Bennett Lawrence Management, LLC (BLM) is a 100% employee owned registeredinvestment advisor, focused solely on domestic growth stock investments dedicatedto building clients’ wealth through fundamental research with superior client service.Bennett Lawrence Management, LLC$562 million1– assets under managementTraditional Investment StrategiesAll Cap Growth EquityMidcap Growth EquitySmall Cap Growth Equity1. Preliminary as of March 31, 2013 (in US$).Firm OverviewLong / Short StrategiesAbsolute ReturnAll Cap Growth Equity(Domestic and Offshore)Small Cap Growth Equity
The Bennett Lawrence Investment TeamAverage Industry Experience22 YearsAverage Tenure at BLM10 YearsInvestment Professional Function Industry Experience CredentialsVan SchreiberChief Portfolio ManagerManaging Member48 yearsMBA, New York UniversityBS, Williams CollegeW. Alexander ElyPortfolio ManagerMember21 years BA, University of New HampshireDina PliotisConsumer AnalystMember25 yearsMBA, New York UniversityBS, Union CollegeNathan A. Mahrer, CFATechnology AnalystMember19 yearsMBA, George Washington UniversityBS, Colorado School of MinesJason P. GuptaHealth Care AnalystMember10 yearsMBA, The Wharton SchoolBA, University of MichiganAmy ZhangIndustrial, Energy &Basic Materials Analyst11 yearsMA, Dartmouth CollegeBA, Fudan University
Philosophy & ProcessAll Cap, Midcap and Small Cap Growth Equity
Investment PhilosophyEarnings growth drives stock prices.We believe that identifying major demand trends earlyand investing in competitively advantaged companiesbenefiting from these trends, will allow us to achieve ourobjective of long-term capital appreciation.
Investment ProcessGeneralEconomicOutlookIdentifyDynamicThemesInvest inCompetitivelyAdvantagedCompaniesManage Risk Develop expectationsfor economic growth,inflation, interest ratesand overall U.S.corporate profit growth Establish minimumearnings growth rate forportfolios Thematic investmentapproach that is fullyadaptable Identify at an early stage,major demands trendsthat are creating powerfulinvestment opportunities First Mover Advantage New Product Capability Leading Industry Position Strong Management Team Healthy Financial Condition Analyze stock, sector andportfolio exposure Comprehensive review ofbenchmark and factor risk
Portfolio ManagementSummary Growth Approximately 40 securities Sector exposure limited to high growth segments of the market Client-specific preferences reflected within portfolios Sector diversification, strict selection and sell disciplines, robust factorand comparative benchmark analysis Individual positions are thoroughly analyzed by at least two investmentprofessionals before being added to the universe Positions are generally trimmed if they appreciate to 6% of total portfolio Decline of 15% from cost triggers a position review Limited discovery potential Competitors disappoint Change in company fundamentalsInvestment Style Portfolio Structure Risk Management Company Selection Sell Discipline
Risk ManagementFactor Analysis Comparative Benchmark Analysis Sophisticated software for factor analysis:– Momentum– Beta– Volatility– Growth Momentum is generally our largest factor risk:– Utilize Axioma risk model to:• Optimize entry points• Highlight extended positions• Identify correlated risks• Assist in navigating turns in the market Portfolio characteristics versus benchmark:– Valuation– Beta– Momentum– Quality (ROE) Benchmark performance attribution:– Top/bottom performing benchmark holdings(weighted & un-weighted)– Top/bottom performing industry/sector groups– Factor attribution related to benchmark performance Portfolio weightings versus benchmark:– Industry/sector comparison– Top weightings per sector
Why Bennett Lawrence? Firm:– Established in 1995– Senior management team, founders of BLM, in place over 15 years– Central investment philosophy utilized for over 25 years (strategy employed since 1987) Resources:– Over 20 years’ average experience among team of 6 seasoned investment professionals– Significant internal research capabilities:• Uncover unique, high growth investment opportunities by conducting our own primaryresearch• Field work, channel checks, surveys, industry conferences, one-on-one meetings, WallStreet analysts and industry experts– Robust risk management procedures Incentives:– Employee ownership allows for teamwork, accountability and succession– Investment team is compensated to make sound investment decisions for clients– Organization is focused solely on domestic growth stock investments
