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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 30, 2009
WESTWOOD HOLDINGS GROUP, INC.
(Exact name of registrant as specified in charter)
| Delaware | 001-31234 | 75-2969997 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
200 Crescent Court, Suite 1200
Dallas, Texas 75201
(Address of principal executive offices)
(214) 756-6900
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01 Regulation FD Disclosure.
On March 30, 2009, Westwood Holdings Group, Inc. (“the Company”) will hold meetings with investors to provide an update on the Company’s business.
The slides accompanying the investor meetings are attached as Exhibit 99.1 and will be available on the Company’s website at www.westwoodgroup.com under “Investor Relations.”
The information in this report, including exhibits, is being furnished pursuant to Item 7.01 and shall not be deemed “filed” within the meaning of section 18 of the Securities Act of 1934, or otherwise subject to the liabilities under that Section.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit Number |
Description | |
| 99.1 | Slides accompanying Company’s investor meetings to be held on March 30, 2009. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| WESTWOOD HOLDINGS GROUP, INC. Date: March 30, 2009 | ||
| By: | /s/ William R. Hardcastle, Jr. | |
| William R. Hardcastle, Jr., | ||
| Chief Financial Officer | ||
EXHIBIT INDEX
| Exhibit Number |
Description | |
| 99.1 | Slides accompanying Company’s investor meetings to be held on March 30, 2009. |
 Westwood Holdings Group, Inc. Spring 2009 Investor Presentation Brian O. Casey President, Chief Executive Officer William R. Hardcastle, Jr. Vice President, Chief Financial Officer Exhibit 99.1 |
 Forward – Looking Statements Statements in this presentation that are not purely historical facts, including statements
about our expected future financial position, results of operations or cash flows, as well as other statements including words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “should,” “could,” “goal,” “target,” “designed,” “on track,” “comfortable with,” “optimistic” and other similar expressions, constitute forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results and the timing of some events could differ materially from those projected in or contemplated by the forward-looking statements due to a
number of factors, including, without limitation, those set forth below:
• our ability to identify and successfully market services that appeal to our
customers; • the significant concentration of our revenues in four of our customers; • our relationships with investment consulting firms; • our relationships with current and potential customers; • our ability to retain qualified personnel; • our ability to successfully develop and market new asset classes; • our ability to maintain our fee structure in light of competitive fee pressures;
• competition in the marketplace; • downturn in the financial markets; • the passage of legislation adversely affecting the financial services industries;
• interest rates; • changes in our effective tax rate; • our ability to maintain an effective system of internal controls; and • the other risks detailed from time to time in our SEC reports. Additional factors that could cause our actual results to differ materially from our expectations are discussed under the section entitled “Risk Factors” in our Form 10-K for the year ended December 31, 2008, which together with our other
filings can be viewed at www.sec.gov. You should not unduly rely on these
forward-looking statements. Except as required by law, we are not obligated to publicly release any revisions to these forward-looking statements. Page 1 |
 Agenda Page 2 I. Firm Overview II. Investment Process & Products III. Financial Highlights IV. Summary |
 Firm Overview • Well-established asset management firm • Clear focus on investment management and client service since 1983 • Strong long-term performance • Strict adherence to our process has resulted in strong risk-adjusted returns for
