3. Bennett Lawrence Management, LLC (BLM) is a 100% employee owned registered
investment advisor, focused solely on domestic growth stock investments dedicated
to building clients’ wealth through fundamental research with superior client service.
Bennett Lawrence Management, LLC
$562 million1
– assets under management
Traditional Investment Strategies
All Cap Growth Equity
Midcap Growth Equity
Small Cap Growth Equity
1. Preliminary as of March 31, 2013 (in US$).
Firm Overview
Long / Short Strategies
Absolute Return
All Cap Growth Equity
(Domestic and Offshore)
Small Cap Growth Equity
4. The Bennett Lawrence Investment Team
Average Industry Experience
22 Years
Average Tenure at BLM
10 Years
Investment Professional Function Industry Experience Credentials
Van Schreiber
Chief Portfolio Manager
Managing Member
48 years
MBA, New York University
BS, Williams College
W. Alexander Ely
Portfolio Manager
Member
21 years BA, University of New Hampshire
Dina Pliotis
Consumer Analyst
Member
25 years
MBA, New York University
BS, Union College
Nathan A. Mahrer, CFA
Technology Analyst
Member
19 years
MBA, George Washington University
BS, Colorado School of Mines
Jason P. Gupta
Health Care Analyst
Member
10 years
MBA, The Wharton School
BA, University of Michigan
Amy Zhang
Industrial, Energy &
Basic Materials Analyst
11 years
MA, Dartmouth College
BA, Fudan University
6. Investment Philosophy
Earnings growth drives stock prices.
We believe that identifying major demand trends early
and investing in competitively advantaged companies
benefiting from these trends, will allow us to achieve our
objective of long-term capital appreciation.
7. Investment Process
General
Economic
Outlook
Identify
Dynamic
Themes
Invest in
Competitively
Advantaged
Companies
Manage Risk
Develop expectations
for economic growth,
inflation, interest rates
and overall U.S.
corporate profit growth
Establish minimum
earnings growth rate for
portfolios
Thematic investment
approach that is fully
adaptable
Identify at an early stage,
major demands trends
that are creating powerful
investment opportunities
First Mover Advantage
New Product Capability
Leading Industry Position
Strong Management Team
Healthy Financial Condition
Analyze stock, sector and
portfolio exposure
Comprehensive review of
benchmark and factor risk
8. Portfolio Management
Summary
Growth
Approximately 40 securities
Sector exposure limited to high growth segments of the market
Client-specific preferences reflected within portfolios
Sector diversification, strict selection and sell disciplines, robust factor
and comparative benchmark analysis
Individual positions are thoroughly analyzed by at least two investment
professionals before being added to the universe
Positions are generally trimmed if they appreciate to 6% of total portfolio
Decline of 15% from cost triggers a position review
Limited discovery potential
Competitors disappoint
Change in company fundamentals
Investment Style
Portfolio Structure
Risk Management
Company Selection
Sell Discipline
9. Risk Management
Factor Analysis Comparative Benchmark Analysis
Sophisticated software for factor analysis:
– Momentum
– Beta
– Volatility
– Growth
Momentum is generally our largest factor risk:
– Utilize Axioma risk model to:
• Optimize entry points
• Highlight extended positions
• Identify correlated risks
• Assist in navigating turns in the market
Portfolio characteristics versus benchmark:
– Valuation
– Beta
– Momentum
– Quality (ROE)
Benchmark performance attribution:
– Top/bottom performing benchmark holdings
(weighted & un-weighted)
– Top/bottom performing industry/sector groups
– Factor attribution related to benchmark performance
Portfolio weightings versus benchmark:
