| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 7.3% | -0.1% | -0.1% |
Pzena's Global Small Cap Focused Value portfolio posted a modest 0.1% gross return but underperformed benchmarks during a challenging quarter marked by geopolitical tensions and energy shocks. Small caps were particularly pressured by shifting risk appetite. The portfolio experienced mixed sector performance, with industrials, consumer discretionary, and real estate detracting while materials, information technology, and financials contributed. Key detractors included staffing company Hays facing hiring demand pressure, luggage maker Samsonite hurt by travel concerns, and customer experience provider Concentrix impacted by AI disruption fears. Contributors included auto parts retailer Advance Auto Parts benefiting from turnaround progress and snowplow manufacturer Douglas Dynamics reporting strong winter demand. The manager initiated five new positions including UK discount retailer B&M and specialty chemicals company Evonik, while exiting three positions on valuation. The portfolio remains concentrated in cyclical businesses near earnings troughs, maintaining focus on companies with durable competitive advantages where valuations reflect excessive pessimism. The strategy continues targeting recovery opportunities despite macroeconomic uncertainty.
Focus on global small cap value opportunities in businesses at or near cyclical earnings troughs with durable competitive positions and clear paths to earnings normalization, where current valuations reflect excessive pessimism.
The portfolio remains concentrated in businesses at or near cyclical earnings troughs. While the macroeconomic backdrop remains uncertain, the manager continues to focus on companies with durable competitive positions and a clear path to earnings normalization, where valuations reflect excessive pessimism.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 28 2026 | 2026 Q1 | AAP, BME.L, CNXC, DNOW, DOUG, EVK.DE, HAS.L, MLKN, MMI, NVST, SAMSY, SPB, TATE.L, TEP.PA | Cyclical, global, Recovery, small caps, turnaround, value | - | Pzena's global small cap value strategy underperformed in Q1 amid geopolitical tensions and small cap weakness. The manager maintained focus on cyclical recovery plays, adding positions in turnaround stories like B&M retail and Evonik chemicals while trimming on valuation. Portfolio remains concentrated in businesses at earnings troughs with durable competitive positions trading at attractive valuations. |
| Jan 29 2026 | 2025 Q4 | 240810.KS, 9065.T, AAP, ADNT, BIRG.L, BPE.MI, MRC, NOKBF, RCO.PA, REZI, SCS, ST, TEP.PA, TPK.L, UMI.BR, UNI.MC, WGO | consumer discretionary, financials, global, small cap, underperformance, valuation, value |
KNX WGO |
Pzena's global small-cap value strategy underperformed in Q4 despite positive absolute returns, with consumer discretionary and industrials detracting while financials outperformed. The team initiated positions in Winnebago and Teleperformance at attractive valuations, while trimming appreciated positions. Small caps remain deeply undervalued relative to large caps, creating compelling opportunities for disciplined value investors. |
| Oct 24 2025 | 2025 Q3 | 1910.HK, AAP, HNI, RCO.PA, REZI, SCS, SNV, SPB, SXT, TFX, TYRES.HE, UMI.BR | Cyclical, global, Outperformance, small caps, tariffs, value |
RESI AAP SCS HAS ORION CNXN 1910 HK SNSA |
Pzena's global small cap value strategy outperformed in Q3 2025, driven by undervalued cyclical positions and Fed rate cut expectations. Strong contributors included Resideo's corporate actions and Advance Auto's operational progress, while tariff uncertainty pressured some holdings. New positions in Samsonite, Remy Cointreau, and Sensata reflect continued focus on attractive valuations amid market dislocations. |
| Aug 25 2025 | 2025 Q2 | AAP, AKE.PA, DAN, HEL, HUN, JELD, LITE, RHI, TFX, TYDSF, VREX | Cyclical, global, small caps, tariffs, value, volatility |
ARKM.PA TFX RHI NOKBF |