our clients • Growing asset base • $7.2 billion in assets under management as of December 31, 2008 • Four-year compound annual growth rate over 15%, compared to -7% for the S&P
500 • Solid financial condition • No debt; strong cash generation; currently maintain over one year’s cash expenses
in T-Bills • Independent with equity-based incentives • Publicly traded company (NYSE: WHG) since 2002 • 36% of company stock held by senior management, employees and directors • Effective tool to attract and retain talented professionals • Strong and committed team of professionals • Senior members of the firm have worked together for over a decade • Client-centered culture • Culture of integrity, ethics, solid corporate governance and internal controls
Page 3 |
 Westwood History Westwood Funds Westwood Management Corp. Acquired by Southwest Securities (SWS) Westwood Trust Westwood Holdings Group, Inc. • Registered Investment Advisor • Institutional focus 1983 1993 1994 1996 2002 SWS Provided: • Capital • Autonomy • Technology • Distribution • Distributed by Gabelli • Sub-advised by Westwood • Commingled funds • New product platform • Spin-off • Independent public company WHG Funds 2005 • Targeted to institutional, defined contribution market • Advised by Westwood; distributed by SEI Page 4 WHG Commingled Funds 2008 • Targeted to major institutional plan sponsors • Advised by Westwood; distributed by SEI |
 Westwood Value Proposition Page 5 • At our spin-off in 2002 we said we would: • Build out our research team • Expand our product offerings • Deliver excellent performance for our clients • Operate the firm in a stockholder-friendly manner • Energize our employees • Since that time we have: • Developed a talented, team-based research process, adding 10 CFAs to the team
• Launched six additional products • Generated strong investment performance – LargeCap, SMidCap, SmallCap, AllCap and Balanced ranked in the top quartile in their peer group for the five-year trailing period as of December 30, 2008 • Declared $46 million in dividends to stockholders • Experienced very low employee turnover • Built the platform for a much larger business |
 Product Distribution Westwood Management Corp. • Separately managed portfolios – large institutions • Subadvisory • Collective funds – large defined contribution marketplace • Managed accounts (“SMA”) – select platforms • Institutional consultants Account minimum – $25,000,000 Westwood Trust • Commingled Funds – small to mid-size institutions, high net worth • Enhanced Balanced asset allocation model • Separately managed portfolios – tax-sensitive accounts, IRA rollover market • Institutional consultants, client referrals, centers of influence Account minimum – $5,000,000 WHG Funds • Institutional share class – institutions, small to mid-size defined contribution plans, direct retail • A share class – mutual fund supermarket platforms • Institutional consultants, financial intermediaries, media coverage Account minimum – $5,000 Page 6 TM |
 Subadvisory Page 7 • Subadvisory opportunities – attractive means for enhanced distribution of scalable products – LargeCap and MidCap • Access to established distribution channels • Generally lower average fee, but high profitability due to low incremental costs
• Current Westwood subadvisory mandates • UBS Pace • Wilmington Trust Co. • Principal Financial • State Farm • LPL Financial • Goodman Institutional Investors • Phoenix Insurance Company • Timothy Plan • GAMCO Westwood Funds • Westwood Trust |
 Overview of Investment Process Qualities that Westwood analysts look for in securities: • Strong free cash flow characteristics • Stable to improving return on equity • Improving balance sheet • Upside earnings surprise without corresponding change in consensus estimates Portfolio Teams Research Analysts • Idea generation • Proprietary fundamental research • Make buy & sell recommendations 4 Research Groups • Led by senior analysts • Weekly due diligence meetings to review analyst recommendations • Approved securities move to list of portfolio candidates • At least one member from each Research Group • Weekly meetings to review portfolio and new names • Makes buy and sell decisions and manages portfolio risk Page 8 |
