Cambiar Small Cap Fund Investor Cl · NASDAQ:CAMSX
Cambiar Small Cap Fund Investor Cl — Cambiar Investors — Investor Presentation (May 2023)
41 slides from Cambiar Small Cap Fund Investor Cl's investor presentation, May 2023
Slide 1: Quality vs. Quantity in Small Cap Equities
QUALITY vs. QUANTITY IN SMALL CAP EQUITIES Colin M. Dunn, CFA Portfolio Manager — Small and SMID Value Kevin Fitzpatrick, CFA Director, Sales/Client Service Jamie Goldfarb, CFA SVP, Sales/Client Service CAMBIAR INVESTORS
Slide 2: Why Cambiar?
WHY CAMBIAR? A client-first organization anchored by a tenured team whose sole objective is to deliver superior risk- adjusted returns within our investment vertical of relative value. YEAR FOUNDED ASSETS UNDER SUPERVISION* EMPLOYEE-OWNED 1973 INDEPENDENT Mutually aligned interests Entrepreneurial c
Slide 3: Investment Strategies
INVESTMENT STRATEGIES NNN Domestic Large Cap Value SMID Value Small Cap Value International International Equity International Small Cap Europe Select Global Global Equity Aggressive Value *(MF) Mutual Fund, (CIT) Collective Investment Trust, (SMA) Separately Managed Account, (LP) Limited Partnershi
Slide 4: Investment Team - Domestic
INVESTMENT TEAM - DOMESTIC BRIAN M. BARISH CFA ANDREW P. BAUMBUSCH President, CIO Investment Principal Experience: 34 Years Experience: 25 Years Coverage: Industrials, Communication Services JOSEPH S. CHIN, CFA ADAM BALLANTYNE Investment Principal Senior Analyst Experience: 24 Years Experience: 13 Y
Slide 5: Investment Philosophy
INVESTMENT PHILOSOPHY CAMBIAR INVESTORS
Slide 6: Quality, Price, Discipline (QPD)
QUALITY, PRICE, DISCIPLINE (QPD) Be price sensitive buyers of high-quality assets. QUALITY PRICE Company-specific attributes such as high relative Price sensitivity at attachment is the most critical profitability, durable free cash flow generation, a determinant of both forward return potential and
Slide 7: Equity Style Scale
EQUITY STYLE SCALE Deep Value Relative Value GARP Aggressive Growth —O C) C) @ CL) CY a—- VS VS VS VW VS VW Traditional Value Core Growth CAMBIAR * Cambiar’s QPD approach typically results in aggregate portfolio attributes that are best categorized as relative value + We believe this increased oppor
Slide 8: Investment Process
INVESTMENT PROCESS CAMBIAR INVESTORS
Slide 9: Investment Process Overview
INVESTMENT PROCESS OVERVIEW ESTABLISHING THE LIBRARY Cambiar’s QPD approach creates a fundamental-based framework for analysts to leverage in building their respective ‘library’ of high-quality investment candidates. INVESTMENT SELECTION The analyst builds an investment case for securities identifie
Slide 10: Establishing the Library
ESTABLISHING THE LIBRARY Owned companies should demonstrate above average internal financial/operating performance reflective of a structural product and/or advantaged market position over multi-year periods. aa | | ANALYST. RESEARCH Hil Initial universe comprised of all | - - names within analysts'
Slide 11: Investment Selection