Global small cap value strategy underperformed in volatile Q2 2025 due to tariff uncertainty impacting key holdings. Manager added positions in Arkema, Teleflex, Robert Half, and Nokian while exiting others on valuation. Despite macro headwinds keeping small caps depressed, portfolio remains positioned toward attractively valued cyclical and economically sensitive companies. |
| Mar 31 2025 | 2025 Q1 | 3401.T, 6481.T, ADNT, BIRG.L, CNO, CNXC, DAN, GCO, NVST | Cyclical, financials, global, small caps, tariffs, underperformance, value | - | Pzena's global small cap value strategy fell 4.4% in Q1 as tariff concerns weighed heavily on small caps versus large caps. Consumer discretionary and industrials detracted while financials supported performance. The manager maintains positioning in economically sensitive cyclicals, viewing current valuations as attractive despite challenging market conditions and ongoing small cap underperformance. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
ValueThe portfolio remains concentrated in businesses at or near cyclical earnings troughs, focusing on companies with durable competitive positions and clear paths to earnings normalization where valuations reflect excessive pessimism. The Global Small Cap Focused Value portfolio remains attractively valued and is currently among the cheapest portfolios across geographies and market capitalizations managed. |
Value Cyclical Earnings |
Small CapsSmaller companies were particularly impacted by shifting risk appetite, with performance weakening as the quarter progressed. The fund focuses on global small cap value opportunities, maintaining positions in businesses believed to be at cyclical troughs with recovery potential. |
Small Caps Risk Appetite Global | |
StaffingSpecialty staffing company Hays detracted from performance as persistent macroeconomic softness continued to pressure hiring demand, prompting cost-cutting actions. The sector faces headwinds from weak hiring demand amid uncertain macroeconomic conditions. |
Staffing Hiring Macroeconomic | |
| 2025 Q4 |
AIAI infrastructure plays dominated 2025 returns with 65% of Russell 2000's return coming from AI infrastructure. The manager views this as a concentrated, singular bet on CAPEX spending by five companies building data centers. Questions the sustainability of this theme given its concentration and speculative nature. |
Infrastructure Data Centers CAPEX Concentration |
Small CapsSmall caps continued to underperform large caps in 2025's narrow market. The Russell 2000's returns were dominated by AI infrastructure and unprofitable companies, creating extreme bifurcation between quality and speculative stocks. Manager sees this as creating opportunities for active management. |
Russell 2000 Underperformance Quality Active Management | |
ValueQuality businesses trade at historically cheap multiples due to extreme valuation disparities between winners and losers. The manager believes this creates significant opportunities for value-oriented investors in a market dominated by speculation. |
Quality Valuation Multiples Disparities | |
| 2025 Q3 |
ValueThe portfolio focuses on undervalued companies with attractive valuations, including new positions in Samsonite, Remy Cointreau, and Sensata based on compelling valuation opportunities. The strategy emphasizes economically sensitive and cyclical names where valuations remain quite attractive. |
Undervalued Attractive Cyclical Economically sensitive Compelling |
Small CapsThe fund invests in global small cap companies, with the portfolio outperforming its small cap benchmark during the quarter. Small cap stocks broadly outperformed large caps, and the strategy maintains positioning towards more economically sensitive small cap names. |
Small cap Outperformed Benchmark Global Positioning | |
Trade PolicyTariff uncertainty significantly impacted several portfolio companies, with Orion struggling due to tire imports and Concentrix declining as customers cut demand due to tariff uncertainty. The manager initiated a position in Samsonite believing fears of tariff impact are overstated as the company can pass through higher costs. |
Tariffs Uncertainty Imports Pass through Impact | |
| 2025 Q2 |
ValuePortfolio positioned towards economically sensitive and cyclical names with attractive valuations. Manager emphasizes value opportunities created by market volatility and macro uncertainty affecting small cap stocks. |