 Peer Group Product Comparisons Trailing 3-Years as of 12/31/08 LargeCap SMidCap SmallCap AllCap $43 Billion $2 Billion $1 Billion $18 Billion Portfolio Median Market Cap eA Small-Mid Cap Value Equity Universe Trailing 3-Years (Ending 12/31/08) eA Large Cap Value Equity Universe Trailing 3-Years (Ending 12/31/08) eA All Cap Value Equity Universe Trailing 3-Years (Ending 12/31/08) eA Small Cap Value Equity Universe Trailing 3-Years (Ending 12/31/08) Westwood LargeCap Value Russell 1000 Value Westwood SMidCap Value Russell 2500 Westwood SmallCap Value Russell 2000 Value Westwood AllCap Value Russell 3000 Value Page 9 Past performance is not a guarantee of future results. Performance results are calculated gross of fees. Please see full performance disclosures at end of presentation. |
 Peer Group Performance Comparison Source: eVestment Alliance Returns for 1 Year Trailing Returns for 3 Years Trailing Returns for 5 Years Trailing Returns for 10 Years Trailing Returns for 20 Years Trailing LargeCap 21 7 5 21 3 SMidCap 7 2 1 8 N/A SmallCap 45 27 11 N/A N/A AllCap 41 27 12 N/A N/A Balanced 24 13 8 17 4 Percentile Ranking as of December 31, 2008 Page 10 The eVestment Alliance Universes contain the following number of return sets: LargeCap Value Equity (355), Small-MidCap Value Equity (74), SmallCap Value Equity (220), AllCap Value Equity (91), and US Balanced/TAA (106). Past performance does not guarantee future results. Stock market conditions vary from year to year and can result in a decline in market
value. This is not an offer or recommendation to buy or sell a
security or an economic sector. |
 Significant Product Capacity Remains Page 11 Seasoned Products (>3 year track record & >$100 Million in assets) Assets Under Management As of 12/31/08 Estimated Maximum Capacity AUM Asset Growth Potential Product Inception LargeCap Value $4.0 billion $25 billion $21.0 billion 1987 SMidCap Value $1.4 billion $3 billion $1.6 billion 1997 SmallCap Value $180 million $1.5 billion $1.3 billion 2004 AllCap Value $90 million $10 billion $9.9 billion 2002 Income Opportunity $240 million $2 billion $1.8 billion 2003 MLP $140 million $1.5 billion $1.4 billion 2003 Total Seasoned $6 billion $43 billion $37 billion Unseasoned (R&D) Products (<3 year track record & <$100 Million in assets) MidCap Value $20 million $15 billion $15 billion 2007 LargeCap Enhanced 130/30 $7 million $10 billion $10 billion 2007 Total Unseasoned $27 million $25 billion $25 billion Total Seasoned & Unseasoned $6 billion $68 billion $62 billion Legacy Products Balanced / Fixed Income / REIT $500 million N/A N/A 1987 / 1985 / 1995 Note: Table reflects Westwood Management assets under management as of 12/31/08 (including Westwood Trust commingled funds) |
 Seasoned Products & Capacity Available Estimated Capacity ($ millions) Page 12 |
 Westwood Trust • Consistent asset growth – 11% compound annual growth rate of assets over the last five years • Enhanced Balanced – Asset allocation model – 7 asset classes managed by Westwood Management 5 asset classes managed by subadvisors – Consultative approach – Low cost, efficient solution – Asset gathering platform – Private Client – “Best Ideas” • Subadvisors: Page 13 International Growth High Yield AllCap Growth & SmallCap Growth iShares (active subadvisor search in progress) International Value TM |
 WHG SMidCap (WHGMX) WHG Income Opportunity (WHGIX) WHG LargeCap Value (WHGLX) To be rated 7/1/09 WHG Balanced (WHGBX) To be rated 9/8/09 WHG SmallCap Value (WHGSX) To be rated 4/1/10 Source: Morningstar as of December 31, 2008 * TPLNX has a four star rating for the 3-year period under Westwood’s