– Industry/sector comparison
– Top weightings per sector
10. Why Bennett Lawrence?
Firm:
– Established in 1995
– Senior management team, founders of BLM, in place over 15 years
– Central investment philosophy utilized for over 25 years (strategy employed since 1987)
Resources:
– Over 20 years’ average experience among team of 6 seasoned investment professionals
– Significant internal research capabilities:
• Uncover unique, high growth investment opportunities by conducting our own primary
research
• Field work, channel checks, surveys, industry conferences, one-on-one meetings, Wall
Street analysts and industry experts
– Robust risk management procedures
Incentives:
– Employee ownership allows for teamwork, accountability and succession
– Investment team is compensated to make sound investment decisions for clients
– Organization is focused solely on domestic growth stock investments
12. S&P 500 yield is greater than 10-year treasury yield
Allocations to equities are at historic lows
Massive amounts of liquidity
Interest rates are at ultra low levels
Decrease in Systematic Risk:
Unemployment stabilizing
Housing and autos are recovering
China growth rates improving
Europe stabilizing
Constructive Outlook for Equity Markets
13. Equipment
&
Machinery
Specialty Retail
Big Ticket Items
Software as a Service
Exploration
&
Production
Biotechnology
Pharmaceuticals
Housing
Technology
Investment Trends & Themes
Linking Exciting Growth Opportunities
Energy & Efficiency
Capital Spending Health Care
Housing & Related
The above information is preliminary as of 3/31/13 and based on the All Cap Growth Composite.
Big Ticket & Specialty Retail
14. Cyclical Growth: Move from Preservation to Appreciation
Massive amounts of Pent up Demand
Corporations and Governments have
improved balance sheets and are beginning
to reinvest capital:
- Pent up demand for replacement projects
- Increased infrastructure spending
- Rebounding industrial demand
Examples:
- Equipment and machinery
Individuals are purchasing things they want
vs. things they need
- Increased economic visibility and decreased
systematic risk
- Increase in consumer confidence and spending
- Shift in consumer buying behavior:
- 2008 to 2009: Staples
- 2010 to 2011: Retail
- 2012 to 2013: Big ticket items
Examples:
- New homes / home improvements
- Cars, Boats, Motorcycles
15. Secular Growth: Innovation Creating Opportunity
Software as a Service
- Shift from users seeking data from the internet to
companies using the internet to find data about its
users
- Cloud Computing: Increased need for storage,
security, processing and manipulation of data
- Companies seeking to monetize viewership
- Continued increase in wireless users
- Shift to smart devices (phones and tablets)
resulting in a need for stronger network capabilities
Biotechnology:
- Investment in late stage companies providing a
service or a drug meeting a previously unmet ne
- We seek companies with:
- Massive markets
- Proven data
- Premier product(s) already introduced in the
market
- Seeking to capitalize on peak revenues of premier
product(s) of such companies
- Decrease in systematic risk should compound
growth multiples
16. 15.8
7.1
16.7
6.4
4.0
14.7
6.0
15.6
9.8
10.4
13.2
7.4
9.1
6.7
5.0
0
2
4
6
8
10
12
14
16
18
YTD 1 year 3 year 5 year Since Inception*
Return (%)
BLM All Cap Grow th Composite (gross of fees) BLMAll Cap Grow th Composite (net of fees) Russell 3000 Grow th Index
Historical Performance vs. Russell 3000 Growth
All Cap Growth Composite1
1. Preliminary as of 3/31/13. Performance for periods greater than 1 year is annualized.
*Performance inception 1/1/87.
The information contained on this page is supplemental to the GIPS compliant composite
contained on the final pages of this presentation..