Undervalued Cyclical Attractive Depressed Opportunity |
Small CapsFocus on global small cap stocks which remain particularly depressed despite solid quarter performance. Manager notes small caps underperformed during volatile markets but sees this as creating opportunities. |
Small Cap Depressed Volatile Underperformed Global | |
Trade PolicyTariff uncertainty significantly impacted portfolio performance with several holdings negatively affected by potential tariffs and fears of higher prices impacting spending. Trump's softening stance throughout quarter helped U.S. small caps rebound. |
Tariffs Trade Uncertainty Pricing Policy | |
| 2025 Q1 |
Small CapsSmall cap stocks globally continued to underperform large-cap peers, widening the valuation gap between cohorts. The period remained particularly challenging for small caps, with US small caps declining markedly while non-US small caps were largely flat. Tariffs and economic impact drove weak sentiment particularly for small cap companies. |
Small Caps Valuation Underperformance Tariffs |
ValueThe portfolio remains positioned toward more economically sensitive and cyclical names, as valuations remain quite attractive. The strategy emphasizes undervalued companies with characteristics for improved valuations, maintaining focus on attractive valuations despite market challenges. |
Value Cyclical Economically Sensitive Attractive Valuations | |
Trade PolicyTariffs and their corresponding economic impact drove weak sentiment in the US, particularly for small cap companies. While full tariff details were not announced until after quarter-end, proposed changes throughout the period weighed on small caps, with concerns about negative impact on automotive production and profitability. |
Tariffs Trade Policy Economic Impact Automotive |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jan 29, 2026 | Fund Letters | Daniel L. Babkes | KNX | Knight-Swift Transportation Holdings Inc. | Industrials | Road & Rail Transportation | Bull | New York Stock Exchange | Cyclicals, Freight, Logistics, operating leverage, Trucking | Login |
| Jan 29, 2026 | Fund Letters | Evan D. Fox | WGO | Winnebago Industries, Inc. | Consumer Discretionary | Recreational Vehicles | Bull | New York Stock Exchange | consolidation, Cyclicals, Normalization, Recreational Vehicles, valuation | Login |
| Oct 24, 2025 | Fund Letters | Evan D. Fox | RESI | Resideo Technologies | Real Estate | Electrical Components & Equipment | Bull | NYSE | balance sheet, cashflow, Catalyst, Home automation, Housing, restructuring, spin-off, valuation | Login |
| Oct 24, 2025 | Fund Letters | Evan D. Fox | AAP | Advance Auto Parts | Consumer Discretionary | Specialty Retail | Bull | NYSE | Auto parts, Cost control, debt, Liquidity, Margins, profitability, restructuring, turnaround | Login |
| Oct 24, 2025 | Fund Letters | Evan D. Fox | SCS | Steelcase Inc. | Consumer Discretionary | Commercial Services & Supplies | Bull | NYSE | acquisition, consolidation, furniture, Hybrid work, M&A, Office, premium, recovery | Login |
| Oct 24, 2025 | Fund Letters | Evan D. Fox | HAS | Hays PLC | Industrials | Professional Services | Bear | NYSE | Cyclicality, Employment, labor market, Margins, Recruitment, Staffing, valuation | Login |
| Oct 24, 2025 | Fund Letters | Evan D. Fox | ORION | Orion S.A. | Materials | Chemicals | Bear | Euronext Stock Exchange | Carbon black, EV, materials, Pricing, recovery, Reshoring, tariffs, Tires | Login |
| Oct 24, 2025 | Fund Letters | Evan D. Fox | CNXN | Concentrix Corporation | Information Technology | Data Processing & Outsourced Services | Bear | NASDAQ | AI, BPO, Cost pressures, Margins, Outsourcing, recovery, tariffs, valuation | Login |
| Oct 24, 2025 | Fund Letters | Evan D. Fox | 1910 HK | Samsonite International S.A. | Consumer Discretionary | Textiles, Apparel & Luxury Goods | Bull | NYSE | Brand, Demand, Leisure, Pricing power, recovery, tariffs, Travel, valuation | Login |
| Oct 24, 2025 | Fund Letters | Evan D. Fox | SNSA | Sensata Technologies Holding plc | Other | Electronic Components | Bull | NYSE | automotive, Electrification, EV, management, Margins, recovery, Sensors, valuation | Login |