management of the Fund Mutual Funds GAMCO Westwood Equity (WESWX) GAMCO Westwood Balanced (WEBAX) GAMCO Westwood Intermediate Bond (WEIBX) Timothy Plan Large/MidCap Value (TLVAX) Timothy Plan SmallCap Value (TPLNX)* WHG Funds – Advised by Westwood Management Other Funds – Subadvised by Westwood Management Page 14 ©2009 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. Please see appendix for a full explanation of the Morningstar rating system and how these ratings are determined.
|
 Financial Highlights – 2008 Page 15 • Strong asset inflows and performance fees offset difficult market environment
Year-over-year Metric 2008 Result Change • Assets under management $7.2 billion -9% (vs. -37% for S&P 500) • Revenue $46.5 million +28% • GAAP net income $10.5 million +33% • Cash earnings $17.3 million +30% • GAAP earnings per share $1.63 +28% • Cash earnings per share $2.68 +25% • Performance fees recognized in 2008 were $8.7 million vs. $3.0 million in 2007
|
 Growth in Assets Under Management Page 16 Quarterly AUM Growth • From Q1 2004 – Q4 2008, Westwood’s AUM has increased by 85%, or a compound annual growth rate of 14% • Over this same period, the level of the S&P 500 index has declined by 20%
• Westwood achieved the highest level of net asset inflows in its history in 2008
AUM Growth in a Challenging Environment |
 Change in AUM vs. Product Performance & Benchmarks Westwood Management Westwood Trust • Westwood’s strong asset inflows and relative outperformance mitigated the impact of the 2008 market decline on assets under management Page 17 |
 Westwood AUM vs. Peers • Westwood’s AUM held up better than peers due to strong inflows and relative
investment performance • Many asset management firms significantly cut or eliminated their dividends in
2008 Page 18 2008 Quarterly Dividend AUM Change Action Westwood Holdings Group, Inc. (WHG) -8.5% no change Blackrock (BLK) -3.6% no change Epoch Holding Corp. (EPHC) -20.9% no change Eaton Vance (EV) -21.2% 3% increase Q4 Boston Private Financial Holdings (BPFH) -24.6% 90% cut Q3 '08 Waddell & Reed (WDR) -26.8% no change Invesco (IVZ) -28.6% 55% cut Q2 '08 T. Rowe Price (TROW) -30.4% 4% increase Q1 '09 Franklin Resources (BEN) -35.3% no change Affiliated Managers Group (AMG) -38.1% does not pay div. Janus Capital (JNS) -40.3% no change Alliance Bernstein (AB) -42.3% 52% cut Q1 '09 Calamos Asset Management (CLMS) -48.1% 50% cut Q4 '08 Cohen & Steers (CNS) -49.3% 77% cut Q4 '08/Q1 '09 Pzena Investment Management (PZN) -54.9% 100% cut Q4 '08 Peer group average -33.2% S&P 500 - price change -38.5% |
 Revenue, Earnings and Dividend Growth Page 19 Revenue Growth Dividend Growth Cash Earnings Growth • Compound annual growth rate from 2004 – 2008 • Revenue 23% • Cash earnings 35% • Performance-based fees • 2007 $3.0 million • 2008 $8.7 million • Dividend yield of 3.2% as of March 24, 2009 |
 WHG Stock Performance • Cumulative total return from December 31, 2002 to December 31, 2008 of 105%, compared
to 4% for the SNL Asset Manager Index and -5% for the Russell 2000
Index • Outperformed SNL Asset Manager Index by 56% in 2007 and 31% in 2008 • Added to Russell 3000 and related indexes in 2008 Page 20 |
 Near-term Objectives • Serve clients attentively • Generate competitive investment performance • Cultivate consultant relationships • Leverage referral sources at Westwood Trust ~75% of new assets from
referrals • Match manufacturing capability with distribution partners through subadvisory
opportunities • Develop collective fund offerings across multiple products to serve the large defined
contribution plan market • Continue to grow the WHG Funds • Cultivate new “R&D” products • Increase visibility of WHG stock Page 21 |
 Ownership • We believe owners behave differently than employees. • All employees participate in our equity compensation program, which represents a
significant portion of total compensation. • Unique ownership structure aligns the interests of our employees with those of our clients and stockholders. • Employees and directors own approximately 35 percent of our outstanding stock, which