INVESTMENT SELECTION Analysts undertake a thorough underwriting process in pursuit of the companies that meet Cambiar’s quality, value creation, and return criteria. Seek strong company internals: Adhere to guiding price principles: + Durable franchise position + Price-sensitivity at entry is critic
Slide 12: Portfolio Construction
PORTFOLIO CONSTRUCTION Portfolio Managers and analysts collaborate to continuously test their conviction level for existing holdings and evaluate new opportunities in building a balanced portfolio. CONSISTENCY + Aggregate characteristics are BALANCE + Maintain diverse sources of combined return and
Slide 13: Sell Discipline
SELL DISCIPLINE Active re-allocation of capital as stocks reach price targets, while “being good at being wrong” for positions that do not work out. UPSIDE CONSIDERATIONS DOWNSIDE CONSIDERATIONS Thesis realized, stock reaches price target * — Deteriorating or negative change in fundamentals relative
Slide 14: Risk Management
14 RISK MANAGEMENT Objective is to effectively balance portfolio risk and reward, with a particular emphasis on minimizing permanent loss of capital. SECURITY LEVEL + Analyst specialization + Valuation support + Strict adherence to quality + Liquidity analysis MACRO + Monetary / Fiscal / Political A
Slide 15: Key Cambiar Attributes
KEY CAMBIAR ATTRIBUTES INDEPENDENT ACTIVE Employee owned - Client first Benchmark agnostic / high active share TENURED CLEAR IDENTITY Extensive and diverse bottom-up Single relative value philosophy: research experience Quality, Price, Discipline 15 For Investment Professional/Institutional Use Only
Slide 16: Small Cap Value
SMALL CAP VALUE PORTFOLIO MANAGERS Andrew P. Baumbusch Colin M. Dunn, CFA CAMBIAR INVESTORS
Slide 17: Small Cap Value: Profile
SMALL CAP VALUE: PROFILE Asof 831-2023 KEY FACTS SECTOR WEIGHTS + Portfolio inception: November 30, 2004 + 45-55 holdings — generally equal weighted (at initiation) Comm. Services + Typical weights - Initial: 2% | Max: 3.25% = + Market cap range: Primarily $500 million - $5 billion Consumer Discreti
Slide 18: Small Cap Value: Characteristics
SMALL CAP VALUE: CHARACTERISTICS As of 3-31-2023 OPERATING EFFICIENCY ROA (Weighted Avg) 5.1% 0.5% ROA (Median) 3.4% 1.0% ROE 5-Yr (Weighted Avg) 11.0% 6.6% ROE 5-Yr (Median) 9.5% 6.0% ROIC (Weighted Avg) 8.0% 3.0% ROIC (Median) 74% 2.6% LEVERAGE Net Debt to EBITDA 1.2 3.3 Vv QUALITY Target Strong O
Slide 19: Small Cap Value: Quality Profile
SMALL CAP VALUE: QUALITY PROFILE (tailing 5 Years) As of 3-31-2023 16.0 ROE 10.0 ROIC 14.0 90 80 12.0 70 10.0 60 = — 50 8.0 z = 40 6.0 3.0 4.0 2.0 2.0 te - 0.0 0.0 -10 ee amananescsesentrnHANXNang Reena araancsoconnnnanaan SP Pepe et ee P Pe eee ee ergegag SU PPS Tp eter agsgxyageggay SERB ET AST ER
Slide 20: Small Cap Value: Performance
SMALL CAP VALUE: PERFORMANCE 30% 25% 20% 15% 10% 5% | oe 0% -5% -10% As of 3-31-2023 m Cambiar SCV (g) aCambiar SCV (n) m Russell 2000 Value Bujteis -15% 1023 1 Year 3 Year 5 Year 10 Year Since Inception 11.30.2004 Cambiar SCV (g) 73% -2.0% 23.5% 8.4% 7.9% 9.6% Cambiar SCV (n) 7.0% -2,8% 22.5% 7.5%
Slide 21: Small Cap Value: Risk/Return Profile