17. BLM All Cap Growth Composite vs. Russell 3000 Growth Index
Sector weightings and top 10 holdings
Security Sector
% Net
Assets1
Amphenol Corporation Information Technology 4.47
Brunswick Corporation Consumer Discretionary 3.89
Mohawk Industries, Inc. Consumer Discretionary 3.85
HCA Holdings, Inc. Health Care 3.65
Cummins Inc. Industrials 3.53
Oasis Petroleum Inc. Energy 3.45
Toll Brothers Inc. Consumer Discretionary 3.31
Range Resources Corporation Energy 3.19
Pharmacyclics, Inc. Health Care 3.16
Ryland Group, Inc. Consumer Discretionary 3.13
Total 35.62
BLM All Cap Growth Composite1
vs. Russell 3000 Growth Index
Information
Technology
BLM All Cap 25.9%
Russell 3000 28.4%
Financials
BLM All Cap 7.7%
Russell 3000 5.1%
Energy
BLM All Cap 8.5%
Russell 3000 4.3%
Healthcare
BLM All Cap 16.3%
Russell 3000 13.4%
Cash
BLM All Cap 3.7%
Industrials
BLM All Cap 15.4%
Russell 3000 13.4%
Consumer
Discretionary
BLM All Cap 20.3%
Russell 3000 16.8%
Telecomm Services
BLM All Cap 2.3%
Russell 3000 2.2%
1. Preliminary as of 3/31/13.
The information contained on this page is supplemental to the GIPS compliant composite
contained on the final pages of this presentation.
Russell 3000 Growth Index sectors in which BLM had no weighting are not shown.
18. BLM All Cap
Growth Composite1
Russell 3000
Growth Index
P/E 2013 (ex-neg)2
26.9x 16.8x
2013/2012 EPS Growth Rate2
34.4% 9.3%
2013 PEG Ratio 0.78 1.81
Weighted Avg. Market Cap $13,747 MM $87,450 MM
Median Market Cap $6,332 MM $1,324 MM
1. Preliminary as of 3/31/13. Inception 1/1/87.
2. EPS Growth and P/E figures are weighted.
3. Annualized.
The information contained on this page is supplemental to the GIPS compliant composite
contained on the final pages of this presentation.
BLM All Cap
Growth Composite
(3-Year)1
Russell 3000
Growth Index
Alpha 1.47 -
Beta 1.10 1.00
R-Squared 0.90 1.00
Sharpe Ratio3
0.73 0.71
Standard Deviation3
21.41 18.39
BLM All Cap Growth Composite vs. Russell 3000 Growth Index
Portfolio Characteristics
19. BLM All Cap Growth Composite
Peer Group Rankings
Source: PSN Enterprise
BENNETT LAWRENCE ALL CAP GROWTH
QUARTILE RANKING BAR
PSN ALL CAP GROWTH
PERIODS ENDING MARCH 31, 2013
-5
0
5
10
15
20
25
30
RATEOFRETURN
3/2012-3/2013 3/2010-3/2013 3/2008-3/2013 12/1986-3/2013
HIGH (0.05) 21.34 18.26 11.97 13.06
FIRST QUARTILE 12.50 15.06 8.81 13.06
MEDIAN 9.04 12.70 7.58 11.58
THIRD QUARTILE 6.29 10.76 6.09 11.39
LOW (0.95) 0.59 5.39 1.38 11.34
MEAN 9.26 12.70 7.05 11.84
VALID COUNT 73 69 61 4
Bennett Lawrence All Cap Growth
Russell 3000 Growth
3/2012-3/2013 3/2010-3/2013 3/2008-3/2013 12/1986-3/2013
VALUE RANK VALUE RANK VALUE RANK VALUE RANK
5.01 83 15.82 15 7.08 57 16.73 1
10.42 38 13.19 44 7.44 52 9.08 99
21. Bennett Lawrence All Cap Growth Composite
*Performance returns are preliminary as of March 31, 2013.
• Returns are time weighted. The All Cap Growth Composite includes all fully discretionary accounts under management. Figures are not audited and are subject to
change. Individual investor results will vary.
• For the period 1/87 to 3/93, the All Cap Growth Composite (the “Composite”) was comprised of one non-fee paying account. This account was the only account
under Van Schreiber’s management from 1987 through the third quarter of 1992. The All Cap Growth Composite figures for the period 1/87 to 8/95 reflect the
performance of assets managed exclusively by Van Schreiber while he was affiliated with Deutsche Morgan Grenfell/C.J. Lawrence Inc.
From 1/87 to 12/94 the limited use of leverage was employed in the non-fee paying account through the borrowing of money to finance purchases (margin) and the
selling of securities not owned (short selling). Over the period, average monthly (i) margin balances and (ii) short positions were each less than 5% of the portfolio
value. Leverage, which amplifies both gains and losses, is not employed in client portfolios and is not a part of the Growth Equity Strategy.