makes our ownership structure unique among our peers. Results • Thanks to the hard work of our employees – who are also all Westwood stockholders – in our time as a public company we have: • Delivered strong product performance. At year-end 2008, each of our products ranked in the top quartile or top half of their respective peer groups for one-, three-, and five-year
trailing performance. • Grown assets under management by 55% from June 2002 to year-end 2008. The S&P 500 Index declined by
9% over that period. • Increased shareholder value. Westwood’s market value increased from $75 million at June 2002 to $198
million at year-end 2008 – a total return of 199% compared to 21% for the Russell 2000 Index over the same period. • Returned excess cash to our stockholders through dividends. We have declared approximately $46 million in dividends to our stockholders since June 2002. Ownership & Results Our main objective: Deliver superior returns to our clients and
our stockholders Page 22 |
 Summary • Established firm with recognized institutional presence • Seasoned competitive products • Attractive product pipeline with strong performance; solid momentum in institutional marketplace • Private client growth opportunities • Employees are stakeholders • Opportunity to realize operational leverage and growth • Potential for significant cash generation combined with history of returning
excess cash to stockholders Page 23 |
 Cash to GAAP Reconciliations Page 24 Cash Earnings Reconciliation ($ thousands) Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 GAAP net income $ 1,117 $ 988 $ 685 $ 896 $ 875 $ 937 $ 814 $ 1,010 Add: Restricted stock expense 202 203 426 419 385 415 657 657 Add: Stock option expense 62 62 63 62 63 62 63 62 Less: Cumulative effect of change in accounting principle - - - - - - - - Non-GAAP cash earnings $ 1,381 $ 1,253 $ 1,174 $ 1,377 $ 1,323 $ 1,414 $ 1,534 $ 1,729 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 GAAP net income $ 1,296 $ 986 $ 921 $ 1,305 $ 1,507 $ 1,473 $ 1,682 $ 3,282 $ 1,955 $ 1,731 $ 1,736 $ 5,121 Add: Restricted stock expense 639 1,126 1,387 1,348 898 1,362 1,537 1,519 1,209 1,942 1,775 1,808 Add: Stock option expense 61 61 - 4 - - - - - - - - Less: Cumulative effect of change in accounting principle (39) - - - - - - - - - - - Non-GAAP cash earnings $ 1,957 $ 2,173 $ 2,308 $ 2,657 $ 2,405 $ 2,835 $ 3,219 $ 4,801 $ 3,164 $ 3,673 $ 3,511 $ 6,929 |
 LargeCap Disclosure Information Year Gross- of-Fees Return Net-of- Fees Return Russell 1000 Value S&P 500 Number of Portfolios Dispersion Total Assets at End of Period Percentage of Firm Assets Percentage of Non-Fee Paying Portfolios Total Firm Assets 2008 -32.4% -32.7% -36.9% -37.0% 36 0.3 $3,142.0 48.1% 0.0% $6,538.0 2007 13.3% 12.9% -0.2% 5.5% 34 0.3 $2,921.7 41.1% 0.0% $7,113.2 2006 19.9% 19.5% 22.3% 15.8% 32 0.1 $2,368.8 43.4% 0.0% $5,455.9 2005 15.8% 15.3% 7.1% 4.9% 32 0.3 $2,656.2 57.7% 0.0% $4,606.5 2004 14.2% 13.7% 16.5% 10.9% 39 0.3 $2,572.6 67.7% 0.0% $3,797.6 2003 24.8% 24.3% 30.0% 28.7% 42 0.5 $2,341.3 61.4% 0.0% $3,815.3 2002 -15.7% -16.1% -15.5% -22.1% 38 0.5 $1,822.5 45.4% 0.0% $4,014.6 2001 -8.2% -8.6% -5.6% -11.9% 35 0.4 $1,880.7 46.8% 0.0% $4,022.9 2000 13.5% 13.0% 7.0% -9.2% 33 0.6 $1,637.3 46.1% 0.0% $3,551.7 1999 13.8% 13.3% 7.4% 21.1% 26 1.6 $1,111.4 48.0% 0.0% $2,314.8 1998 21.5% 20.7% 15.6% 28.8% 17 4.3 $536.6 26.2% 0.0% $2,049.7 The standard fee schedule for LargeCap Equity is 0.75% on the first $25 million, negotiable
thereafter. Westwood Management has been verified for the periods January 1, 1995 through
December 31, 2007 by Pricewaterhouse Coopers LLP. A copy of the verification report is available
upon request. The LargeCap composite includes all taxable and tax-exempt, fee-paying
fully discretionary accounts invested primarily in equity securities with market capitalizations
