HomeMy WebLinkAbout2007 01 31 Document Given To Board Members On 01/25/07 For Regular 302 - Renaissance Investment Mgmt.Date: January 31, 2007
THE FOLLOWING DOCUMENT WAS
GIVEN TO THE BOARD OF TRUSTEE
MEMBERS ON JANUARY 25, 2007
REGARDING REGULAR AGENDA
ITEM 302.
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To:
From:
Re:
DEPARTMENT OF GENERAL SERVICES
MEMORANDUM
January 25, 2007
Board of Trustees
Kevin Smith, General Services Director
BOT January 31, 2007 Meeting
I. Investment Manger RFP
Enclosed please find presentation materials for each firm scheduled for interview for
Investment Manager Services to the City's Defined Benefit Pension Plan. Also
enclosed is a sample contract for Investment Manager Services as prepared by
Bogdahn Consulting.
Interview schedule is as follows:
Date: Wednesday, January 31, 2007
Time: 5:00 PM
Location: East Training Room, City Hall
Time Manager
5:15 p.m. DG Capital
5:45 p.m. Lateef Asset Mgmt. •
6:15 p.m. Renaissance Investment Mgmt
6:45 p.m. Fifth Third Asset Mgmt.
7:15 p.m. Oppenheimer Capital
7:45 p.m. Snow Capital Mgmt
8:15 p.m. Galliard Capital Mgmt.
8:45 p.m. MBIA Asset Mgmt.
Mandate
Broad Growth
Broad Growth
Broad Growth
Broad Value
Broad Value
Broad Value
Domestic Fixed Income
Domestic Fixed Income
• Presentation materials were due to City Hall by 5:00 PM on January 24,
2007. Lateef Asset Mgmt. did not submit materials by this deadline, nor
have they been received as of the date of this memo. Staff and Bogdahn
Consulting are contacting representatives from Lateef to discuss this issue.
We will transmit materials from Lateef as soon as they are received.
Each firm has been allotted 20 minutes for their presentation and 10 minutes for
questions.
II. SunTrust 4th Quarter 2006 Report
Additionally, enclosed please find SunTrust's Fourth Quarter 2006 Report for your
review. Due to the full schedule for this meeting, SunTrust was asked not to present
their report.
cc: City Manager
Finance Director
U:\docs\word\Memos KLS\BOT Investment Manager IV.doc
Renaissance
Large Cap Growth Strategy
Prepared for:
City of Winter Springs
Employees' Pension System
January 31, 2007
'ssance'
Investment Management
The Baldwin Center, Suite 1200 - 625 Eden Park Drive .Cincinnati, OH 45202
1-800-837-3863 .513-723-4500 . FAX: 513-723-4512 . www.reninv.com
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enaissance'
Investment Management
Table of Contents
I. Requested Information
II. Attachments
III. Presentation
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Due Diligence Questionnaire For
Large Cap Growth
Prepared for:
City of Winter Springs
Em to ees' Pension S stem
P Y Y
January 24, 2007
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I~~naissance'
In`~estment A4anagement
The 6aldwin Genies, Suiie 12~J~7 - 525 Ewen Park Drive . Gincinnat+, OH <5202
f-<~i3'".,-ti°-3?-3883 . 513-723-4 . F.~.7C 583723~451~ . wrvwsenirnr.
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I. FIRM BACKGROUND
1. Please provide the following contact information:
Name: Jennifer Trowbridge
Title: Director of Client Services
Address: 625 Eden Park Drive. Suite 1200, Cincinnati, OH 45202
Email Address: jct@reninv.com
Phone Number: 513 723 4574
Facsimile Number: 513 723 4511
Firm's Internet (www) Address: www.reninv.com
' 2. Please give a brief history of the firm. Include the date the firm was
founded, and how long the current portfolio management team has been
together. Include any special expertise or experiences that would be
relevant to the board.
Renaissance was founded in 1978 by Frank Terrizzi and William Miller as a Cincinnati-
based investment adviser, which managed tactical asset allocation strategies to
institutional and individual clients.
In 1995, Renaissance partnered with Affiliated Managers Group (AMG) to buy out
Terrizzi and Miller. As part of this transaction, Paul Radomski and Mike Schroer
purchased an equity stake and took over the day-to-day control of the organization's
operations. At that time, Schroer and Radomski had two other partners (who
I performed marketing functions), both of whom have since left Renaissance. In 2001
The Renaissance Group LLC was formed by a merger of Renaissance Investment
Management and Bowling Portfolio Management.
In 2003, five Renaissance employees (including Mr. Schroer and Mr. Radomski)
purchased equity interests or additional equity interests in Renaissance Investment
Management from Affiliated Managers Group, Inc. After giving effect to these
transactions, Affiliated Managers Group owns 70% of the firm with 30% being held
by the five Renaissance partners. The firm is structured as a partnership and offers
Large Cap Growth, Mid Cap Growth, Small Cap Growth, SMID Growth and
International equity products, as well as Balanced and Tactical Asset Allocation
portfolio management services.
In December 2004, the Bowling Portfolio Management division of The Renaissance
Group was spun off.
Michael E. Schroer, Managing Partner and Chief Investment Officer, has been the
lead portfolio manager for the Large Cap Growth strategy since its inception in 1991.
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3. State whether the firm is a subsidiary of, or related in any way to a
brokerage firm, insurance company, bank or other entity. If applicable,
please describe any material relationship (financially or otherwise) with any
other entity.
Renaissance is an affiliate of Affiliated Managers Group. Complete day-to-day control
' of investment management and operations is maintained by local management. AMG
offers marketing, distribution and legal assistance to Renaissance.
4. Explain in detail any potential conflicts of interest that would be created by
your firm's serving the Pension Fund.
None.
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5. Please state the percentage of the firm owned by the employees. List the
owners of the firm (from largest to smallest with respect to ownership) and
their ownership percentages.
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Michael Schroer, CFA Managing Partner, 13.5%
Chief Investment Officer
Paul Radomski, CFA. Managing Partner 13.5%
Joe Bruening, CFA Partner 1.0%
Mary Meiners Partner _ _ 1.0%
Sudhir Warrier Partner 1.0%
Affiliated Managers Group (AMG) Boston-Based Holding Company 70.0%
_._.
6. Please provide an organizational chart of your firm.
Please refer to Exhibit I.
7. List the key management people within the firm, along with the number of
years with the Firm and the number of years of investment industry
experience
~• •-
Managing Partner, University of
Michael Schroer Chief Investment 25 23 BBA, MBA, CFA Cincinnati /Indiana
Officer University
Paul Radomski Managing Partner 20 20 BS, CFA, CPA Miami University
University of
Joe Bruening Partner 18 9 BBA, MBA, CFA Cincinnati / Xavier
Universit
Mary Meiners Partner 27 24
Sudhir Warrier Partner 13 13 BS Madurai Kamaraj
Universit
8. State the number of investment managers employed by the firm.
Three
9. How are the portfolio manager(s) and analyst team compensated? On what
basis are bonuses determined?