• Performance results are net of commissions paid on securities transactions and margin interest paid, and include dividends and interest earned.
• Net returns reflect the deduction from the gross returns of an annual 1% management fee charged on a quarterly basis, which represents the highest advisory fee.
Bennett Lawrence Management, LLC
• The information provided in this report should not be considered a recommendation to purchase or sell any particular security. There is no assurance that any of the
investments identified herein will remain in portfolios managed by Bennett Lawrence Management, LLC (BLM) or that information provided herein will remain the
same at the time you receive this report. The investments identified do not represent all of the investments purchased, sold or held by portfolios managed by BLM.
It should not be assumed that investments were or will be profitable.
• Portfolio characteristics are calculated by Bennett Lawrence Management, LLC, FactSet and PSN-Effron Enterprises, Inc.
Russell Russell 3000 Growth Index & S&P 500 Index
• The figures for the Russell Index and S&P 500 Index include dividends received and their reinvestment. The index returns do not, however, reflect any brokerage
commissions or management fees that might be incurred in actually investing in the securities representing these indexes. The Russell Investment Group is the
source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Russell Investment Group. Index
returns are calculated by the Frank Russell Company and Standard and Poor’s.
• An investor cannot directly invest in an index.
PSN Universe
• The PSN universe is comprised of a group of composites/products with a similar investment objective. Performance is calculated by PSN. Performance is gross of
fees. Gross returns do not reflect the deduction of investment advisory fees. The deduction of such fees or other expenses will reduce a client’s return.
Disclosures
Past performance is not a guarantee of future results.
23. All Cap Growth Composite ("Composite") contains fully discretionary all cap growth accounts and for comparison purposes is measured against the Russell 3000 Growth Index.
Bennett Lawrence Management, LLC (BLM) claims compliance with the Global Investment Performance Standards (GIPS®
) and has prepared and presented this report in compliance with
the GIPS standards. BLM has been independently verified for the periods October 1, 1997 through December 31, 2007 by Ashland Partners & Company LLP.
Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures
are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation. The Composite
has been examined for the periods October 1, 1997 through December 31, 2007. The verification and performance examination reports are available upon request.
BLM is an independent investment adviser registered under the Investment Advisers Act of 1940. The Growth Equity Composite was created October 1995 and the name changed January 1,
2011 to the All Cap Growth Composite. A list of composite descriptions is available upon request.
Effective January 1, 2011, the benchmark was changed from the Russell Midcap Growth Index to the Russell 3000 Growth Index. The Russell 3000 Growth Index measures the performance
of the broad growth segment of the U.S. equity universe. It includes those Russell 3000 companies with higher price-to-book ratios and higher forecasted growth values. The Russell 3000
Growth Index is constructed to provide a comprehensive, unbiased, and stable barometer of the broad growth market. This change was made to better reflect a broader range of market cap
exposure; as the Composite does not have defined market cap parameters.
Returns are based on fully discretionary accounts under management, including those accounts no longer with the firm. The U.S. Dollar is the currency used to express performance returns.
Returns are net of commissions on securities transactions and margin interest paid, and includes dividends and interest earned. Gross returns are gross of management fees paid. Net returns
reflect the deduction from the gross returns of an annual 1% management fee charged on a quarterly basis, which represents the highest advisory fee. The management fee schedule for the
strategy is 1% on the first $5 million and 0.75% thereafter and is charged on a quarterly basis. Actual management fees incurred by clients may vary. Past performance is not indicative of
future results.
Net of sponsor fee returns are calculated using an annual 1% sponsor fee, charged on a quarterly basis, which represents the highest sponsor fee provided. The sponsor fee is in addition to the
advisory fee. Sponsor fee accounts pay an all-inclusive fee to the sponsor based on a percentage of assets under management. Other than brokerage commissions, this fee may include
investment management, portfolio monitoring, consulting services, and in some cases, custodial services. Gross returns are supplemental for the periods that include sponsor accounts.