above $7.5 billion and having comparable objectives. The minimum portfolio size for inclusion in
the LargeCap Composite is $5 million beginning 1/1/06. PERFORMANCE RESULTS: LARGECAP
EQUITY COMPOSITE January 1, 1995 through December 31, 2008 Reporting Currency: USD Creation Date: January 1994 LARGECAP EQUITY LARGECAP EQUITY COMPOSITE RETURNS COMPOSITE RETURNS Gross of Fees Net of Fees S&P 500 Gross of Fees Net of Fees S&P 500 ANNUALIZED RETURNS CALENDAR YEAR RETURNS 1 Year -32.4 % -32.7 % -36.9 % -37.0 % 2008 (32.4) % (32.7) % -36.9 % -37.0 % 2 Years -12.5 % -12.8 % -20.6 % -18.5 % 2007 13.3 % 12.9 % -0.2 % 5.5 % 3 Years -2.8 % -3.2 % -8.3 % -8.4 % 2006 19.9 % 19.5 % 22.3 % 15.8 % 4 Years 1.5 % 1.2 % -4.7 % -5.2 % 2005 15.8 % 15.3 % 7.1 % 4.9 % 5 Years 4.0 % 3.5 % -0.8 % -2.2 % 2004 14.2 % 13.7 % 16.5 % 10.9 % 6 Years 7.2 % 6.7 % 3.8 % 2.4 % 2003 24.8 % 24.3 % 30.0 % 28.7 % 7 Years 3.6 % 3.1 % 0.8 % -1.5 % 2002 (15.7) % (16.1) % -15.5 % -22.1 % 8 Years 2.0 % 1.6 % 0.0 % -2.9 % 2001 (8.2) % (8.7) % -5.6 % -11.9 % 9 Years 3.2 % 2.8 % 0.7 % -3.6 % 2000 13.5 % 13.1 % 7.0 % -9.1 % 10 Years 4.3 % 3.8 % 1.4 % -1.4 % 1999 13.8 % 13.3 % 7.4 % 21.0 % 11 Years 5.7 % 5.2 % 2.6 % 1.0 % 1998 21.5 % 20.6 % 15.6 % 28.6 % 12 Years 7.8 % 7.3 % 5.0 % 3.4 % 1997 33.6 % 32.7 % 35.2 % 33.4 % 13 Years 9.2 % 8.7 % 6.2 % 4.8 % 1996 27.8 % 26.9 % 21.6 % 23.0 % 14 Years 11.2 % 10.6 % 8.2 % 6.8 % 1995 40.5 % 39.3 % 38.4 % 37.6 % 15 Years 10.7 % 10.1 % 7.5 % 6.5 % 1994 4.2 % 3.5 % -2.0 % 1.3 % 16 Years 11.2 % 10.6 % 8.1 % 6.7 % 1993 19.2 % 18.5 % 18.1 % 10.1 % 17 Years 11.1 % 10.4 % 8.5 % 6.7 % 1992 9.0 % 8.3 % 13.8 % 7.6 % 18 Years 11.8 % 11.1 % 9.3 % 7.9 % 1991 24.7 % 23.9 % 24.6 % 30.5 % 19 Years 10.5 % 9.9 % 8.3 % 7.3 % 1990 (9.2) % (10.0) % -8.1 % -3.1 % 20 Years 11.6 % 10.9 % 9.1 % 8.4 % 1989 32.5 % 31.7 % 25.2 % 31.7 % 21 Years 11.8 % 11.1 % 9.7 % 8.8 % 1988 16.6 % 15.7 % 23.2 % 16.6 % 22 Years 11.6 % 10.9 % 9.3 % 8.6 % 1987 7.8 % 6.9 % 0.5 % 5.3 % Since Inception (1/1/87) 11.6 % 10.9 % 9.3 % 8.6 % Russell 1000 Value Russell 1000 Value |
 SMidCap Disclosure Information Year Gross of Fees Return Net of Fees Return Russell 2500 Russell 2500 Value Number of Portfolios Dispersion Total Assets at End of Period Percentage of Firm Assets Percentage of Non-Fee Paying Portfolios Total Firm Assets 2008 -26.4% -26.7% -36.8% -32.0% 16 0.2 $917.4 14.0% 0.0% $6,538.0 2007 12.3% 11.7% 1.4% -7.3% 14 0.3 $1,091.2 15.3% 0.0% $7,113.2 2006 22.2% 21.6% 16.2% 20.2% 9 0.2 $784.5 14.4% 0.0% $5,455.9 2005 20.8% 20.5% 8.1% 7.7% 4 0.1 $554.9 12.0% 0.0% $4,606.5 2004 28.1% 27.6% 18.3% 21.6% 2 0.1 $77.9 2.1% 0.0% $3,797.6 2003 34.1% 33.6% 45.5% 44.9% 2 0.3 $50.5 1.3% 0.0% $3,815.3 2002 1.2% 0.7% -17.8% -9.9% 2 0.1 $32.7 0.8% 0.0% $4,014.6 2001 -10.8% -11.1% 1.2% 9.7% 2 1.4 $31.8 0.8% 0.0% $4,022.9 2000 7.4% 7.0% 4.3% 20.8% 2 0.2 $35.9 1.0% 0.0% $3,551.7 1999 30.1% 29.7% 24.2% 1.5% 2 0.5 $37.3 1.6% 0.0% $2,314.8 1998 13.7% 13.0% 0.4% -1.9% 2 0.1 $27.7 1.4% 0.0% $2,049.7 The standard fee schedule for the SMidCap product is 0.85% on the first $25 million, negotiable
thereafter. Westwood Management has been verified for the periods July 1, 1997 through December
31, 2007 by Pricewaterhouse Coopers LLP. A copy of the verification report is available upon
request. The SMidCap Composite consists of tax-exempt and taxable, fee-paying fully
discretionary accounts invested primarily in equity securities with market capitalizations
between $500 million and $8.0 billion and having comparable objectives. The minimum portfolio
size for inclusion in the SMidCap Composite is $5 million beginning 1/1/06. PERFORMANCE
