companies in our fully invested, concentrated portfolio
billion minimum market capitalization at initial purchase**
year track record
billion CV assets under management as of 9/30/2023
billion AUM capacity, assuming no net inflows into other strategies
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Guides
Philosophy
- Fundamentals drive stock prices
- Capital preservation improves returns
- Culture shapes investment decisions
-
Shapes
Process
- Thorough, proprietary research by career analysts
- Focus on valuation and risk controls
- Team environment – group discussion/analyst decision
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Generates
Portfolio
- Long-term/low turnover
- Fully invested/limit on cash
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Performance
- Consistent pattern of results
- Objective: Outperform the benchmark over the longer term
Concentrated Value
Quarter 3 2023
Equity Composite Performance
- Cooke & Bieler - Gross of Fees
- Cooke & Bieler - Net of Fees
- Russell 3000® Value Index
Quality Characteristics1
- C&B Concentrated Value†
- Russell 3000® Value Index*
| ROC 5 Year Avg | Cash Interest Coverage | Debt/EBITDA | Forecasted P/E (Wtd. Harm. Avg.) | P/Normalized Earnings (Wtd. Harm. Avg.) |
|---|---|---|---|---|
| 13.3% | 7.0x | 3.0x | 11.8x | 10.4x |
| 7.1% | 5.6x | 3.0x | 15.3x | - |
| ROC 5 Year Avg | 13.3% | 7.1% |
|---|---|---|
| Cash Interest Coverage | 7.0x | 5.6x |
| Debt/EBITDA | 3.0x | 3.0x |
| Forecasted P/E (Wtd. Harm. Avg.) | 11.8x | 15.3x |
| P/Normalized Earnings (Wtd. Harm. Avg.) | 10.4x | - |
Portfolio Attributes1
- C&B Concentrated Value
- Russell 3000® Value Index
| # Holdings | Market Cap ($B) Range | Market Cap ($B) (Wtd. Avg.) | Annual Turnover |
|---|---|---|---|
| 20 | 1.8 - 404.7 | 64.9 | 58% |
| 2,293 | 0.0 - 760.6 | 130.2 | - |
| # Holdings | 20 | 2,293 |
|---|---|---|
| Market Cap ($B) Range | 1.8 - 404.7 | 0.0 - 760.6 |
| Market Cap ($B) (Wtd. Avg.) | 64.9 | 130.2 |
| Annual Turnover | 58% | - |
Top 10 Holdings1
| Brookfield | 8.8% |
| AerCap | 6.3% |
| State Street | 6.1% |
| Fidelity National Financial | 6.0% |
| Philip Morris | 6.0% |
| Chubb | 5.7% |
| Johnson & Johnson | 5.0% |
| Medtronic | 5.0% |
| Globe Life | 4.9% |
| ConocoPhillips | 4.6% |
Top 10 Holdings1
| Brookfield | 8.8% |
| AerCap | 6.3% |
| State Street | 6.1% |
| Fidelity National Financial | 6.0% |
| Philip Morris | 6.0% |
| Chubb | 5.7% |
| Johnson & Johnson | 5.0% |
| Medtronic | 5.0% |
| Globe Life | 4.9% |
| ConocoPhillips | 4.6% |
Sector Weights1
- C&B Concentrated Value
- Russell 3000® Value Index
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Communication Services
C&B Concentrated Value — Russell 3000® Value Index 4.9% -
Consumer Discretionary
C&B Concentrated Value 11.0% Russell 3000® Value Index 5.3% -
Consumer Staples
C&B Concentrated Value 6.0% Russell 3000® Value Index 8.0% -
Energy
C&B Concentrated Value 4.6% Russell 3000® Value Index 9.3% -
Financials
C&B Concentrated Value 39.4% Russell 3000® Value Index 20.8% -
Health Care
C&B Concentrated Value 17.7% Russell 3000® Value Index 14.9% -
Industrials
C&B Concentrated Value 14.2% Russell 3000® Value Index 13.2% -
Information Technology
C&B Concentrated Value 4.6% Russell 3000® Value Index 9.0% -
Materials
C&B Concentrated Value — Russell 3000® Value Index 4.8% -
Real Estate
C&B Concentrated Value — Russell 3000® Value Index 5.0% -
Utilities
C&B Concentrated Value — Russell 3000® Value Index 4.8% -
Cash
C&B Concentrated Value 2.7% Russell 3000® Value Index —
Additional Cooke & Bieler Concentrated Value Disclosures
Concentrated Value Equity Composite
| Year | Total Return Gross of Fees (%) | Total Return Net of Fees (%) | Russell 3000® Value Index (%) | Russell 3000® Value Index 3-Yr Std Dev (%) | Composite 3-Yr Std Dev (%) | Composite Dispersion (%) | Market Value ($Millions) | Total Firm Assets ($Millions) | # of Portfolios |
|---|---|---|---|---|---|---|---|---|---|
| 7/1/15-12/31/15 | (1.61) | (2.06) | (3.64) | - | <3 Years | N/M | 1.9 | 4,804.9 | <5 |
| 2016 | 20.75 | 19.71 | 18.40 | - | <3 Years | N/M | 2.4 | 5,303.4 | <5 |
| 2017 | 21.10 | 20.07 | 13.19 | - | <3 Years | N/M | 2.8 | 5,912.3 | <5 |
| 2018 | (6.75) | (7.60) | (8.58) | 11.05 | 13.73 | N/M | 2.6 | 5,084.6 | <5 |
| 2019 | 46.58 | 45.43 | 26.26 | 12.01 | 15.90 | N/M | 10.0 | 9,757.1 | <5 |
| 2020 | 8.80 | 7.87 | 2.87 | 19.95 | 25.15 | 1.10 | 67.2 | 9,540.8 | 7 |
| 2021 | 30.18 | 29.15 | 25.37 | 19.34 | 24.36 | 0.54 | 662.0 | 11,942.6 | 8 |
| 2022 | -15.80 | -16.54 | -7.98 | 21.53 | 25.34 | 0.16 | 1,078.6 | 10,678.1 | 8 |
The Cooke & Bieler Concentrated Value Equity Composite has been examined for the period from January 1, 2018 through December 31, 2022. The examination report is available upon request.
