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Pzena Investment Management Review

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Pzena Investment Management

Pzena Investment Management is a New York City-based investment management company. The firm, which has additional offices in London and  Melbourne, has $37.7 billion in assets under management. It has 43 financial advisors on staff. 

The advisor isn’t for small-time investors, as it has requires a steep minimum investment of $10 million to open an account. Though 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 also advises a wide range of institutional clients.

Pzena Investment Management Background

Pzena Investment Management was founded in 1995 by Richard S. Pzena, and began officially managing assets on January 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 analyst or portfolio manager. Because of this set-up, everyone at the firm works together to make investment decisions for client portfolios.

What Types of Clients Does Pzena Investment Management Accept?

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.

Pzena Investment Management Minimum Account Sizes

Pzena requires a fairly firm minimum account size of $10 million for all accounts. Though the firm  may make exceptions at its discretion, 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.

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 looks 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 15 investing strategies. They are:

  1. Large Cap Focused Value 
  2. Focused Value 
  3. Small Cap Focused Value 
  4. Mid Cap Focused Value 
  5. U.S. Best Ideas 
  6. Long/Short Value 
  7. Global Focused Value 
  8. Emerging Markets Focused Value 
  9. International Focused Value 
  10. European Focused Value 
  11. Large Cap Value 
  12. Mid Cap Value 
  13. International Value 
  14. International Value All Country (Ex-U.S.) 
  15. Global 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:

  • Large Cap Focused Value: 0.35% to 0.70% (1.0% for accounts under the $10,000,000 minimum)
  • Focused Value: 0.50% to 1.0% (1.5% for accounts under the $10,000,000 minimum)
  • Small Cap Focused Value: 1.0% (1.5% for accounts under the $10,000,000 minimum)
  • Mid Cap Focused Value: 0.50% to 1.0% (1.5% for accounts under the $10,000,000 minimum)
  • U.S. Best Ideas: 1.0% 
  • Long/Short Value: 1.5%
  • Global Focused Value: 0.55% to 1.0%
  • Emerging Markets Focused Value: 0.70% to 1.0%
  • International Focused Value: 0.50% to 0.75%
  • European Focused Value: 0.40% to 0.75%
  • Large Cap Value: 0.28% to 0.50%
  • Mid Cap Value: 0.40% to 0.50%
  • International Value: 0.35% to 0.55%
  • International Value All Country (ex-U.S.): 0.50% to 0.60%
  • Global Value: 0.35% to 0.55%

Notably, Pzenza’s fees are not negotiable. In some circumstances, Pzena offers performance-based fee arrangements.

What to Watch Out For

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. Similarly, if you’re looking for a firm that has a traditional structure where some employees are designated as portfolio managers and others are designated research analysts, Pzena doesn’t offer what you are looking for. 

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.

Disclosures

Pzena does not have any disclosures on its record for the past 10 years.

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 +1 (646) 344-8473.

Where Is Pzena Investment Management Located?

The firm has its headquarters in New York City. Its Manhattan office is located on Park Avenue between East 50th Street and East 51st Street. The firm also has offices located in Melbourne, Australia and London.

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How Many Years $1 Million Lasts in Retirement

SmartAsset's interactive map highlights places where $1 million will last the longest in retirement. Zoom between states and the national map to see the top spots in each region. Also, scroll over any city to learn about the cost of living in retirement for that location.

Least
Most
Rank City Housing Expenses Food Expenses Healthcare Expenses Utilities Expenses Transportation Expenses

Methodology To determine how long a $1 million nest egg would cover retirement costs in cities across America, we analyzed data on average expenditures for seniors, cost of living and investment returns.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors. We then applied cost of living data from the Council for Community and Economic Research to adjust those national average spending levels based on the costs of each expense category (housing, food, healthcare, utilities, transportation and other) in each city. Using this data, SmartAsset calculated the average cost of living for retirees in the largest U.S. cities.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%. This reflects the typical return on a conservative investment portfolio. Then, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would cover retirement expenses in each of the cities in our study. Cities where $1 million lasted the longest ranked the highest in the study.

Sources: Bureau of Labor Statistics (BLS), Council for Community and Economic Research