S&P 500 yield is greater than 10-year treasury yield Allocations to equities are at historic lows Massive amounts of liquidity Interest rates are at ultra low levels Decrease in Systematic Risk: Unemployment stabilizing Housing and autos are recovering China growth rates improving Europe stabilizingConstructive Outlook for Equity Markets
Equipment&MachinerySpecialty RetailBig Ticket ItemsSoftware as a ServiceExploration&ProductionBiotechnologyPharmaceuticalsHousing TechnologyInvestment Trends & ThemesLinking Exciting Growth Opportunities Energy & Efficiency Capital Spending Health Care Housing & RelatedThe above information is preliminary as of 3/31/13 and based on the All Cap Growth Composite. Big Ticket & Specialty Retail
Cyclical Growth: Move from Preservation to AppreciationMassive amounts of Pent up Demand Corporations and Governments haveimproved balance sheets and are beginningto reinvest capital:- Pent up demand for replacement projects- Increased infrastructure spending- Rebounding industrial demandExamples:- Equipment and machinery Individuals are purchasing things they wantvs. things they need- Increased economic visibility and decreasedsystematic risk- Increase in consumer confidence and spending- Shift in consumer buying behavior:- 2008 to 2009: Staples- 2010 to 2011: Retail- 2012 to 2013: Big ticket itemsExamples:- New homes / home improvements- Cars, Boats, Motorcycles
Secular Growth: Innovation Creating Opportunity Software as a Service- Shift from users seeking data from the internet tocompanies using the internet to find data about itsusers- Cloud Computing: Increased need for storage,security, processing and manipulation of data- Companies seeking to monetize viewership- Continued increase in wireless users- Shift to smart devices (phones and tablets)resulting in a need for stronger network capabilities Biotechnology:- Investment in late stage companies providing aservice or a drug meeting a previously unmet ne- We seek companies with:- Massive markets- Proven data- Premier product(s) already introduced in themarket- Seeking to capitalize on peak revenues of premierproduct(s) of such companies- Decrease in systematic risk should compoundgrowth multiples
220.127.116.11.44.014.76.015.69.810.418.104.22.168.75.0024681012141618YTD 1 year 3 year 5 year Since Inception*Return (%)BLM All Cap Grow th Composite (gross of fees) BLMAll Cap Grow th Composite (net of fees) Russell 3000 Grow th IndexHistorical Performance vs. Russell 3000 GrowthAll Cap Growth Composite11. Preliminary as of 3/31/13. Performance for periods greater than 1 year is annualized.*Performance inception 1/1/87.The information contained on this page is supplemental to the GIPS compliant compositecontained on the final pages of this presentation..
BLM All Cap Growth Composite vs. Russell 3000 Growth IndexSector weightings and top 10 holdingsSecurity Sector% NetAssets1Amphenol Corporation Information Technology 4.47Brunswick Corporation Consumer Discretionary 3.89Mohawk Industries, Inc. Consumer Discretionary 3.85HCA Holdings, Inc. Health Care 3.65Cummins Inc. Industrials 3.53Oasis Petroleum Inc. Energy 3.45Toll Brothers Inc. Consumer Discretionary 3.31Range Resources Corporation Energy 3.19Pharmacyclics, Inc. Health Care 3.16Ryland Group, Inc. Consumer Discretionary 3.13Total 35.62BLM All Cap Growth Composite1vs. Russell 3000 Growth IndexInformationTechnologyBLM All Cap 25.9%Russell 3000 28.4%FinancialsBLM All Cap 7.7%Russell 3000 5.1%EnergyBLM All Cap 8.5%Russell 3000 4.3%HealthcareBLM All Cap 16.3%Russell 3000 13.4%CashBLM All Cap 3.7%IndustrialsBLM All Cap 15.4%Russell 3000 13.4%ConsumerDiscretionaryBLM All Cap 20.3%Russell 3000 16.8%Telecomm ServicesBLM All Cap 2.3%Russell 3000 2.2%1. Preliminary as of 3/31/13.The information contained on this page is supplemental to the GIPS compliant compositecontained on the final pages of this presentation.Russell 3000 Growth Index sectors in which BLM had no weighting are not shown.