Sponsor fee schedules are provided by independent wrap sponsors and are available upon request from the respective wrap sponsor.
The annual composite dispersion presented is an asset-weighted standard deviation calculated for the accounts in the composite the entire year. Additional information regarding the policies
for calculating and reporting returns is available upon request.
The composite policy prior to January 1, 2011 required the temporary removal of any portfolio incurring a client initiated significant cash flow where there is a 50% or greater inflow or a
10% or greater outflow of the portfolio assets. The significant cash inflow or outflow generated multiple transactions that would not fully represent the strategy. The temporary removal of
such an account to a non-discretionary composite occurred at the beginning of the calendar quarter in which the significant cash flow occurs and the account re-entered the composite at the
beginning of the calendar quarter following a full calendar quarter after the cash flow. The composite policy now requires the temporary removal of any portfolio incurring a client initiated
significant cash flow where there is a 25% or greater inflow or outflow of the portfolio assets. The significant cash inflow or outflow would generate multiple transactions that would not fully
represent the strategy. The temporary removal of such an account to a non-discretionary composite occurs at the beginning of the calendar quarter in which the significant cash flow occurs
and the account re-enters the composite at the beginning of the calendar quarter following, at minimum, 30 calendar days after the cash flow. Additional information regarding the treatment
of significant cash flows is available upon request.
All Cap Growth Composite GIPS Compliant Presentation
Annual Disclosure
24. The investment performance statistics reflect the investment performance record of Mr. Suydam Van Zandt Schreiber as a portfolio manager. Mr. Schreiber is currently the Managing Member
and Chief Portfolio Manager of the growth equity discipline at BLM. Prior to forming BLM in August 1995, Mr. Schreiber created a growth equity investment discipline that he used to
manage portfolios while he was employed at Deutsche Morgan Grenfell/C.J. Lawrence, Inc. His strategy was marketed as “Premium Growth Equity,” and he was the only portfolio manager
responsible for investment decisions that affected this product. From January 1, 1987 to December 31, 1995 the Composite returns are based on the eligible portfolios under Mr. Schreiber’s
management that were also under Mr. Schreiber’s management at BLM for the entire fourth quarter of 1995. Composite portfolios, assets and performance from 1996 forward are based on all
eligible portfolios under BLM’s management.
For the period from January 1, 1987 to March 31, 1993, the Composite was comprised of one non-fee-paying account. This account was the only account under Mr. Schreiber’s management
from January 1, 1987 through September 30, 1992 and it was the only non-fee-paying account included in the composite from 1987 through 1996. Non-fee-paying account percentage from
1987 to 1992: 100%, 1993: 73%, 1994: 16%, 1995: 11% and 1996: 3%. No non-fee-paying accounts were included from 1997 forward.
In the period from January 1, 1987 to December 31, 1994, the limited use of leverage was employed in the one non-fee-paying account through the borrowing of money to finance purchases
(margin) and the selling of securities not owned (short selling). Over the period, average monthly (i) margin balances and (ii) short positions were each less than 5% of the portfolio value.
Leverage, which amplifies both gains and losses, is not employed in client portfolios and is not a part of the growth equity strategy.
The figures for the Russell 3000 Growth Index and the Russell Midcap Growth Index include dividends received and their timely reinvestment. The Index returns do not however, reflect any
brokerage commissions or management fees that might be incurred in actually investing in the securities representing these indexes. The Index returns are calculated by the Frank Russell
Company.
At December 31, 2011, the three-year annualized ex-post standard deviation of the Composite’s gross returns, the Russell 3000 Growth Index and the Russell Midcap Growth Index are 1.77%,
1.74% and 1.82%, respectively.
All Cap Growth Composite GIPS Compliant Presentation
Annual Disclosure
Hinweis der Redaktion
Outperformed the benchmark average for the Quarter, 3 year, 5 year and since inception time periods.
Outperformed the benchmark average for the Quarter, 3 year, 5 year and since inception time periods.
Outperformed the benchmark average for the Quarter, 3 year, 5 year and since inception time periods.