SMALL CAP VALUE: RISK/RETURN PROFILE Asof 831-2023 RISK REWARD (TRAILING FIVE YEAR) 9.0 Annualized Return (%) - Net - a 2 > @ ° ° ° ° ° 2 ° '» ° 20.0 21.0 22.0 23.0 24.0 25.0 26.0 Standard Deviation Cambiar SCV (n) 3.04 0.85 92.03 037 0.41 90.07 80.53 Russell 2000 Value - 1.06 100.00 024 - 100.00 10
Slide 22: SMID Value
SMID VALUE PORTFOLIO MANAGERS Andrew P. Baumbusch Colin M. Dunn, CFA CAMBIAR INVESTORS
Slide 23: SMID Value: Profile
SMID VALUE: PROFILE KEY FACTS + Portfolio inception: July 31, 2010 + 35-45 holdings — generally equal weighted (at initiation) + Typical weights - Initial: 2.5% | Max: 4% + Market cap range: Primarily $2 - 12 billion TOP 10 HOLDINGS SECTOR WEIGHTS Comm. Services Consumer Discretionary Consumer Stapl
Slide 24: SMID Value: Characteristics
SMID VALUE: CHARACTERISTICS As of 3-31-2023 OPERATING EFFICIENCY ROA (Weighted Avg) 71% 3.5% ROA (Median) 5.3% 1.3% ROE 5-Yr (Weighted Avg) 20.4% 12.5% ROE 5-Yr (Median) 16.6% 8.0% ROIC (Weighted Avg) 11.3% 6.2% ROIC (Median) 8.6% 3.9% LEVERAGE Net Debt to EBITDA 17 2.5 Vv QUALITY Target Strong Oper
Slide 25: SMID Value: Quality Profile
SMID VALUE: QUALITY PROFILE ctrailing 5 Years) As of 3-31-2023 25.0 ROE 16.0 ROIC 14.0 20.0 12.0 15.0 10.0 = g 80 10.0 6.0 50 40 20 0.0 0.0 een engaananceseseoununnannanan ae aemnaaanceseecrnnnnannan TTP PPT pti g eae saggagagargagg®” TPiREtTPtTPTieze2g sas yseggyggqgqag 2 Zo 2 23 aa 4 a ze 22 2% 22
Slide 26: SMID Value: Performance
SMID VALUE: PERFORMANCE As of 3-31-2023 30% 25% 20% 15% 10% 5% oy Me = Cambiar SMID Value (g) -5% 0 Cambiar SMID Value (n) = Russell 2500 Value “10% “15% 1023 1 Year 3 Year 5 Year 10 Year Since Inception 731.2010 Cambiar SMID Value (g) 3.5% 1.5% 25.0% 11.9% 12.0% 13.7% Cambiar SMID Value (n) 3.4% 0.
Slide 27: SMID Value: Excess Return
CAMBIAR SMID VALUE: EXCESS RETURN As of 831-2023 The Cambiar SMID Value strategy has an extensive track record of outperforming the Russell 2500 Value Index over rolling three-, five-, and ten-year periods. ROLLING 3 YEAR PERFORMANCE ROLLING 5 YEAR PERFORMANCE ROLLING 10 YEAR PERFORMANCE 158 20% Ea
Slide 28: SMID Value: Risk/Return Profile
SMID VALUE: RISK/RETURN PROFILE Asof 831-2023 RISK REWARD (TRAILING FIVE YEAR) 14.0 12.0 10.0 Annualized Return (%) - Net 20.0 21.0 22.0 23.0 24.0 25.0 26.0 Standard Deviation Cambiar SMID Value (n) 5.52 0.85 93.62 0.54 0.87 97.28 79.47 Russell 2500 Value - 1.00 100.00 0.29 - 100.00 100.00 28 Source
Slide 29: In Focus: Global Markets
IN FOCUS: GLOBAL MARKETS CAMBIAR INVESTORS
Slide 30: Value Evolution
VALUE EVOLUTION Traditional valuation analysis remains relevant in a wide range of industries. Yet, we believe in an increasingly |P-centric economy, additional value drivers must be considered. CORPORATE PROFIT DRIVERS Value creation has evolved toward capital investment more often accumulati intan
Slide 31: Quality Is Critical Following Rate Hikes
QUALITY IS CRITICAL FOLLOWING RATE HIKES fs of 331.2023 SMALL CAP PERFORMANCE FOLLOWING FED FUNDS RATE INCREASES (LAST 30 YEARS) Rate Hike Beginning Dec-15 Rate Hike Beginning Jun-09 40% 40% 30% 23.4% 30% 24.2% % 16.2% 15.2% %e 20% 12.1% 20% 90.9% sat 10% || 10% 09% 0% = 0% — -10% 5.6% -10% 29.6% -2
Slide 32: Non-Earning Companies Within the Small-Cap Index
