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 period January 1, 1993 through December 31, 2014.  

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 procedures are designed to calculate and present performance in compliance with the GIPS standards.  Verification does not ensure the accuracy of any specific composite presentation. The Large Cap Value Equity Composite has been examined for the period from January 1, 1993 through December 31, 2014.  The verification and examination reports are available upon request.

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.

The Cooke & Bieler Large Cap Value Equity Composite (Composite), whose inception date is January 1, 1977, currently includes all fully discretionary, fee paying, large cap value equity tax-exempt portfolios managed for more than one quarter. Prior to 2013, the minimum market value for inclusion in the composite was $1 million. Prior to July 1, 2010, the Composite included only employee benefit tax-exempt portfolios. For investment purposes, our style is most closely related to the large cap equity investor. We generally purchase securities whose market capitalizations are within the range of the Russell 1000® Index at the time of purchase. Securities are selected using the firm’s fundamental, bottom-up approach. Portfolios are more concentrated, typically holding approximately 40-50 securities. The Composite was created in January 1997.

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 and are calculated using the Modified Dietz method.  Beginning January 1, 1997, composite returns are calculated monthly by weighting portfolio returns according to the size of each portfolio at the beginning of the month.  Previously, composite returns were calculated quarterly by weighting quarterly portfolio returns according to the size of each portfolio at the beginning of the quarter. 

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. The standard fee agreement is 0.65 of 1% per annum on the first $20 million of principal, 0.60 of 1% per annum on the next $20 million of principal, 0.50 of 1% per annum on the next $60 million of principal, and 0.40 of 1% per annum on the remaining balance; however, fees are negotiable.  As an example, the “cost” of the investment advisory fee of a $20 million portfolio is .65% on an annualized basis.  In a ten-year period, the effect of the investment advisory fee will reduce a 5% annual return by as much as 10.3% on a cumulative basis. The actual fee charged may depend on the asset size and type of portfolio.  Net of fee returns are calculated quarterly by deducting one quarter of the maximum fee rate of 0.65% from the gross of fee Composite return.  From 1/1/2007 through 12/31/2010, net of fee returns reflected the deduction of actual management fees, and were calculated in the same manner as gross of fee returns.  

The dispersion is measured using an asset weighted standard deviation of portfolio returns represented within the Composite for the full year. A list of composite descriptions is available upon request.  Policies for valuing portfolios, calculating performance, and preparing compliant presentations are also available upon request.

For comparison purposes, the composite is measured against the Russell 1000® Value Index and the S&P 500® Index. Prior to 1/1/15, the S&P 500® Index was shown as the primary benchmark and the Russell 1000® Value was the secondary benchmark.  The change was made to better reflect how the strategy is managed. The indices returns are provided to represent the environment existing during the periods shown and are not covered by the report of the independent verifiers.  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.  Russell Investment Group is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes.  Russell® is a trademark of Russell Investment Group.  The S&P 500® Index is a trademark of McGraw-Hill, Inc. and has been licensed for use by Cooke & Bieler.

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 prior to 2011 or when 36 monthly composite returns are not available. Past performance is not indicative of future results.