Each portfolio manager is either a Managing Partner or Partner in the firm. Partners
receive distributions from the company, representing a set percentage of the
revenues. Additionally, each Managing Partner is compensated through an equal
share of the bottom line profits of the organization. There are no current or planned
incentive arrangements.
All other employees are compensated via salary and bonus arrangements. Bonuses
are paid based upon achievement of specific company and individual goals.
Compensation is not tied to client account returns in any capacity.
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lO.Over the last twelve months, has there been any change in the management
team?
No.
11.Are there changes in the ownership of the firm anticipated over the next
twelve months?
No.
12.During the last three years how many investment professional employees
have left the firm? Please state the reason.
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13.Please provide the number of institutional accounts lost in the past five
years and the reason for the loss. Additionally, how many clients does the
firm have as of the most recent quarter-end?
At December 31, 2006 accounts totaled 1,076 (Preliminary)
~ 177 ~ 56 ~ 74 ~ 98 ~ 73
Account losses are attributed to a variety of reasons including change in the client's
asset allocation, closure of the client's defined benefit plan, or an overall acquisition
of the client by a third party.
14.Provide the coverage amount of your Errors and Omission (E&O) insurance
policy and the name of the insurance carrier.
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15.Have there been any claims paid against the E&O policy in the last 18
months? If so, please state the amount paid and the nature of the claim.
No.
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16.Has your firm ever been cited by any regulatory agency that resulted in a
1 fine, cease & desist order or other disciplinary action? If so, please explain.
No.
17. List all office locations and the number of individuals working in each office.
Specify which office would primarily serve the Pension Board.
Renaissance Investment Management maintains one office, which is located in
Cincinnati, Ohio. All functions are handled from this location. Employees at December
31, 2006 totaled 23.
18.Please provide by calendar year for the trailing five years the firm's total
assets under management (AUM), the total number of accounts and the
percentage of assets by strategy and client type (i.e., public, corporate, high
net worth)? What is the firm's total AUM as of the most recent quarter-end?
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Total AUM mm 2852.6 947.1 585.5 415.7
Total # of Accts 960 735 489 447
% of Assets b Strate
3 Wa Tactical 9% 22% 45% 57%
Balanced 2% 5% 8% li%
E uit Core 3% 6% 0% 1%
International 2% 3% 2% 2%
Lar e Ca Growth 50% 39% 27% 22%
Mid Ca Growth 1% 1% 1% 1%
Small Ca Core - SR 8% 0% 0% 0%
Small Ca Growth 24% 20% 1% 5%
SMID Growth 1% 1% 1% 0%
Other 1% 2% 2% 2%
% of Assets b Client T e:
Cor orate 20% 30% 39% 36%
E & F 3% 3% 4% 5%
Individual 8% 16% 20% 24%
Mutual Fund 14% 9% 0% 0%
Public Funds 8% 7% 16% 15%
Taft Hartle i% 1% 0% 0%
Wra Pro ram 46% 34% 21% 20%
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II. THE INVESTMENT PRODUCT ~ PROCESS
Name of the Investment Product: Large Cap Growth
' 1. What index is the best performance benchmark for the strategy and why?
Russell 1000 Growth. The most appropriate benchmark is the Russell 1000 Growth
Index. Our stock selection process begins with a universe of the 1,000 largest U.S.
' companies. This universe is then screened to identify those companies with above-
average historical rates of profitability and strong financial characteristics. This initial
screening process highlights only those companies with successful business records
and strong operating results.
2. State whether the firm offers a commingled fund for any or all of your
products. If yes, please indicate which products have a commingled fund and
the fee associated with that product.
' We do not offer commingled funds.
3. How would this product be delivered (i.e., separate account or
commingled)? In addition, please provide the fee schedule.
Our Large Cap Growth product would be delivered as a separate account.
The fee schedule is as follows:
First $5 million 0.75%
Next $5 million 0.70%
Next $5 million 0.65%
Next $5 million 0.60%
Amounts over $20 million 0.55%
rovide a brief statement describin the firm's a roach to this engagement.
4. P 9 pP
Renaissance is a conservative, high quality growth manager. At Renaissance, we
believe that the utilization of disciplined and systematic methods for identifying
attractive growth companies with business and earnings momentum and trading at
1 reasonable valuations will result in superior returns over time.
We believe that portfolio management is partly art and partly science. We employ
advanced quantitative tools and techniques to help us identify superior companies
' and superior investment opportunities. While much about investing can be
quantified, much cannot. Ongoing research, in the form of both security selection
and enhanced quantitative methods, is integral to our continuing success
' S. Indicate who will be managing the account and provide the number of years
managing the strategy, the number of years with the firm, and the number
1 of years of investment industry experience
Michael Schroer, Chief Investment Officer is responsible for the management of the
Large Cap Growth strategy and has been the portfolio manager since inception of the
' strategy in 1991 (16 years). Mr. Schroer has been with the firm for 23 years and has
25 years industry experience.
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6. State the number of accounts and asset size of the accounts run by the
manager(s).
From an investment standpoint, all Large Cap Growth accounts are managed by the
strategy's portfolio manager, Michael Schroer. Operationally, each account is
assigned a Relationship Manager as well as a Portfolio Administrator. The Portfolio
Administrator is responsible for monitoring the account on a daily basis. This involves
such matters as ensuring all trades settle properly and reconciling custodial
statements. The Large Cap Growth portfolio manager works closely with this group to
ensure the goals and wishes of the client are met. Each Relationship Manager is
assigned 50-100 relationships.
7. Please provide (in a spreadsheet) the GICS equity sector allocation for the
product by quarter relative to the benchmark index for the trailing three-
year period (for a fixed income portfolio use the format outlined below).
Agency ~ Treasury I MBS ~ ABS ~ Credit ~ AAA ~ AA ~ A i BBB ~ Le BBB an f Dur tion
Please refer to Exhibit II, GICS Sector Allocation tab.
8. Please provide (in a spreadsheet) the market capitalization allocation of the
equity portfolio by quarter for the trailing three-year period, using the
following breakpoints: < $1 B, $1 B to $5 B, $5 B to $10 B, $10 B to $20 B,
$20 B to $50 and > $50. Additionally, please provide the product's weighted-
average market capitalization for each period.
Please refer to Exhibit II, Market Cap Allocation tab.