RESULTS: SMIDCAP COMPOSITE January 1, 1998 through December 31, 2008 Reporting Currency: USD Creation Date: July 1997 SMIDCAP EQUITY COMPOSITE RETURNS Gross of Fees Net of Fees Russell 2500 Russell 2500 Value ANNUALIZED RETURNS 1 Year (26.4) % (26.7) % (36.8) % (32.0) % 2 Years (9.1) % (9.5) % (20.0) % (20.6) % 3 Years 0.4 % (0.2) % (9.4) % (8.8) % 4 Years 5.1 % 4.6 % (5.3) % (4.9) % 5 Years 9.4 % 8.9 % (1.0) % (0.2) % 6 Years 13.1 % 12.7 % 5.6 % 6.3 % 7 Years 11.3 % 10.9 % 1.9 % 3.8 % 8 Years 8.3 % 7.9 % 1.8 % 4.5 % 9 Years 8.2 % 7.8 % 2.1 % 6.2 % 10 Years 10.2 % 9.8 % 4.1 % 5.7 % 11 Years 10.5 % 10.1 % 3.7 % 5.0 % Since Inception (7/1/97) 11.7 % 11.2 % 4.6 % 6.1 % CALENDAR YEARS 2008 (26.4) % (26.7) % (36.8) % (32.0) % 2007 12.3 % 11.7 % 1.4 % (7.3) % 2006 22.2 % 21.6 % 16.2 % 20.2 % 2005 20.8 % 20.5 % 8.1 % 7.7 % 2004 28.1 % 27.6 % 18.3 % 21.6 % 2003 34.1 % 33.6 % 45.5 % 44.9 % 2002 1.2 % 0.7 % (17.8) % (9.9) % 2001 (10.8) % (11.1) % 1.2 % 9.7 % 2000 7.4 % 7.0 % 4.3 % 20.8 % 1999 30.1 % 29.7 % 24.2 % 1.5 % 1998 13.7 % 13.0 % 0.4 % (1.9) % |
 SmallCap Value Disclosure Information Year Gross of Fees Return Net of Fees Return Russell 2000 Value Number of Portfolios Dispersion Total Assets at End of Period Percentage of Firm Assets Percentage of Non-Fee Paying Portfolios Total Firm Assets 2008 -31.0% -31.4% -28.9% 9 0.4 $177.2 2.7% 0.0% $6,538.0 2007 3.6% 3.2% -9.8% 5 0.9 $134.5 1.9% 0.0% $7,113.2 2006 24.1% 23.7% 23.5% 4 0.2 $125.7 2.3% 0.0% $5,455.9 2005 10.5% 10.1% 4.7% 3 0.5 $38.0 0.8% 0.0% $4,606.5 2004 28.4% 28.1% 22.3% 3 0.3 $37.7 1.0% 0.0% $3,797.6 The standard fee schedule for the SmallCap Value product is 1.00% on the first $10 million, negotiable
thereafter. Westwood Management has been verified for the periods January 1, 2004 through
December 31, 2007 by Pricewaterhouse Coopers LLP. A copy of the verification report is available
upon request. The minimum portfolio size for inclusion in the SmallCap Value Composite is $5
million beginning 1/1/06. The SmallCap Value composite consists of taxable and tax-exempt,
fee-paying fully discretionary accounts whose main objective is to invest primarily in
equity securities with market capitalizations between $100 million and $2.5 billion and having comparable objectives. PERFORMANCE RESULTS: SMALLCAP VALUE COMPOSITE January 1, 2004 through December 31, 2008 Reporting Currency: USD Creation Date: January 2004 SMALLCAP VALUE COMPOSITE RETURNS Gross of Fees Net of Fees Russell 2000 Value ANNUALIZED RETURNS 1 Year (31.0) % (31.4) % (28.9) 2 Years (15.4) % (15.8) % (19.9) 3 Years (3.9) % (4.3) % (7.5) 4 Years (0.5) % (0.9) % (4.6) 5 Years 4.7 % 4.3 % 0.3 Since Inception (1/1/04) 4.7 % 4.3 % 0.3 CALENDAR YEARS 2008 (31.0) % (31.4) % (28.9) 2007 3.6 % 3.2 % (9.8) 2006 24.1 % 23.7 % 23.5 2005 10.5 % 10.1 % 4.7 2004 28.4 % 28.1 % 22.3 |
 AllCap Value Disclosure Information Year Gross of Fees Return Net of Fees Return Russell 3000 Value Number of Portfolios Dispersion Total Assets at End of Period Percentage of Firm Assets Total Firm Assets 2008 -34.5% -34.9% -36.3% 2 0.28 $21.3 0.3% $6,538.0 2007 11.5% 11.0% -1.0% 3 0.00 $39.0 0.5% $7,113.2 2006 20.0% 19.5% 22.3% 1 0.00 $18.5 0.3% $5,455.9 2005 16.0% 15.7% 6.9% 1 0.00 $12.5 0.3% $4,606.5 2004 19.5% 19.3% 16.9% 1 0.00 $2.5 0.1% $3,797.6 2003 28.6% 28.4% 31.1% 1 0.00 $96.8 2.5% $3,815.3 2002¹ -12.9% -13.0% -11.7% 1 0.00 $63.3 1.6% $4,014.6 1. Inception Date 7/1/02 The standard AllCap Value fee schedule is 0.80% on the first $10 million, negotiable thereafter. Westwood Management has been verified for the periods January 1, 1995 through December 31, 2007 by
Pricewaterhouse Coopers LLP. A copy of the verification report is available upon request. The AllCap Value Composite includes all taxable and tax-exempt, fee-paying fully discretionary
accounts generally invested in equity securities with market capitalizations greater than
$100 million at time of purchase and having comparable objectives. The minimum portfolio size for inclusion in the AllCap Value Composite is $5 million beginning 1/1/06.
PERFORMANCE RESULTS: ALLCAP VALUE COMPOSITE July 1, 2002 through December 31, 2008 Reporting Currency: USD Creation Date: July 2002 ALLCAP VALUE COMPOSITE RETURNS Gross of Fees Net of Fees Russell 3000 Value ANNUALIZED RETURNS 1 Year (34.5) % (34.9) % (36.3) % 2 Years (14.5) % (15.0) % (20.6) % 3 Years (4.3) % (4.7) % (8.3) % 4 Years 0.4 % 0.0 % (4.7) % 5 Years 4.0 % 3.6 % (0.7) % 6 Years 7.7 % 7.4 % 4.0 % Since Inception (7/1/02) 4.9 % 4.5 % 1.7 % CALENDAR YEARS 2008 (34.5) % (34.9) % (36.3) % 2007 11.5 % 11.0 % (1.0) % 2006 20.0 % 19.5 % 22.3 % 2005 16.0 % 15.7 % 6.9 % 2004 19.5 % 19.3 % 16.9 % 2003 28.6 % 28.4 % 31.1 % 2002¹ (12.9) % (13.0) % (11.7) % 1. Inception Date: 7/1/02 |
