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 Midcap 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. 17.9
8.0
8.8
12.9
6.7
16.8
6.9
7.8
11.5
12.8
14.2
8.0
6.5
13.1
7.8
0
2
4
6
8
10
12
14
16
18
20
YTD 1 year 3 year 5 year Since Inception*
Return (%)
BLM Midcap Grow th Composite (gross of fees) BLMMidcap Grow th Composite (net of fees) Russell Midcap Grow th Index
Historical Performance vs. Russell Midcap Growth Index
Midcap Growth Composite1
1. Preliminary as of 3/31/13. Performance for periods greater than 1 year is annualized.
*Inception 10/1/97.
The information contained on this page is supplemental to the GIPS compliant composite
contained on the final pages of this presentation.
17. BLM Midcap Growth Composite vs. Russell Midcap Growth Index
Sector weightings and top 10 holdings
Security Sector
% Net
Assets
1
United Rentals, Inc. Industrials 4.81
Tenet Healthcare Corporation Health Care 4.34
HCA Holdings, Inc. Health Care 4.03
Manitowoc Company, Inc. Industrials 3.96
Splunk, Inc. Information Technology 3.86
Triumph Group, Inc. Industrials 3.69
Dana Holding Corporation
Consumer
Discretionary
3.47
Brunswick Corporation
Consumer
Discretionary
3.45
Mohawk Industries, Inc.
Consumer
Discretionary
3.33
Oasis Petroleum Inc. Energy 2.98
Total 37.92
BLM Midcap Growth Composite1
vs. Russell Midcap Growth Index
Cash
BLM Midcap 0.8%
Industrials
BLM Midcap 24.1%
Russell Midcap 15.6%
Consumer
Discretionary
BLM Midcap 28.5%
Russell Midcap 24.8%
Materials
BLM Midcap 2.0%
Russell Midcap 6.2%
Healthcare
BLM Midcap 18.7%
Russell Midcap 12.7%
Energy
BLM Midcap 4.0%
Russell Midcap 5.7%
Information
Technology
BLM Midcap 22.0%
Russell Midcap 16.4%
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 Midcap Growth Index sectors in which BLM had no weighting are not shown.
18. BLM Midcap Growth Composite vs. Russell Midcap Growth Index
Portfolio Characteristics
BLM Midcap
Growth Composite1
Russell Midcap
Growth Index
P/E 2013 (ex-neg)2
25.7x 18.6x
2013/2012 EPS Growth Rate2
36.5% 9.2%
2013 PEG Ratio 0.70 2.02
Weighted Avg. Market Cap $7,293 MM $10,350 MM
Median Market Cap $5,547 MM $5,345 MM
1. Preliminary as of 3/31/13. Inception 10/1/97.
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 Midcap
Growth Composite
(3-Year)1
Russell Midcap
Growth Index
Alpha 1.88 -
Beta 1.15 1.00
R-Squared 0.92 1.00
Sharpe Ratio3
0.72 0.68
Standard Deviation3
24.94 20.81
19. BLM Midcap Growth Composite
Peer Group Rankings
Source: PSN Enterprise
BENNETT LAWRENCE MID CAP GROWTH
QUARTILE RANKING BAR
PSN MID 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 9/1997-3/2013
HIGH (0.05) 20.29 20.62 13.51 13.98
FIRST QUARTILE 13.67 16.25 9.88 9.90
MEDIAN 11.11 14.37 8.34 8.97
THIRD QUARTILE 8.69 12.71 6.73 6.89
LOW (0.95) 2.44 8.91 3.50 5.70
MEAN 11.12 14.48 8.36 8.72
VALID COUNT 131 129 127 43
Bennett Lawrence Mid Cap Growth
Russell Mid Cap Growth
3/2012-3/2013 3/2010-3/2013 3/2008-3/2013 9/1997-3/2013
VALUE RANK VALUE RANK VALUE RANK VALUE RANK
7.79 82 17.94 11 7.95 54 8.82 53
12.76 29 14.23 52 7.98 53 6.47 81
21. Bennett Lawrence Midcap Growth Composite
*Performance returns are preliminary as of March 31, 2013.
• Returns are time weighted. The Midcap Growth Composite includes all fully discretionary accounts under management. Figures are not audited and are subject to
change. Individual investor results will vary.
• 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 Midcap Growth Index and the 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.
22. N.A. - Information is not statistically meaningful due to an insufficient number of portfolios in the composite for the entire year.
N.A.* - No sponsor accounts were present in the composite during the given year.
* YTD 1997 performance is from October 1, 1997 through December 31, 1997.
Composite Assets Annual Performance Returns
Year
End
Total Firm
Assets
(millions)
USD
(millions)
%
Sponsor
Number
of
Accounts
Composite
Gross
Composite
Net
Composite
Net of
Sponsor Fee
Russell
Midcap
Growth
Composite
Dispersion
2011 503 206 1% 25 1.11% 0.10% -0.91% -1.65% 0.86%
2010 558 44 2% 19 29.42% 28.20% 27.00% 26.38% 0.34%
2009 782 55 15% 35 26.48% 25.28% 24.10% 46.29% 0.64%
2008 832 49 14% 47 -42.72% -43.38% -44.04% -44.32% 0.90%
2007 1,802 104 10% 53 24.67% 23.50% 22.33% 11.43% 1.11%
2006 1,753 146 15% 74 4.75% 3.72% 2.69% 10.66% 1.23%
2005 2,007 203 12% 65 8.46% 7.40% 6.35% 12.10% 1.14%
2004 1,423 72 21% 24 22.48% 21.31% 20.16% 15.48% 1.37%
2003 1,123 37 8% 13 35.69% 34.44% 33.19% 42.71% 1.73%
2002 821 92 12% 12 -14.88% -15.76% -16.64% -27.41% 0.18%
2001 1,175 132 7% 4 -15.23% -16.11% -17.00% -20.15% N.A.
2000 1,542 8 0% 1 -3.95% -4.92% N.A.* -11.75% N.A.
1999 1,652 8 0% 1 76.84% 75.29% N.A.* 51.29% N.A.
1998 949 5 0% 1 13.31% 12.19% N.A.* 17.86% N.A.
YTD 1997* 909 5 0% 1 -9.11% -9.36% N.A.* -2.75% N.A.
Midcap Composite GIPS Compliant Presentation
Annual Disclosure
23. Midcap Composite contains fully discretionary midcap accounts and for comparison purposes is measured against the Russell Midcap 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 Midcap
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 Midcap Composite was created March 2002. A list of composite descriptions is
available upon request.
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.
The figures for 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 this index. The Index returns are calculated by the Frank Russell Company.
At December 31, 2011, the three-year annualized ex-post standard deviation of the Midcap Composite’s gross returns and the Russell Midcap Growth Index are 1.82% and 1.82%,
respectively.
Midcap Composite GIPS Compliant Presentation
Annual Disclosure
Notes de l'éditeur
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.