9. Please describe the investment process for the product. Include specifics,
such as how the initial universe of investable securities is defined, the
screening process (fundamental, top down, quantitative), the buy and sell
decision process, whether there is a targeted tracking error to the
benchmark, number of holdings, and maximum sector and security
positions, the use of leverage, etc.
Investment Process
Our investment style is best described as growth at a reasonable price. Our
disciplined approach to selecting stocks and building portfolios has been a strong
contributor to the performance we have achieved. Our investment process consists of
the three distinct stages.
1. Profitability & Financial Strength Analysis: Our stock selection process begins with
a universe of the 1,000 largest U.S. companies. This universe is then screened to
identify those companies with above-average historical rates of profitability and
strong financial characteristics. This initial screening process highlights only those
companies with successful business records and strong operating results.
2. Multi-Dimensional Ana/ysis: Typically, we are then left with approximately 400-
500 companies that are given further consideration. These companies are subjected
to a rigorous quantitative scoring process whereby each is analyzed and ranked on
the basis of historical growth, future earnings expectations and valuation. The end
result of this analysis is a composite ranking. Only the top 20% of companies in this
composite ranking are eligible for further review.
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3. Qualitative Analysis: At this point, our analysis becomes purely qualitative. Our
analysts examine each company ranked in the top 20% considering their company
fundamentals, business momentum, and management strategy, as well as many
other factors. We utilize outside research sources as well as our own analysis in this
effort. Only the most attractive companies on the basis of this further qualitative
review are then finally selected for client portfolios. Our scoring process also serves
as a very effective sell discipline. Any issue falling below the top 40%, on the basis of
our scoring process, is considered an automatic sale candidate, and triggers our sell
' discipline. This discipline results in companies being sold in favor of more attractively
ranked companies.
Portfolios typically hold 50-60 positions, equal-weighted at time of purchase. The
' maximum sector allocation is 40%. The maximum security position at market is
twice its initial equal weight.
Buy/Sell Discipline
Buy Discipline: Each new client portfolio is built from the Buy List, with each security
equal weighted in the portfolio. Full positions are bought in all accounts at the time
the new security is added. The firm routinely rebalances holdings whenever a stock
' reaches a double weight (twice its cost basis). The proceeds are reinvested in other
securities currently in the portfolio that are underweighted. All new purchases must
come from the Buy List.
Sell Discipline: We do not set prices targets when selling a stock. Rather our
quantitative scoring process serves as a very effective sell discipline. Any issue falling
below the top 40% on the basis of our scoring process, is considered an automatic
' sale candidate, and triggers our sell discipline. This discipline results in companies
being sold in favor of more attractively ranked companies. Once the decision is made
to sell, we liquidate the entire position in all accounts.
l0.How long has the investment style stated in the above questions been in
place without deviation?
' Since inception of the product, 1991.
' 31.Describe the investment environments in which your approach can be
expected to outperform its benchmark/style peers, and under-perform its
benchmark/style peers.
1 Over time, we expect to perform well when the market does not have a sustained
bias towards either growth or value investing. Since we employ a CARP approach, if
the market overly favors one style over the other, we may tend to underperform;
however, over the length of a typical market cycle, the Large Cap Growth Strategy
has offered the opportunity for attractive returns on a risk adjusted basis.
12.Are model portfolios incorporated in the management of the strategy?
A model portfolio is used for the strategy. We strive to invest each account as closely
' to the model portfolio (i.e. Buy List) as possible. Each account purchases only stocks
from our Buy List and all sells as done in each account at the same time. Using
account information derived from our accounting system, we routinely rebalance
holdings whenever a stock reaches a double weight. InData can rebalance existing
1 portfolios electronically. For example, in a 50 stock portfolio, any position hitting a
4% weighting within the portfolio will be trimmed back to its initial 2% weighting,
with the proceeds reinvested in other securities currently in the portfolio that are
' underweighted. All new purchases must come from the Buy List. Reports are
routinely generated and reviewed by the portfolio management team to check
compliance with these decision rules. Additionally, performance for each account is
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checked quarterly for its deviance from the reported composite results for the
respective strategy.
13.Describe the use of cash in the investment process. What range of cash is
typical? Do you equitize the cash holding to enhance returns? Do you have a
policy for staying fully invested? If so, what is your definition of fully
invested? If you are not always fully invested, what factors lead you to hold
cash? Is there a maximum amount of cash you are likely to hold?
We are fully invested at all times, so cash % will be marginal, less than 2%.
14.Is there a policy regarding industry or sector diversification? What is the
maximum concentration allowed in a single industry or sector? To what
extent might you have large concentrations in specific industries?
There is a maximum of any one sector at 40%. We do not attempt to match sector
weights versus our benchmark. Our process is a bottom up approach whereby we
pick the best stocks from our initial universe. We do not target particular sectors, but
rather construct our portfolios such that no one sector is more than 40%. As such,
we may be over or under weighted in certain sectors at any given time.
15.Detail the account turnover and trading costs. Does the firm employ a
specialized trading procedure? If so please explain.
Annual turnover ranges from 80-100%. We currently monitor all swaps and record
trading statistics such as VWAP and length of time to complete trade. We currently
utilize a transaction cost analysis product called T-Cost Pro to breakdown execution
costs. This software allows us to analyze trades on T+1 basis.
16.To what extent are derivatives utilized.
We do not use derivatives.
17.What methods do you use to insure "best price and execution" in trading?
The trader is responsible for ensuring that our clients receive "Best Execution." In
1 general terms, the trader is responsible for purchasing and selling securities in the
most efficient manner possible and with the least amount of market impact. This
dynamic process involves continual market monitoring and feedback from sell-side
' trading desks. The trader is able to use various tools such as an electronic "DOT"
interface as well as access to DMA aggregators such as Instinet, UNX and SONIC.
Orders are only worked during regular market hours, as we feel market liquidity
outside normal hours is usually insufficient to warrant trading. We monitor trading
statistics such as time to complete and Volume Weighted Average Price. We also
employ a third party software package to analyze and measure transaction costs on a
T +1 basis.
18.What criteria does our firm use to determin
y e that there is sufficient
' liquidity for the firm's total position in a stock?
We only purchase securities which have sufficient liquidity to construct portfolios with
full positions.
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19.Please provide, by calendar year for the trailing five years, the assets under
management and the number of accounts in the investment product.
2006* $4,470.4 382
2005 $1,412.7 297
2004 $369.0 189
2003 $160.1 124
2002 $91.4 115
2001 $119.2 144
* =Preliminary
20.State whether your firm participates in any brokerage wrap programs. State
whether the firms proposed product is included.
We participate in a number of wrap programs. Our Large Cap growth product is
included in eight of these programs.