| Jun 30, 2025 | Fund Letters | Pzena Global Small Cap Focused Value strategy | ARKM.PA | Arkema | Materials | Specialty Chemicals | Bull | Euronext Paris | Europe, materials, Portfolio Improvement, specialty chemicals, undervalued, Value | Login |
| Jun 30, 2025 | Fund Letters | Pzena Global Small Cap Focused Value strategy | TFX | Teleflex | Health Care | Health Care Equipment | Bull | NYSE | Health Care Equipment, high-margin, Medical devices, Niche markets, spin-off, turnaround, Value | Login |
| Jun 30, 2025 | Fund Letters | Pzena Global Small Cap Focused Value strategy | RHI | Robert Half | Industrials | Human Resource & Employment Services | Bull | NYSE | Accounting, Cyclical, Finance, Human Resources, professional services, Staffing Services, Value | Login |
| Jun 30, 2025 | Fund Letters | Pzena Global Small Cap Focused Value strategy | NOKBF | Nokian Tyres | Consumer Discretionary | Tires & Rubber | Bull | NASDAQ Helsinki | capacity expansion, Consumer Discretionary, high-margin, Nordic, Replacement Tires, Seasonal Products, Tires | Login |
| TICKER | COMMENTARY |
|---|---|
| HAS.L | Specialty staffing company Hays detracted from performance as persistent macroeconomic softness continued to pressure hiring demand, prompting cost-cutting actions. |
| SAMSY | Samsonite, a luggage manufacturer, declined as travel-related concerns and input cost uncertainty drove the stock lower, despite solid earnings and pricing power. |
| CNXC | Concentrix, a provider of customer experience solutions, detracted as investors focused on the potential impact of generative AI and short-term margin pressure from capacity investments ahead of new contract wins. The company continues to win business with its AI solutions, and the stock remains very attractive even with its relatively wide range of outcomes. |
| AAP | Auto parts retailer Advance Auto Parts contributed meaningfully as the company's turnaround continued to gain traction, with better inventory management and cost control supporting margins and improving operating execution. |
| DOUG | Snowplow manufacturer Douglas Dynamics reported fourth-quarter results reflecting strong demand in its Work Truck Attachments segment following an early start to winter and above-average snowfall totals in its core markets, and management provided full-year guidance in line with consensus. |
| SPB | Consumer products company Spectrum Brands contributed as strength in its Global Pet Care business along with encouraging signs for its Home & Garden business offset ongoing weakness in Home Appliances and Personal Care. |
| BME.L | B&M is a UK discount retailer executing a credible operational turnaround under new management. |
| TATE.L | food ingredient specialist Tate & Lyle faces cyclical headwinds following an acquisition and weaker demand. |
| EVK.DE | Evonik, a specialty chemicals company with a diversified product portfolio and market-leading positions across several specialty chemicals, remains focused on optimizing its asset base and cost structure amid a prolonged industry downturn, offering an attractive long-term opportunity. |
| MMI | We also initiated a position in commercial real estate broker Marcus & Millichap on valuation. |
| MLKN | a position in furniture manufacturer MillerKnoll, which has been pressured by a weak office market and integration issues following its merger. We believe the shares discount these challenges too heavily relative to the company's normalized earnings power and the potential for a broader return-to-office recovery. The office furniture market has consolidated over the past several years, which has helped with rationality and profitability. |
| TEP.PA | Teleperformance, a global outsourced customer experience provider, where we see recovery potential. |
| NVST | trimmed Envista Holdings, a manufacturer of dental products and technologies. |
| DNOW | DNOW Inc., a leading distributor of flow-control products and related services to global energy and industrial end markets on valuation. |
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