The Cooke & Bieler Concentrated Value Equity Composite (Composite) whose inception date is July 1, 2015, includes all fully discretionary, fee paying, concentrated value equity portfolios managed for a full month. For investment purposes, we generally define concentrated portfolios as those consisting of 15 – 25 holdings. Holdings in this strategy generally have a market capitalization within the range of the Russell 3000® Index at initial time of purchase. Securities are selected using the firm’s fundamental, bottom-up approach. Portfolios are more concentrated and a subset of the All Cap Value Model Strategy. The Composite was created in August 2015.
The standard fee agreement is 0.85 of 1% per annum on the first $25 million, 0.70 of 1% per annum on the next $25 million, and 0.60 of 1% per annum on the balance, however fees are negotiable. Net of fee returns are calculated quarterly by deducting one quarter of the model fee rate for the respective period from the gross of fee Composite return. The Composite includes accounts that pay performance-based fees.
For comparison purposes, the composite is measured against the Russell 3000® Value Index. The Russell 3000®Value Index returns are provided to represent the investment environment existing during the time periods shown and are not covered by the report of independent verifiers. FTSE Russell is a subsidiary of London Stock Exchange Group (LSEG) and is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of FTSE Russell Indexes.
Cooke & Bieler Additional Disclosures
Notes:
- Cooke & Bieler, L.P. claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Cooke & Bieler has been independently verified for the periods January 1, 1993 through December 31, 2022. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite maintenance as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm‐wide basis. Verification does not provide assurance on the accuracy of any specific performance report.
- The Firm is defined as Cooke & Bieler, L.P., an independent investment management firm and is registered as an investment adviser under the Investment Advisers Act of 1940. Registration does not imply a certain level of skill or training.
- Rates of return are expressed in U.S. dollars. Portfolios are valued monthly on a trade date basis. Portfolio returns reflect the reinvestment of dividend and interest income.
- Performance returns are presented both gross and net of fees. Gross of fee returns do not reflect the deduction of investment advisory fees. Individual client returns will be reduced by investment advisory fees and other expenses that it may incur in the management of its investment advisory account. Investment advisory fees are described in Part 2A of Form ADV. On an exception basis, the actual fee charged may depend on the asset size, client location and type of portfolio.
- The dispersion is measured using an asset weighted standard deviation of portfolio gross returns represented within the Composite for the full year. For those annual periods with less than five portfolios included for the entire year, dispersion is not presented as it is not considered to be meaningful.
- A list of composite descriptions is available upon request. Policies for valuing investments, calculating performance, and preparing GIPS Reports are also available upon request.
- For comparison purposes, each index is fully invested and includes the reinvestment of income. The returns for each index do not include any transaction costs, management fees or other costs.
- The three-year annualized ex-post standard deviation measures the variability of the composite (using gross returns) and the benchmark for the preceding 36-month period. The three-year annualized ex-post standard deviation is not required to be presented for periods when 36 monthly composite returns are not available.
- GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.
- Past performance is not indicative of future results. All investing involves risk, including loss of principal.
Strategy Commentary
Download Commentary
Markets continued their upward trend early in the third quarter, though rising oil prices and the prospect of persistently higher interest rates ultimately sapped investor optimism and pushed major indices down modestly for the full three-month period.
Cooke & Bieler’s Concentrated Value Strategy outperformed the Russell 3000® Value Index for the third consecutive quarter, posting a -2.05% return gross of fees (-2.26% net of fees) against a -3.15% return for the Index.