III. RESEARCH
' 1. How do you obtain your research (in-house or third party)? What percentage
of research is generated internally?
Our investment process entails both quantitative and qualitative reviews, utilizing
' both internal and external research. In general, our quantitative effort represents
70% of our research, while 30% is derived from qualitative functions. These
qualitative aspects include use of Wall Street research and fundamental analysis. In
' general, our quantitative and qualitative reviews enable us to make effective buy and
sell decisions. The direct output of our internal research is the proprietary
quantitative models we employ in managing portfolios.
2. Please describe how your firm obtains and pays for outside research reports.
External Street research is accessed primarily via FirstCall and TheMarkets.com.
' These services are paid with soft dollars generated with trading commissions.
' 3. Please name the three primary sources of data and/or analyses upon which
your firm relies.
The three primary sources of data are FactSet, Compustat and FirstCall.
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IV. MISCELLANEOUS
1. Please state whether you are willing to acknowledge that you are a fiduciary
of the fund as defined in the Employee Retirement Income Security Act of
1974 ("FRIBA") and, for Florida Public Programs: Section 112.656, Florida
Statutes.
' We acknowledge that we are a fiduciary as defined in the Employee Retirement
Income Security Act of 1974 ("FRIBA") and Section 112.656, Florida Statutes.
2. Please state whether you agree that the agreement shall be construed under
the laws of the State in which the prospective client resides and federal law
where applicable.
We concur that the agreement shall be construed under the laws of the state of
Florida and federal law where applicable.
' 3. Please state whether you agree to venue for any judicial proceeding to be in
the county in which the Board sits.
We agree to venue for any judicial proceeding to be in the county in which the Board
sits.
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Investment Management
Renaissance
Executive Committee
Paul Radomski, Mike Schroer, Jeff Murphy (AMG)
Corporate Administration
Kevin J. Patton, Chief Compliance Officer
Marilyn Bcrkemeyer, Director of Accounting
& Flmnan Resources
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Legal & Compliance
AMG Centralized Compliance
(6 professionals)
071101
Operations
Sudhir Warrior, COO
PortFolio Administration
Peg Foster
Steve Frakcs
Julia Freedman
Prceti Kapoor
Candice Suttmiller
Anthony Glickhouse
Brittany Eaton
Neclam Saboo
Client Support
Jana Thomas
Sheila Matthews
Stacey Costello
Joyce Barker
Investment Committee
Mike Schroer, CIO
Paul Radomski
Joe Bruening
Mary Meiners
Portfolio Managers
Mike Schroer
Paul Radomski
Joe Bruening
Analysts & Traders
Eric Strange
Scott Mlynek
Mary Meiners
Katie Clay
Mike Shields
Marketing & Client Service
Jennifer Trowbridge, Director of
Client Services
Lisa Kenford, Client Services Associate
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Wrap Program Marketing
Managers Investment Group
(26 professionals plus support staff)
enaissance~
Investment Management
Renaissance Large Cap Growth Portfolio Sector Allocation relative to Russell 1000 Growth
Over/Underweight in % vs. Russell 1000 Growth
4Q06 3Q06 2Q06 1Q06 4Q05 3Q05 2Q05 1Q05 4Q04 3Q04 2Q04 iQ04 403 303 203 1Q03
Consumer Discretionary (0.4); (4.7)'! (7.5) (6.3) 1.8 ' 8.3 12.4 15.9 12.4 18.9 21.1 19.6 22.3 21.6 17.0 11.6
!Consumer Staples (1.8) (2.1) (2.2) (9.8) (10.1) (12.3) (10.7) (9.1) (6.7) (10.1) (11.9) (12.7) (12.1) (12.6) (13.0)' (14.6)
Energy (0.3) 3.7 4.0 4.9 4.6 3.5 1.4 0.7 4.7 5.8 5.1 0.7 (1.2) 3.0 4.5 1.0
Financials (1.1 )' (0.4); 1.4 1.3 (2.2) (2.2) (2.1); (6.5), (7.5)' (5.2) (1.2) 0.5 (3.4) (2.6) (6.6)' (4.8)
Health Care 0.3 0.4 (2.0)' 3.2 5.8 4.0 5.5 (1.7)', 3.5 (6.7) (13.8) (10.2)I (5.4)' (3.8) (4.6) (2.8)
:Industrials 4.8 6.7 3.0 0.9 (1.2) (2.6)', (4.9) (0.7) (0.9) 1.9 0.5 (2.9) (0.9) (3.4) (7.1); (0.9)
Information Technology (4.0)' (5.9) (1.2), 5.7 2.3 2.5 (0.2) 1.9 (3.1) (2.1), 2.6 6.9 2.5 , (2.5) 9.2 ' 11.7
Materials 2.6 ' 4.7 6.8 1.5 0.3 0.3 (0.2) 0.7 (1.2) (1.3) (1.1) (0.9) (1.0) 1.0 1.2 (0.6)
.Telecommunication Services 1.2 (0.9)' (0.9) (0.7) (0.7) (0.6) (0.6) (1.0) (1.0) (1.2) (1.1 )' (0.9) (0.8) (0.7) (0.7) (0.6)
'.Utilities (1.4)! (1.4)' (1.4); (0.6)! (0.6) (0.7): (0.6); (0.2)! (0.2)' (0.1)' (0.1)' (0.1) (0.1) (0.1) (0.1) (0.0)
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enaissance~
Investment Management
Renaissance Large Cap Growth Market Capitalization Allocation
Market Cap 4Q06 3Q06 206 1D06 4Q05 3Q05 2D05 1Q05 4Q04 3Q04 204 104 403 303 2Q03 1Q03
> $50B 29% 30% 32% 25% 22% 19% 22% 20% 25% 23% 15% 6% 8% 12% 6% 5%
$208-$508 17% 14% 14% 12% 10% 14% 12% 13% 10% 6% 4% 4% 2% 4% 3% 11%
$108-$20B 21% 26% 18% 16% 12% 10% 10% 9% 11% 11% 9% 6% 5% 6% 11% 7%
$5B-$106 16% 9% 8% 12% 22% 21% 22% 22% 23% 23% 25% 25% 34% 30% 36% 35%
$16-$58 17% 21% 28% 35% 34% 36% 34% 36% 31% 37% 47% 59% 51% 48% 44% 42%
<$1B 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Weighted Average 65,290.1 62,867.0 59,533.7 53,470.0 48,703.8 45,958.3 47,028.3 46,761.1 46,725.9 41.443.3 33,216.0 17,612.9 19,614.9 19,345.0 14,663.2 12,158.5
r r~ r rw rr rr r~ r~ rr +r rr rr rr r rr r r rr rr
Renaissance'
Investment Management
Firm Profile
^ Based in Cincinnati, Ohio, with $6.0 billion in assets
under management; founded in 1978
^ A partnership between Renaissance investment
professionals and Affiliated Managers Group (AMG)
in place since 1995
- Investment team focuses on investment decisions
and business operations
- AMG provides marketing, distribution and legal
assistance
^ 24 employees with 5 partners; partners average 17
years with firm
^ Diversified client base includes corporate pensions,
public funds, endowments and high net worth
individuals
^ Emphasis on focused, consistent investment disciplines
FOR USE IN ONE-ON-ONE PRESENTATIONS ONLY
The disclosure on die Appendix page is an integral part of [Iris prese~~tation.