BLM All CapGrowth Composite1Russell 3000Growth IndexP/E 2013 (ex-neg)226.9x 16.8x2013/2012 EPS Growth Rate234.4% 9.3%2013 PEG Ratio 0.78 1.81Weighted Avg. Market Cap $13,747 MM $87,450 MMMedian Market Cap $6,332 MM $1,324 MM1. Preliminary as of 3/31/13. Inception 1/1/87.2. EPS Growth and P/E figures are weighted.3. Annualized.The information contained on this page is supplemental to the GIPS compliant compositecontained on the final pages of this presentation.BLM All CapGrowth Composite(3-Year)1Russell 3000Growth IndexAlpha 1.47 -Beta 1.10 1.00R-Squared 0.90 1.00Sharpe Ratio30.73 0.71Standard Deviation321.41 18.39BLM All Cap Growth Composite vs. Russell 3000 Growth IndexPortfolio Characteristics
BLM All Cap Growth CompositePeer Group RankingsSource: PSN EnterpriseBENNETT LAWRENCE ALL CAP GROWTHQUARTILE RANKING BARPSN ALL CAP GROWTHPERIODS ENDING MARCH 31, 2013-5051015202530RATEOFRETURN3/2012-3/2013 3/2010-3/2013 3/2008-3/2013 12/1986-3/2013HIGH (0.05) 21.34 18.26 11.97 13.06FIRST QUARTILE 12.50 15.06 8.81 13.06MEDIAN 9.04 12.70 7.58 11.58THIRD QUARTILE 6.29 10.76 6.09 11.39LOW (0.95) 0.59 5.39 1.38 11.34MEAN 9.26 12.70 7.05 11.84VALID COUNT 73 69 61 4Bennett Lawrence All Cap GrowthRussell 3000 Growth3/2012-3/2013 3/2010-3/2013 3/2008-3/2013 12/1986-3/2013VALUE RANK VALUE RANK VALUE RANK VALUE RANK5.01 83 15.82 15 7.08 57 16.73 110.42 38 13.19 44 7.44 52 9.08 99
Bennett Lawrence All Cap Growth Composite*Performance returns are preliminary as of March 31, 2013.• Returns are time weighted. The All Cap Growth Composite includes all fully discretionary accounts under management. Figures are not audited and are subject tochange. Individual investor results will vary.• For the period 1/87 to 3/93, the All Cap Growth Composite (the “Composite”) was comprised of one non-fee paying account. This account was the only accountunder Van Schreiber’s management from 1987 through the third quarter of 1992. The All Cap Growth Composite figures for the period 1/87 to 8/95 reflect theperformance of assets managed exclusively by Van Schreiber while he was affiliated with Deutsche Morgan Grenfell/C.J. Lawrence Inc.From 1/87 to 12/94 the limited use of leverage was employed in the non-fee paying account through the borrowing of money to finance purchases (margin) and theselling of securities not owned (short selling). Over the period, average monthly (i) margin balances and (ii) short positions were each less than 5% of the portfoliovalue. Leverage, which amplifies both gains and losses, is not employed in client portfolios and is not a part of the Growth Equity Strategy.• Performance results are net of commissions paid on securities transactions and margin interest paid, and include dividends and interest earned.• Net returns reflect the deduction from the gross returns of an annual 1% management fee charged on a quarterly basis, which represents the highest advisory fee.Bennett Lawrence Management, LLC• The information provided in this report should not be considered a recommendation to purchase or sell any particular security. There is no assurance that any of theinvestments identified herein will remain in portfolios managed by Bennett Lawrence Management, LLC (BLM) or that information provided herein will remain thesame at the time you receive this report. The investments identified do not represent all of the investments purchased, sold or held by portfolios managed by BLM.It should not be assumed that investments were or will be profitable.• Portfolio characteristics are calculated by Bennett Lawrence Management, LLC, FactSet and PSN-Effron Enterprises, Inc.Russell Russell 3000 Growth Index & S&P 500 Index• The figures for the Russell Index and S&P 500 Index include dividends received and their reinvestment. The index returns do not, however, reflect any brokeragecommissions or management fees that might be incurred in actually investing in the securities representing these indexes. The Russell Investment Group is thesource and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell® is a trademark of Russell Investment Group. Indexreturns are calculated by the Frank Russell Company and Standard and Poor’s.• An investor cannot directly invest in an index.PSN Universe• The PSN universe is comprised of a group of composites/products with a similar investment objective. Performance is calculated by PSN. Performance is gross offees. Gross returns do not reflect the deduction of investment advisory fees. The deduction of such fees or other expenses will reduce a client’s return.DisclosuresPast performance is not a guarantee of future results.
