Question-and-Answer Session
Operator
(Operator Instructions). Your first question comes from Roger Smith with Fox-Pitt Kelton.
Roger Smith - Fox-Pitt Kelton
Great, thanks very much. I'm just curious a little bit of how the sales process is going in the separate account channel and what are you really hearing from clients, and how should we really think about potential mandates, or the pipeline in the future?
Rich Pzena
Let me address it in two different aspects, one is new prospects or clients that are prospective clients, and then existing clients. The pipeline, if you measure the pipeline as the search activity that we're included in, when we get notified that we're included in a search, remains very strong. And I think that's attributed to, basically to our reputation as a value investor. So the consulting firms that typically direct this process believe that they should expose their clients to us as one option if they're thinking about hiring a true value investor.
The process beyond the initial contact is obviously significantly weaker than it has been historically. Typically the process goes, you're exposed, there's a whittling down that can happen in a first round to maybe as many as 15 or 20 potential candidates, and then it gets whittled down to the final three or four before you make a presentation to the ultimate client. That whittling down process, we're whittled more than we used to be, because of our recent investment performance, which is not surprising.
We still make it into some finals presentations, however, and we used to win more than our fair share. Now we probably win our fair share. And so the process is clearly less robust than it used to be, but we're not shut out at this point in time, and we continue to have opportunities. The opportunities are quite erratic, and so predicting asset flows might be on a quarter-to-quarter basis is almost impossible in that channel, but that's the sales process.
As far as the existing clients go, whenever you get into a performance period like we've been in, the clients require a lot of handholding and the senior people in our firm are spending an extraordinary amount of time with our clients, to make sure they continue to understand why they hired us, what it is that we do, and why the performance has come out the way its come out, given what we do. Most people understand that and accept it, and they want to make sure that we are sticking to our guns going forward.
- To read the full transcript on Seeking Alpha, click here »