072201
Growth Equity Disciplines
(Approximate Market Cap Range)
No Limit
Large
Cap
$20 b $20 b
Smid Mid
Cap Cap
$2 b
Small $2 b $2 b
Cap
$250 m $250 m
Portfolio vs. Benchmark Return
12.0%
9.1
Large Cap Russell 1000
Growth Growth
Inception: 7/91
20.5% 21.9%
Small Mid Russell 2500
Growth Growth
Inception: 4/03
4.7%
®_ o.7°r°
Midcap Russell Midcap
Growth Growth
Inception: 1/00
11.8%
5.5%
®_
Small Cap Russell 2000
Growth Growth
Inception: i/96
r rr r rrr rr r~ rr rr ~r ~r r rr rr rr~ rr r r rr rr~
~naissance'
Investment Management
Representative Client List
Corporate
Hawaiian Electric Industries
Hunt Midwest Enterprises
Leggett & Platt
ONEOK
Raytheon
Shell Asset Management Company (SamCo)
Wolverine World Wide
Health Care
Akron General Health System
Crittenden Memorial Hospital
Floyd Memorial Hospital
Gaylord Hospital
Jackson County Schneck Memorial Hospital
Port Huron Hospital
Data as of 12/31/06
Public Funds
Commonwealth of the Northern Mariana
Islands
Florida Retirement System Trust
School Employees Retirement System of Ohio
Foundations & Endowments
Akron Community Foundation
Barberton Community Foundation
F. R. Bigelow Foundation
Houston Baptist University
Jewish Heritage Foundation of Greater
Kansas City
Mount Union College
Stetson University
Western Kentucky University Foundation
Religious
Diocese of Reno
Diocese of San Jose Retirement Plan
for Priests
Maryknoll Fathers & Brothers
Charitable Trust
United Methodist Stewardship Foundation
of Central Pennsylvania
Taft-Hartley
Cement Masons Pension Trust Fund
CMTA -Glass Molders, Pottery, Plastics &
Allied Workers Pension Trust
Michiana Area Electrical Workers
Pension Fund
San Mateo Electrical Construction Industry
Teamsters Loca1210 Affiliated Pension Plan
Teamsters Loca1641 Pension Fund
Tri-State Joint Fund
Sub-Advisory
American Beacon Funds
American Fidelity Assurance Co.
Atlas Funds
The Calvert Group
The above Representative Client List is a representative
cross-section of institutional clients. Each has given
permission to use their name as a reference or on a
representative client list. !t is not known whether these
clients approve or disapprove of the firm or the advi-
sory services provided.
FOR USE IN ONE-ON-ONE PRESENTATIONS ONLY
The disclosure on the Appendi_~ page is an integral par? of this preseatalian.
072201 2
r a^~ r ~r ~r rr r . ~r r r r .r ~r r ~r •~r ~ r
enaissance'
IIIVCStmCllt Malla~CnlCnl
Renaissance Professionals
Michael E. Schroer, CFA Paul A. Radomski, CFA, CPA
Munagirtg Partner, Chief Irtvesttnent Officer ~lanagittg Partner
~'~ `'i 24 years investment experience ~ 19 years investment experience
.,,.~ -
22 years with the firm ~ 19 years with the firm
~~ B.A., University of Cincinnati ~-~ B.A., Miami University
M.B.A., Indiana University '` I
_- Joe G. Bruening, CFA Mary C. Meiners
Partner, Portfolio Manager Partner. Associate Director of Research
19 years investment experience - 26 years investment expericncc
8 years with the firm 23 years with the firm
B.A., University of Cincinnati Attended Northern Kentucky University
~`~ M.B.A., Xavier University
J. Eric Strange, CFA, CPA - _ Scott A. Mlynek, CFA
Research Anah~st Kesearclt Anal~~st
wo ~ ,- y ,t
i • ~-. - 6 years investment expericncc ~: "'~"~r~ 10 years investment experience
B.A., Georgetown College B.A., Xavier University
..
Sudhir S. Worrier ~ y ,Tennifer C. Trowbridge, CFA
Partner C{tief Operations Officer Director of Client Sen'ices
~~ ' 12 years with the firm ~ 7 years invesUncnt expericncc
B.A.. Madurai Kamaraj University ~~ B.A., Xavier University
•""~ M.B.A., Xavier University
i
FOR USE IN ONE-ON-ONE PRESENTATIONS ONLY
The disclosure on the Appenc{ix page is an itttc gru{ part of this presentatiat.
062911 -~
r ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ r ~ ~ ~ ~ ~ ~
n alSS~l'1C@~
Investment Management
Investment Philosophy
Renaissance is a conservative, high-quality growth manager. We utilize disciplined and
systematic methods for identifying attractive growth companies with strong business
and earnings momentum trading at reasonable valuations.
We believe that portfolio management is both art and science. We employ advanced
quantitative tools and techniques to help us identify superior companies and superior
investment opportunities. Ongoing research, in the form of both security selection and
enhanced quantitative methods, is integral to our continuing success.
FOR USE IN ONE-ON-ONE PRESENTATIONS ONLY
The disclosure on dte Appendix page is an integral part of this presentation.
OS2001 4
rr r ~.. ~r . r ~ ~ r ~^s ~r t~ ~. r ~ ~r r ~^. ~
enaissance
Invctitmcnt ~9ana~~cmcnt
Large Cap Growth Portfolios -Investment Process
Broad Renaissance Highest
Universe Universe Ranked Stocks
1,000 Largest
3Ls= 400-500 $(f-100
{EadudesADRs, _ CoodGrowth
REITs
Closed- Mast _ Prospects,
,
ffid Pcnf~table Ring
Represents 8r ~~ ,
APP~~3' Fi~ncially ~~
93°~b of ~rogge~st Reasonable
Alarhet Value Valuation
of US. Stock
Meet)
FOR USE IN ONE-ON-ONE PRESENTATIONS ONLY
%~hc~ di.~~rlu.n~~ r un the ~/~/~endi.c~~uge cs air iir~~°,~rul /un~t n/~thrs/~rnseniuliun.
