Richard Pzena

Richard Pzena’s latest 13F shows a portfolio that is almost entirely a bet on deep value, with no attempt to hedge that conviction through growth or defensive names. His top five holdings are concentrated in financials and energy, led by a large position in a major U.S. bank and a supermajor oil producer. The weighting is aggressive: the top ten positions account for roughly 40% of reported equity assets, a level that puts him well outside the average large-cap value manager. The quarter’s activity was telling. Pzena added to his largest bank holding and trimmed a consumer staples name that had appreciated, a classic value discipline of selling strength to buy weakness. He also initiated a new position in a beaten-down European industrial, a sector where many U.S. peers have retreated. That move diverges from the broader trend among value funds, which have been rotating into healthcare and utilities for perceived safety. Pzena is doing the opposite, leaning into cyclical exposure at a point when consensus expects a slowdown. His style is pure price-to-book and normalized earnings, not quality or momentum. He holds several companies with negative trailing earnings, a stance most institutional investors avoid. The portfolio’s weighted average price-to-book is roughly 0.9, versus 2.1 for the Russell 1000 Value index. That gap is the entire story: Pzena is buying assets the market has written off, and his recent buys suggest he sees the current cycle as closer to a trough than a cliff. There is no cash buffer of note, and no options overlay. The positioning is a direct statement that the cheapest stocks, not the safest ones, offer the best risk-adjusted return from here.