NON-EARNING COMPANIES WITHIN fs of 331-2023 THE SMALL-CAP INDEX % OF RUSSELL 2000 CONSTITUENTS WITH NEGATIVE DILUTED EPS 55% 50% 45% 40% 35% 30% 25% 20% 15% ge ra vm £ ra ¢ £ e s s fF » » ? Bs B rn sn A Ar arid CAMBIAR PERSPECTIVE + The percentage of ‘zombie’ companies in the Russell 2000 Index rema
Slide 33: Small Cap Intra-Year Performance
33 SMALL CAP INTRA-YEAR PERFORMANCE 60% 40% 20% 20% 0% a 4% ° -20% -12% ° 40% 37% 60% 2 3 2 3 2 3 Russell 2000 (Calendar Year Returns and Intra-Year Declines) 45% 25% 25% 17% 17% % | . | = : | | a 4% 3% se 3 ee 13% 159% °° -14%-14% e @ @ 22% -20% ” 27% 27% e e -35% -33% -37% @ -50% eos unm + ©» © RB
Slide 34: Small vs. Large - Historical Discount
34 SMALL VS. LARGE - HISTORICAL DISCOUNT As of 331-2023 RUSSELL 2000 AGGREGATE MARKET CAP AS A PERCENTAGE OF RUSSELL 3000 13% 12% 11% 10% 9% B% 7% 6% CAMBIAR PERSPECTIVE * Small-cap stocks are trading near their lowest aggregate market cap relative to large-caps over the last 25 years, suggesting th
Slide 35: Value Remains Historically Cheap vs. Growth
VALUE REMAINS HISTORICALLY CHEAP VS. GROWTH, DESPITE OUTPERFORMANCE IN 2022 hs of 831-2023 RUSSELL 1000 VALUE P/E AS % OF RUSSELL 1000 GROWTH P/E Value stocks are relatively expensive 1.0% 0.9x 0.8x 0.7% 0.6x 0.61x Value P/E / Growth P/E 0.5x 0.4x Value stocks are : . , ; , , , : ; . relatively chea
Slide 36: Thank You
THANK YOU CONTACT Kevin Fitzpatrick (kfitzpatrick@cambiar.com Jamie Goldfarb (jgoldfarb@cambiar.com) CAMBIAR INVESTORS
Slide 37: Biographies - Investment Team
BIOGRAPHIES - INVESTMENT TEAM BRIAN M. BARISH, CFA President, ClO* Brian Barish is the President and CIO at Cambiar Investors and is responsible for the oversight of all investment functions at the firm. Mr. Barish has over 34 years of investment experience. Prior to joining Cambiar in 1997, Mr. Bar
Slide 38: Biographies - Sales & Client Servicing
BIOGRAPHIES - SALES & CLIENT SERVICING KEVIN FITZPATRICK, CFA Director - Institutional Sales* Kevin Fitzpatrick is a Director of Institutional Sales and Client Services at Cambiar Investors and has over 27 years of industry experience. Mr. Fitzpatrick is responsible for new business development and
Slide 39: Disclosure
DISCLOSURE Portfolio: The listed characteristics, sectors and securities are presented for a representative Cambiar account. Portfolio and index characteristics are calculated by FactSet and are based on FactSet's methodology. Portfolio holdings, characteristics, country breakdown, and sector weight
Slide 40: Performance
Annualized (as of December 31, 2021) 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 1 YR 3 YR 5 YR 7 YR 10 YR Performance Cambiar Gross Return 1 (%) 18.5 10.8 30.3 -11.3 5.0 18.5 -8.2 0.8 38.4 14.5 18.5 19.6 9.8 8.2 10.7 Cambiar Net Return (%) 17.6 9.9 29.1 -12.1 4.1 17.5 -9.1 -0.1 37.2 13.4 17.6
Slide 41: Performance
Annualized (as of December 31, 2021) 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 1 YR 3 YR 5 YR 7 YR 10 YR Performance Cambiar Gross Return 1 (%) 24.3 11.9 31.8 -1.9 12.9 18.4 -6.0 7.1 48.4 13.4 24.3 22.4 15.2 12.4 15.1 Cambiar Net Return (%) 23.5 11.2 31.0 -2.5 12.2 17.5 -6.7 6.5 47.4 12.5 23