061K0S 5
n c~lSSc1~'1C@'
Invcstmcnt Managcmcnt .
Scoring Process
Growth & Momentum Factors
- Historical Sales Per Share Growth Score
- Historical Earnings Per Share Growth Score
- Five Year Average ROE
- Price Momentum
- Estimated Long-term Earnings Growth Rate
Expectational Factors
- Change in Consensus Estimate
- Breadth of Estimate Revision
- EPS Surprise
Valuation Factors
- Forecasted Earnings Yield
- Price-to-Sales Ratio
- Cash Flow Generated for Stakeholders Yield
Quintile Rank by
Scoring Process
Identification of Potentially
Attractive Opportunities
(Focus List)
Performance: 10 Years Ending 12/31/06
+8.0%
+5.5%
Russell Focus
1000 List
Growth Stocks
Performance o/ Focus List Stocks:
The pedormance of the focus list stocks has been calcu-
lated assuming equal-weighted positions in all stocks
scoring in the top quintile of our Large Cap Growth model,
rebalanced quarterly. We have deducted 50 basis points
quarterly to impute market impact and transaction costs.
FOR USE IN ONE-ON-ONE PRESENTATIONS ONLY
The disclosure on the Appendcx page is an integral port of I{cis presentation.
072201 6
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aissance'
Investment Management
Qualitative Analysis
Review Quantitative Scores & Ranks
- Confirm that scores and ranks portray an accurate
picture of company fundamentals and stock valuation
Study Company Financial Statements
- Look for transparency and clarity in financial statements
- Review accounting policies, including revenue recognition
policies
- Analyze flow of cash (to growth opportunities,to stake-
holders, to management)
- Review financials for underappreciated risks
Study Company Fundamentals
- Gain an understanding of company's products and
services
- Gain an understanding of drivers of historical growth
- Assess company's competitive position
- Evaluate company's ability to perpetuate growth into
the future
Evaluation of
Focus List Companies
to Identify
Best Investment Ideas
r~
+5.5%
3
Performance of Focus List Stocks:
The perormance of the focus list stocks has been calculated
assuming equal-weighted positions in all stocks scoring in the
top quintile of our Large Cap Growth model, rebalanced quar-
terly. We have deducted 50 basis points quarterly to impute
market impact and transaction costs.
FOR USE IN ONE-ON-ONE PRESENTATIONS ONLY
The disclosure on the Appendix page is an integral part of this presentation.
072201 7
Russell Focus Renaissance
1000 List Large Cap
Growth Stocks Growth
~r r r. r rr r r r r r~ r i r r~ r r r
n ~SSat"1C@
Investment Managcmcnt
Sell Discipline
Stocks Ranking in the Lowest 3 Quintiles of
our Scoring Process MUST be Sold
Quintile Rank by
Scoring Process
Sells -~
Characteristics of Sell-Ranked Stocks
• Slowing rates of earnings growth
and/or
• Negative revisions in earnings estimates
and/or
• High Valuation
Example: Lexmark International
L~xmark IrM~matlooal rt[. IIXK~
<un-J)<1) }) ti~iw.it[6~GM ~ Flg~ K 5[Q
U 6 fear Lv+r T3 x+34
L~~l JL 1~0
! 10J
m
m
~)
67
Stuck Sold
Negative Earnings Surprise. ~ ail
Slowing Earnings Growth ~ 1_
~,Yj',,,
~)
643 947 X241 lny i,(r N4~ ~;Kr 3rT5 9.(Fi Nis ~t~i6
cr[. R.+n ; ta~ar 1t1d 91 arrr4.lM~ ;
FOR USE IN ONE-ON-ONE PRESENTATIONS ONLY
The disclosure on the Appendix page is an integral part of this presentation.
062009 g
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enaissarice'
Inc>Imcnt Mana~~cmcnt
Portfolio Construction
Sector Allocation - 12/3I/06
Large Cap Growth Portfolio
~ Identify 50-60 best ideas
~ Equal-weighted positions (at cost)
Information
Technology (22.6%)
Health Care (17.8%)
Information
Technology (26.6%)
Health Care (17.5%)
~ Bottom up allocation to economic sectors
40°Io max in any one sector
~ Scaleback required if position becomes
double-weighted
Consumer
Discretionary (13.8%)
Consumer Staples (8.0%)
Energy (3.7%)
Materials (5.4%)
Industrials (19.2%)
Financials (7.5%)
Telecommunications Services (2.1%)
Russell 1000 Growth Index
Consumer
Discretionary (14.2%)
Consumer Staples (9.8%)
Energy (4.0%)
Materials (2.8%)
Industrials (14.3%)
Financials (8.6%)
Telecommunications Services (0.9%)
Utilities (1.4%)
FOR USE IN ONE-ON-ONE PRESENTATIONS ONLY
l7~c~ disc~losurc~ un ihc~ npl~c~ndi.~ lrugc~ i,c un inleKrul /ctrl o~ihis prc~.rc~n(aliun.
072201 y
~ r~ ~ ~ ~ rr ~ ~ r +~.~ ~ r ~ ~ ~ r ~ r ~
'ssance'
Investment Management
Portfolio Characteristics as of 12/31/06
Russell
Renaissance 1000
Large Cap Growth Growth Index
~ Good Growth
-Past 3 Years Earnings Growth 22.0°l0 19.7°Io
-Projected 3-5 Year Earnings Growth 12.9% 14.1 ~'/o
~ Rising Earnings Expectations
-Positive Change in 2006 Earnings Estimate (Last 90 Days) 83% of Cos. 57% of Cos.
-Positive Change in 2007 Earnings Estimate (Last 90 Days) 87% of Cos. 530 of Cos.
~ Attractive Valuation
-P/E on 2006 Estimates 16.8X 18.7X
-P/E on 2007 Estimates 15.3X 16.7X
~ Market Capitalization
-Weighted Average Market Cap $65.3 bil $72.8 bil
FOR USE IN ONE-ON-ONE PRESENTATIONS ONLY
The disclosiere on t/ze Appendix page is an integral part of this presentation.
072201 l0
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'ssarice'
Investment Management
Large Cap Growth Portfolio as of 12/31/06*
Sector
Information Technolo
Applied Materials
Cisco Systems
Hewlett-Packard
International Business Machines
Lam Research
Microsoft
Health Care
Amgen
Becton Dickinson
Eli Lilly
Johnson & Johnson
McKesson
Russell
Portfolio 1000 Growth
22.6% 26.6%
Motorola
NVIDIA
Oracle
QUALCOMM
Texas Instruments
Western Digital
17.8% 17.5%
Merck & Co.
