Richard Pzena Drilling Deep for ValueVW Staff
Nice interview with Richard Pzena in this week’s Barron’s – a small except below
Richard Pzena isn’t afraid of taking risks. Since Its founding in 1996, his Pzena Investment Management, Inc. (NYSE:PZN) has pursued a deep-value, concentrated portfolio strategy that has sometimes led to volatile returns. The John Hancock Classic Value Fund Class A (MUTF:PZFVX), which is managed by the firm, had a great 2013, rising 40.5%, eight percentage points ahead of the Standard & Poor’s 500 index. But the fund was crunched in 2008, dropping 46.6%, nine percentage points worse than the index. Through the middle of last week, the fund was up 7.8% in 2014, two points behind the S&P 500.
The firm managed $26.4 billion for institutions and retail investors at the end of July. Shares of the company (PZN) have had a wild ride after its 2007 initial public offering at $18. The stock dropped below $2 in 2009 and has since rallied to $10. In addition to the Hancock fund, Pzena manages 30% of the $18 billion Vanguard Windsor fund (VWNDX), and this year started three funds, Pzena Mid Cap Focused Value Fund Investor Class (MUTF:PZVMX), Pzena Long/Short Value Fund Investor Class (MUTF:PZVLX), and Pzena Emerging Markets Focused Value Fund Investor Class (MUTF:PZVEX).
Pzena talked with Barron’s recently at his Manhattan office. He views big banks, such as Citigroup Inc (NYSE:C) and Bank of America Corp (NYSE:BAC), as among the best values in the stock market. He’s also bullish on international oil outfits, including BP plc (ADR) (NYSE:BP) and Royal Dutch Shell plc (ADR) (NYSE:RDS.A).
Barron’s: How would you describe your approach?