher fees.
Services Offered by Pzena Investment Management
Investment management is the major focus of Pzena Investment Management. It offers a variety of portfolio management options, and provides investment advice on equities, including exchange-traded funds (ETFs), securities traded over-the-counter and foreign issues.
The firm also offers frequent white papers and insights into economic topics. It also hosts webinars in which it discusses investment strategies and economic trends.
Pzena Investment Management Investment Philosophy
Pzena adheres to a classic value investment philosophy and seeks to invest in companies that are underperforming based on their historical outcomes. The firm specifically looks for companies that have earnings that are lower than usual, but which have a management team that has a clear plan to put the company back on course.
The firm believes it can create returns for investors by being patient with companies that are currently struggling but show signs of being able to rebound. Generally, Pzena invests in industries with histories of long-term earnings success.
Pzena offers clients the choice of 20 investing strategies. They are:
- Global Focused Value
- Global Value
- Global Value All Country
- Global Best Ideas
- International Focused Value
- International Value
- International Value All Country (ex-U.S.)
- International Small Cap Focused Value
- European Focused Value
- Japan Focused Value
- Emerging Markets Focused Value
- Emerging Markets Select Value
- Large Cap Focused Value
- Large Cap Value
- Focused Value
- Mid Cap Focused Value
- Mid Cap Value
- Small Cap Focused Value
- U.S. Best Ideas
- Long/Short Value
Fees Under Pzena Investment Management
Pzena charges asset-based fees, meaning that it charges clients charged based on how much money the firm is managing for the client. The rate you pay will be based on both the investment strategy you choose and how much you have invested in that strategy. Here is how the fees stack up for different strategies:
- Global Focused Value: 0.55% to 1.0%
- Global Value: 0.35% to 0.55%
- Global Value All Country: 0.37% to 0.57%
- Global Best Ideas: 1.25%
- International Focused Value: 0.50% to 0.75%
- International Value: 0.35% to 0.55%
- International Value All Country (ex-U.S.): 0.40% to 0.60%
- International Small Cap Focused Value: 0.85% to 1.00%
- European Focused Value: 0.45% to 0.65%
- Japan Focused Value: 0.60% to 0.80%
- Emerging Markets Focused Value: 0.70% to 1.00%
- Emerging Markets Select Value: 0.55% to 0.70%
- Large Cap Focused Value: 0.35% to 0.70% (1.00% for accounts with under $10 million)
- Large Cap Value: 0.25% to 0.40%
- Focused Value: 0.50% to 1.00% (1.50% for accounts with under $10 million)
- Mid Cap Focused Value: 0.50% to 1.00% (1.50% for accounts with under $10 million)
- Mid Cap Value: 0.35% to 0.45%
- Small Cap Focused Value: 0.75% to 1.00% (1.50% for accounts with under $10 million)
- U.S. Best Ideas: 1.25%
- Long/Short Value: 1.50%
Notably, Pzenza’s fees are not negotiable. In some circumstances, Pzena offers performance-based fee arrangements.
What to Watch Out For
Pzena does not have any disclosures of legal or regulatory violations on its record for the past 10 years.
As noted above, Pzena is a firm that works with a mix of individual investors and institutional clients. If you want a firm that focuses only on individual investors, you’ll probably want to find a firm that has a different focus. Pzena also does not offer financial planning. If you’re looking for a firm that can help you with retirement planning, budgeting or saving for education needs, let SmartAsset help you find an advisor who offers financial planning.
Potential and current clients should also note that Pzena may charge performance-based fees in certain instances. This can create a potential conflict of interest, as it may incentivize the advisor to take greater risks in an effort to boost returns.
How to Open an Account With Pzena Investment Management
Pzena does not have an online system for opening an account. To set up an appointment, your best bet is to call the financial advisors line at (646) 344-8473.
Financial Planning Tips
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