UnitcdHcalth Group
We1lPoint
Wyeth
Russell
Sector Portfolio 1000 Growth
En rgv 3.7% 4.0%
Halliburton
XTO Energy
Materials 5.4% 2.8%
Freepost-McMoran Copper & Gold Praxair
Nucor
Industrials 19.2% 14.3%
3M Illinois Tool Works
Boeing Lockheed Martin
Emerson Electric Manpower
FedEx United Technologies
General Electric Waste Management
Consumer Discretionary
Haney-Davidson
J.C. Penney
Kohl's
McDonald's
Consumer Staples
Coca-Cola
Colgate-Palmolive
13.8% 14.2%
Nike
Nordstrom
Omnicom Group
8.0% 9.8%
CVS
PepslCO
FOR USE IN ONE-ON-ONE PRESENTATIONS ONLY
The disclosure on the Appendix page is an integral part of this presentation.
071901
Financials 7.5% 8.6%
American International Group Progressive
Franklin Resources T. Rowe Price
Telecommunication Services 2.1% 0.9%
AT&T
* This list represents Nie current ltuldings in our Garge Cup Growth Strategy us of the dote
stated. Non-performance bused criteria hove been used to select the securities listed. The past
peifonnance of dtese stocks is iw guurmuee gF,future results. It should not be assumed that any
of the securities n-ansuctions or boldi~tgs listed were or will prove to be prgJituble. Portfolio
/toldings are not recommendations. Iluldings ore subject to cltaige ut management's discre-
tion and Renaissance may have already bought or sold, or may in the future buy or sell, these
securities on behalf uf' its clients. A complete list qf~ the purchases aid soles in this strategy for
the punt 12 nwnths is available upon request.
11
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aissarice'
Investment Management
Large Cap Growth Strategy
Annual Performance as of 12/31/06
1991* 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Renaissance (Gross) 15.3% 11.1% 6.1% -3.2% 35.7% 24.5% 36.6% 30.4% 10.7% -14.3% -10.9% -14.1% 47.1% 18.8% 9.8% 5.4%
(Net) 14.9 10.3 5.4 -3.7 35.0 23.8 35.8 29.7 10.1 -14.9 -11.4 -14.6 46.4 18.2 9.4 4.8
Russel 11000
Growth Index 20.9 5.0 2.9 2.7 37.2 23.1 30.5 38.7 33.1 -22.4 -20.4 -27.9 29.8 6.3 5.3 9.1
* Performance shown represents the results for the 6 months ending 12/31/91 only.
FOR USE IN ONE-ON-ONE PRESENTATIONS ONLY
The disclosure on the Appendix page is an integral part of this presentation.
072201 12
~ . ~ ~ . ~ ~ ~ ~ r r~ i ~ r ~ ~ ~ ~ ~
n d1SSa!'1C@'
Investment Management
Large Cap Growth Strategy
Investment Results as of 12/31/06
Since
Inception
1 Year 3 Years 5 Years 7 Years 10 Years 7/( 1/91)
RETURNS
Renaissance (Gross) 5.4 % 11.2 % 11.7 % 4.1 % 1.1 % 12.0 %
Renaissance (Net) 4.8 10.7 11.1 3.6 9.5 11.4
Russell 1000 Growth Index 9.1 6.9 2.7 -4.9 5.5 9.1
Renaissance Value Added -3.7 +4.3 +9.0 +9.0 +4.6 +2.9
RISK
Beta"~ .86 .85 .87 .88 .88
Downside Capture Ratio"' S2% 45% 66% 81% 84%
Upside Capture Ratio" 117 % 120 % 120 % 108 % 107 %
~"Relative to Russell 1000 Growth Index
FOR USE IN ONE-ON-ONE PRESENTATIONS ONLY
Tlee disclosure on the Appe~tdi_r page is aia inlegrnl part of zhis presentation.
072201 13
enaissance'
Investment Management
The Renaissance Advantage
^ Proven Performance
- Achieved better performance than benchmark over past 3, 5, 7, 10 years
and since inception
- Value added in both up and down markets
^ Consistent Investment Team and Process
- Same investment team since inception
- Disciplined investment process applied continuously since inception
^ High Quality Firm
- Experienced investment team
Significant ownership by key investment professionals
- Exclusive focus on investment management effort
FOR USE IN ONE-ON-ONE PRESENTATIONS ONLY
The disclos~ue on the Appendix pnge is an integral part of this presentation.
072201 14
~naissance'
Investment Management
Appendix
;__.... ....... __ _
RENAISSANCE LARGE CAP GROWTH STRATEGY
_._. __._... _._.._ ._.... ....._
_. _ _ _ _
j
_...... __ ~.
....
_. _. _
_ . ........
._... ;
<~.~ ~
~ ;
~ A nnua l .
Supplemental Net N umber of ~ Asset Weighted ~~ M arket ~ M arket
Information i Composite Benchmark Portfolios '= Composite ~ Value of Value of
Year
_ Gross-of-Fee Return
...
..... , Return
.......
. . Return
..
.. in Composite
...
_...._ ~ Dispersion
._..
..
. __. Composite
_-
.. ~ Firm's Assets
, .... .
199T '15.30% 14.93%
. 20.85% 2 ~..
NM F`~ $88 $7.417.3
1992
...
.... ~ 11.12% I
, .... 10.26%
....
. 5.00%
.. . 2 1. NM F"
....... .
.. $7.3
. $1,4502
1993 6.06 % i 5.43% .
2.90 % 5 > 0.32 $14.0 $ 1.529.2
1994
_
.. -3.16 %
, ..
. -3.68 % 2.66 % 7 0.11
..
...
. $ 202 $ 1,393.1
1995
. 35.68% 34.98 %
... 37.19% 7 ., 1.37
!..
,
_- $ 26.3 ~ $ 1,538.1 '..
1996 k 24.47 % 23.8.1% ! 23.12% 8 0.55 $25.5 l $ 1,525.4
' 1997 36.59 % 35.84 % ~ 30.49 % ~ 10 220 $ 26.0 $ 1,373.3 +'
1998
s.._. - __. 30.41%
_ r _. _. 29.66 %
_
. - - j 38.69 %
_
.. 20
.
...
.... 3.18
.... ....
. $ 79.1
_ $ 1,390.0
_.. ...
,
' '1999 10.74 % 10.07% 33.12 % `
;
28 r
1.50 $ 38.2 $ 1,211.9 '~
2000 -14.34%
.. __.. -14.87% i -22.41%
_.
. 20
~ 2.63 +
. ... - . $27.9
.. $736.7
2001
_ _10.85 % ;.
__ -11.35 % ~
.
