Morningstar Advisor - Spring 2008 - (Page 53) Morningstar Conversation The Last Holdout By Kunal Kapoor Standing firm against falling returns and assets, Richard Pzena stockpiles beaten-up financials. His is a conviction few share. To say that Richard Pzena has been put through the wringer may be an understatement. While many of his peers won’t touch beaten-up financial stocks, Pzena has steadfastly added to the likes of Freddie Mac FRE, Fannie Mae FNM, Citigroup C, Bank of America BAC, and others in the past six months. But as the myriad headlines have made abundantly clear, that simply hasn’t been the right thing to do. Not yet, anyway. The John Hancock Classic Value Fund PZFVX, which Pzena manages, fell more than 14% in 2007 and was down double digits for a brief period in early 2008 again. Pzena Investment Management PZN, which went public in 2007, has seen assets under management decline from a high of more than $30 billion to less than $25 billion recently. Meanwhile, the firm’s stock fell from more than $20 to less than $10, before bouncing back modestly. It’s enough to make most investors pack it in, but Pzena is sticking to his guns, convinced that MorningstarAdvisor.com 53 http://MorningstarAdvisor.com
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