 Balanced Disclosure Information BALANCED BALANCED COMPOSITE RETURNS COMPOSITE RETURNS Gross of Fees Net of Fees 60% S&P500 / 40% LBG/C Gross of Fees Net of Fees 60% S&P500 / 40% LBG/C ANNUALIZED RETURNS CALENDAR YEARS 1 Year -18.5 % -19.0 % -21.9 % 2008 -18.5 % -19.0 % -21.9 % 2 Years -5.0 % -5.5 % -8.9 % 2007 10.8 % 10.1 % 6.3 % 3 Years 0.8 % 0.2 % -2.7 % 2006 13.4 % 12.7 % 10.9 % 4 Years 3.3 % 2.6 % -1.1 % 2005 10.9 % 10.2 % 4.0 % 5 Years 4.5 % 3.8 % 0.7 % 2004 9.4 % 8.8 % 8.3 % 6 Years 6.3 % 5.6 % 3.5 % 2003 16.1 % 15.3 % 18.8 % 7 Years 4.6 % 4.0 % 1.6 % 2002 -4.8 % -5.4 % -9.5 % 8 Years 3.9 % 3.3 % 0.9 % 2001 -1.1 % -1.7 % -3.7 % 9 Years 4.9 % 4.3 % 0.7 % 2000 13.3 % 12.4 % -0.9 % 10 Years 5.2 % 4.5 % 1.7 % 1999 7.6 % 7.0 % 11.4 % 11 Years 6.0 % 5.3 % 3.4 % 1998 14.0 % 13.2 % 21.4 % 12 Years 7.3 % 6.6 % 4.9 % 1997 23.6 % 22.8 % 23.7 % 13 Years 8.1 % 7.4 % 5.6 % 1996 17.5 % 16.8 % 14.7 % 14 Years 9.5 % 8.8 % 7.2 % 1995 30.5 % 29.4 % 30.0 % 15 Years 8.9 % 8.2 % 6.7 % 1994 0.3 % -0.2 % -0.6 % 16 Years 9.3 % 8.6 % 6.9 % 1993 15.7 % 14.8 % 10.5 % 17 Years 9.2 % 8.5 % 7.0 % 1992 8.0 % 7.5 % 7.7 % 18 Years 10.0 % 9.3 % 7.9 % 1991 23.2 % 22.6 % 24.8 % 19 Years 9.5 % 8.8 % 7.5 % 1990 1.1 % 0.5 % 1.6 % 20 Years 10.2 % 9.5 % 8.3 % 1989 24.7 % 24.1 % 24.6 % 21 Years 10.5 % 9.8 % 8.5 % 1988 15.9 % 15.2 % 13.0 % 22 Years 10.3 % 9.7 % 8.4 % 1987 8.0 % 7.5 % 5.5 % Since Inception (1/1/87) 10.3 % 9.7 % 8.4 % Year Gross of Fees Return Net of Fees Return 60% S&P 500/40% LBG/C Number of Portfolios Dispersion Total Assets at End of Period Percentage of Firm Assets Total Firm Assets 2008 -18.5% -19.0% -21.9% 2 0.1 $28.9 0.4% $6,538.0 2007 10.8% 10.1% 6.3% 3 0.2 $65.0 0.9% $7,113.2 2006 13.4% 12.7% 10.9% 3 0.2 $57.6 1.1% $5,455.9 2005 10.9% 10.2% 4.0% 3 0.2 $49.5 1.1% $4,606.5 2004 9.4% 8.8% 8.2% 4 0.1 $73.5 1.9% $3,797.6 2003 16.1% 15.3% 18.8% 3 0.2 $48.5 1.3% $3,815.3 2002 -4.8% -5.4% -9.5% 5 0.5 $87.0 2.2% $4,014.6 2001 -1.1% -1.7% -3.7% 6 0.3 $164.1 4.1% $4,022.9 2000 13.3% 12.4% -1.0% 5 0.2 $100.8 2.8% $3,551.7 1999 7.6% 7.0% 11.5% 6 0.5 $96.8 4.2% $2,314.8 1998 14.0% 13.2% 21.5% 6 0.3 $97.4 4.8% $2,049.7 1997 23.6% 22.8% 23.7% 4 0.2 $49.5 3.0% $1,676.4 1996 17.5% 16.8% 14.8% 5 0.1 $46.5 4.9% $940.6 1995 30.5% 29.4% 30.0% 5 0.5 $33.4 4.7% $716.4 Creation Date: January 1994 Reporting Currency: USD PERFORMANCE RESULTS: BALANCED COMPOSITE January 1, 1995 through December 31, 2008 A composite of taxable and tax-exempt, fee-paying fully discretionary accounts invested in LargeCap
Equity and investment grade fixed income securities and having comparable objectives The typical
allocation for the composite is 60% equity and 40% fixed income. The minimum portfolio size for inclusion in the Balanced Composite is $5 million beginning 1/1/06.
The standard fee schedule for the Balanced product is 0.625% on the first $25 million,
negotiable thereafter. Westwood Management has been verified for the periods January 1, 1995
through December 31, 2007 by Pricewaterhouse Coopers LLP. A copy of the verification report is
available upon request. |
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Return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars,
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performance figures associated with its three-, five- and ten-year Morningstar Ratings metric. As of 12/31/2008, WHGIX was rated among 962 Moderate Allocation funds in the last three years and received an overall Morningstar Rating of 5 stars; WHGMX was rated among 423 Mid Cap Blend funds in the last three years and received an overall Morningstar Rating of 5 stars. Morningstar© Disclaimer |
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