All Cap Growth Composite ("Composite") contains fully discretionary all cap growth accounts and for comparison purposes is measured against the Russell 3000 Growth Index.Bennett Lawrence Management, LLC (BLM) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance withthe GIPS standards. BLM has been independently verified for the periods October 1, 1997 through December 31, 2007 by Ashland Partners & Company LLP.Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and proceduresare designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation. The Compositehas been examined for the periods October 1, 1997 through December 31, 2007. The verification and performance examination reports are available upon request.BLM is an independent investment adviser registered under the Investment Advisers Act of 1940. The Growth Equity Composite was created October 1995 and the name changed January 1,2011 to the All Cap Growth Composite. A list of composite descriptions is available upon request.Effective January 1, 2011, the benchmark was changed from the Russell Midcap Growth Index to the Russell 3000 Growth Index. The Russell 3000 Growth Index measures the performanceof the broad growth segment of the U.S. equity universe. It includes those Russell 3000 companies with higher price-to-book ratios and higher forecasted growth values. The Russell 3000Growth Index is constructed to provide a comprehensive, unbiased, and stable barometer of the broad growth market. This change was made to better reflect a broader range of market capexposure; as the Composite does not have defined market cap parameters.Returns are based on fully discretionary accounts under management, including those accounts no longer with the firm. The U.S. Dollar is the currency used to express performance returns.Returns are net of commissions on securities transactions and margin interest paid, and includes dividends and interest earned. Gross returns are gross of management fees paid. Net returnsreflect the deduction from the gross returns of an annual 1% management fee charged on a quarterly basis, which represents the highest advisory fee. The management fee schedule for thestrategy is 1% on the first $5 million and 0.75% thereafter and is charged on a quarterly basis. Actual management fees incurred by clients may vary. Past performance is not indicative offuture results.Net of sponsor fee returns are calculated using an annual 1% sponsor fee, charged on a quarterly basis, which represents the highest sponsor fee provided. The sponsor fee is in addition to theadvisory fee. Sponsor fee accounts pay an all-inclusive fee to the sponsor based on a percentage of assets under management. Other than brokerage commissions, this fee may includeinvestment management, portfolio monitoring, consulting services, and in some cases, custodial services. Gross returns are supplemental for the periods that include sponsor accounts.Sponsor fee schedules are provided by independent wrap sponsors and are available upon request from the respective wrap sponsor.The annual composite dispersion presented is an asset-weighted standard deviation calculated for the accounts in the composite the entire year. Additional information regarding the policiesfor calculating and reporting returns is available upon request.The composite policy prior to January 1, 2011 required the temporary removal of any portfolio incurring a client initiated significant cash flow where there is a 50% or greater inflow or a10% or greater outflow of the portfolio assets. The significant cash inflow or outflow generated multiple transactions that would not fully represent the strategy. The temporary removal ofsuch an account to a non-discretionary composite occurred at the beginning of the calendar quarter in which the significant cash flow occurs and the account re-entered the composite at thebeginning of the calendar quarter following a full calendar quarter after the cash flow. The composite policy now requires the temporary removal of any portfolio incurring a client initiatedsignificant cash flow where there is a 25% or greater inflow or outflow of the portfolio assets. The significant cash inflow or outflow would generate multiple transactions that would not fullyrepresent the strategy. The temporary removal of such an account to a non-discretionary composite occurs at the beginning of the calendar quarter in which the significant cash flow occursand the account re-enters the composite at the beginning of the calendar quarter following, at minimum, 30 calendar days after the cash flow. Additional information regarding the treatmentof significant cash flows is available upon request.All Cap Growth Composite GIPS Compliant PresentationAnnual Disclosure
The investment performance statistics reflect the investment performance record of Mr. Suydam Van Zandt Schreiber as a portfolio manager. Mr. Schreiber is currently the Managing Memberand Chief Portfolio Manager of the growth equity discipline at BLM. Prior to forming BLM in August 1995, Mr. Schreiber created a growth equity investment discipline that he used tomanage portfolios while he was employed at Deutsche Morgan Grenfell/C.J. Lawrence, Inc. His strategy was marketed as “Premium Growth Equity,” and he was the only portfolio managerresponsible for investment decisions that affected this product. From January 1, 1987 to December 31, 1995 the Composite returns are based on the eligible portfolios under Mr. Schreiber’smanagement that were also under Mr. Schreiber’s management at BLM for the entire fourth quarter of 1995. Composite portfolios, assets and performance from 1996 forward are based on alleligible portfolios under BLM’s management.For the period from January 1, 1987 to March 31, 1993, the Composite was comprised of one non-fee-paying account. This account was the only account under Mr. Schreiber’s managementfrom January 1, 1987 through September 30, 1992 and it was the only non-fee-paying account included in the composite from 1987 through 1996. Non-fee-paying account percentage from1987 to 1992: 100%, 1993: 73%, 1994: 16%, 1995: 11% and 1996: 3%. No non-fee-paying accounts were included from 1997 forward.In the period from January 1, 1987 to December 31, 1994, the limited use of leverage was employed in the one non-fee-paying account through the borrowing of money to finance purchases(margin) and the selling of securities not owned (short selling). Over the period, average monthly (i) margin balances and (ii) short positions were each less than 5% of the portfolio value.Leverage, which amplifies both gains and losses, is not employed in client portfolios and is not a part of the growth equity strategy.The figures for the Russell 3000 Growth Index and the Russell Midcap Growth Index include dividends received and their timely reinvestment. The Index returns do not however, reflect anybrokerage commissions or management fees that might be incurred in actually investing in the securities representing these indexes. The Index returns are calculated by the Frank RussellCompany.At December 31, 2011, the three-year annualized ex-post standard deviation of the Composite’s gross returns, the Russell 3000 Growth Index and the Russell Midcap Growth Index are 1.77%,1.74% and 1.82%, respectively.All Cap Growth Composite GIPS Compliant PresentationAnnual Disclosure