_20.40 % 15 1.00 .`•. $ 25.5 $ 526.7
2002... -14.09 % ~~. -14.57 % ~ -27.86 %
.... { 13
; 1.02 i
. $19.6 $415.7
2003
.. ..
,
_..... 47.07 %
..
.
. .; 46.41%
.. 29.76 %
~ _... .. 22
..
~ 1.08
...
... _ $ 29.7
.. ..
. $ 575.2
.
2004 76.84
% 16.18% 6.28%
~. ;
19 1.12 $97.2 $908.2 i
~„ '
2005 9.79 % 9.42 % ! 5.26 % t 32 0.92 $269.6 $2,796.6
2006 5.36 % 4.77 % 9.10 % 62 0.53 $ 605.2 $ 5,451.7
`Inception?/V1991 ' `
~ ,
f"Not M eaningful Figure -_. a ... _.. , _ , 5 . _ s ...... . ,......
Renaissance Investment Management (RlM) has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS ~~ ).
Firnl Definition The Renaissance Group LLC, which from time to time does business as Renaissance Investment Management (RIM), is a registered investment advisor with offices in
Cincinnati, OH that was established in 1978. RIM is an affiliate of Affiliated Managers Group based in Prides Crossing, MA. RIM is an investment manager that invests primarily in U.S.
based equities. A complete list and description of the Firm's composites is available upon request.
Composite Composition: RIM created the Large Cap Growth composite on July 1, 1991. Our Large Cap Growth Strategy invests in mid- and large-sized companies exhibiting a combination
of strong prospective earnings growth, reasonable valuation and good corporate fundamentals. The Large Cap Growth composite includes all fee paying, fully discretionary, tax exempt, non-
wrap Large Cap Growth accounts. This strategy was originally called Growth Equity prior to April 1, 2004, at which time the name changed to Large Cap Growth. Prior to June 30, 2004,
the Large Cap Growth Strategy contained taxable accounts and their historical performance. After that date, all taxable accounts were removed from the Large Cap Growth Strategy and its
historical performance Prior to January I , 2000, the Large Cap Growth Strategy contained Midcap accounts. After that date, all Midcap accounts were removed from the Large Cap Crowth
Strategy and its historical performance. RIM does not have non-tee paying portfolios. RIM will add new fully discretionary portfolios to the composite at the first full month under
management RIM will exclude terminated portfolios from the composite after the last full month they were under management.
Calculation of Peffformance Returns: Performance is calculated using total returns. RIM uses accrual accounting. Rates of return are time-weighted, with valuation on a monthly basis with
geometric linking of period returns. Valuations and returns are computed and stated in U.S. dollars. Account performance is based on total assets in the account, including cash and cash
equivalents. Performance is actual performance. Performance is asset-weighted using beginning-of-period values. Performance is not portable.
FOR USE IN ONE-ON-ONE PRESENTATIONS ONLY
Continued
072201 15
rr r~ rr r rr r w rr ~r r r r r rr rr r~ rr r rr
aissarice'
Investment Management
Appendix (con't)
RIM has chosen to present performance both gross- and net-ol'-fees. The gross-of-fee performance returns arc presented before deduction of management and custodial fees but after the
deduction of all trading expenses. Net performance is reported after the deduction of all trading costs, RIM management fees and embedded fees that cannot be unbundled. These gross- and
net-of-fee investment results for the Renaissance Large Cap Growth Strategy include reinvestment of dividends and other earnings. There is no minimum asset size for inclusion in the
composite RIM uses trade date accounting. Performance results arc pre-tax. Actual performance may differ from composite returns, depending on the size of the account, brokerage
commissions, investment guidelines and/or restrictions, inception date and other factors. After-tax results will vary from the returns presented herein for those accounts that are subject to
taxation. Additional information regarding policies for calculating and reporting returns is available upon request.
/nvestmeiit Management Fees: RIM's fees are based nn account size. The standard R[M fee schedule for the Large Cap Growth Strategy for direct-managed accounts is as follows: First $5
million - .75°~0, Next $5 million - .70%, Next $5 million - .65°l0, Next $5 million - .60%, Amounts over $20 million - .55%. Investment advisory fees are described in Part II of RIM's Form
ADV.
Benclunarl~: The Russell 1000 Growth Index is composed of the 1,000 largest U.S. companies based on total market capitalization with higher price-to-book ratios and higher forecasted
growth values. The Russell index names are registered trademarks of The Frank Russell Company. RIM compares its composite returns to a variety of market indices such as the Russell 1000
Growth. This index is shown for comparison purposes only. We are not trying to explicitly manage to this benchmark. This index represents unmanaged portfolios whose characteristics
differ from the composite portfolios; however, they tend to represent the investment environment existing during the time periods shown. The index cannot be invested in directly. The returns
of the index do not include any transaction costs, management fees or other costs.
Ot{ier: Performance data quoted represents historically achieved results, and is no guarantee of future performance. Future investments may be made under materially different economic
conditions, indifferent securities and using different investment strategies and these differences may have had a significant effect on the results portrayed. Each of these material market or
economic conditions may or may not be repeated. Therefore, there may be sharp differences between the performance shown and the actual performance results achieved by any particular
client. The value of an investment may fall as well as rise. Please note that different types of investments involve varying degrees of risk and there can be no assurance that any specific
investment will either be suitable or profitable for a client or prospective client's investment portfolio. Investor principal is not guaranteed and investments may not receive the full amount
of their investment at the time of redemption if asset values have fallen. No assurance can be given that an investor will not lose invested capital. Consultants supplied with these performance
results are advised to use this data in accordance with SEC guidelines.
Risks o~Large Cap Crowth Strateg,Z Large Cap Growth Strategy returns may show a high level of variability. In addition to market risk, the majority of any additional risk in these portfolios
is related to specific stock selection, and Renaissance does make significant bets on individual securities. Portfolio turnover related to the Large Cap Growth Strategy has historically averaged
between 100%~ and 130% per year and could exceed that level in the future.
Sources: Portfolio characteristics, representative holdings and sector weights (to the extent included in this presentation) for a typical Large Cap Growth portfolio arc calculated by
Renaissance Research using First Call, Compustat and Frank Russell data. Russell Investment Group is the source and owner of the Russell Index data contained or reflected in this material
and all trademarks and copyrights related thereto. The presentation may contain confidential information and unauthorized use, disclosure, copying, dissemination or redistribution is strictly
prohibited. This is a presentation of Renaissance Investment Management. Russell Investment Croup is not responsible for the formatting or configuration of this material or for any
inaccuracy in Renaissance's presentation thereof.
FOR USE IN ONE-ON-ONE PRESENTATIONS ONLY
072201 16