UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. __)
Pzena Investment Management, Inc.
(Name of Issuer)
Class A Common Stock, Par Value $0.01 Per Share
(Title of Class of Securities)
74731Q103
(CUSIP Number)
Pamela M. Krill
Godfrey & Kahn, S.C.
One East Main Street, Suite 500
Madison, Wisconsin 53703-3300
(608) 257-3911
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Filing Persons)
_______________________________
September 1, 2022
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. [x]
NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.
The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
| CUSIP NO. 74731Q103 | |||
| 1. |
NAME OF REPORTING PERSON Punch & Associates Investment Management, Inc. | ||
| 2. |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] | ||
| 3. | SEC USE ONLY | ||
| 4. |
SOURCE OF FUNDS OO | ||
| 5. |
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] | ||
| 6. |
CITIZENSHIP OR PLACE OF ORGANIZATION Minnesota | ||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7. |
SOLE VOTING POWER 0 | |
| 8. |
SHARED VOTING POWER 1,999,521 shares | ||
| 9. |
SOLE DISPOSITIVE POWER 0 | ||
| 10. |
SHARED DISPOSITIVE POWER 1,999,521 shares | ||
| 11. |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,999,521 shares | ||
| 12. |
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] | ||
| 13. |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 12.0% |
| 14. |
TYPE OF REPORTING PERSON IA |
| CUSIP NO. 74731Q103 | |||
| 1. |
NAME OF REPORTING PERSON Howard D. Punch, Jr. | ||
| 2. |
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] | ||
| 3. | SEC USE ONLY | ||
| 4. |
SOURCE OF FUNDS OO | ||
| 5. |
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) [ ] | ||
| 6. |
CITIZENSHIP OR PLACE OF ORGANIZATION United States of America | ||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH | 7. |
SOLE VOTING POWER 45,542 | |
| 8. |
SHARED VOTING POWER 1,999,521 shares | ||
| 9. |
SOLE DISPOSITIVE POWER 45,542 | ||
| 10. |
SHARED DISPOSITIVE POWER 1,999,521 shares | ||
| 11. |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,999,521 shares | ||
| 12. |
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] | ||
| 13. |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 12.0% |
| 14. |
TYPE OF REPORTING PERSON IN, HC |
Item 1. Security and Issuer
This statement on Schedule 13D relates to the Class A common stock, $0.01 par value (the “Common Stock”), of Pzena Investment Management, Inc., a Delaware corporation (the “Company”), with its principal executive offices located at 320 Park Avenue, New York, New York 10022.
Item 2. Identity and Background
This Statement is being filed by Punch & Associates Investment Management, Inc., a Minnesota Corporation (“Punch & Associates”), and Howard D. Punch, Jr. (collectively, the “Reporting Persons”).
Punch & Associates is an independent investment adviser registered with the Securities and Exchange Commission that provides investment advisory services to a variety of clients (collectively, the “Client Accounts”). As investment adviser to the Client Accounts, Punch & Associates has the authority to invest the funds of the Client Accounts in securities (including shares of Common Stock of the Company), as well as the authority to purchase, vote and dispose of such securities, and thus may be deemed to be the beneficial owner of the shares of the Company’s Common Stock held by Punch & Associates on behalf of such Client Accounts. The principal address of Punch & Associates is 7701 France Ave. So., Suite 300, Edina, MN 55435.
Mr. Howard D. Punch, Jr., is the President as well as control person of Punch & Associates. By virtue of his control of Punch & Associates, Mr. Punch may be deemed to have a beneficial interest in the shares of the Company’s Common Stock held by Punch & Associates on behalf of the Client Accounts, and therefore, may be deemed the indirect beneficial owner of these shares. In addition, Mr. Punch may exercise direct voting or dispositive power over an additional 45,542 shares of Common Stock of the Company. Mr. Punch disclaims beneficial ownership of all shares of Common Stock, other than those shares of Common Stock for which he may exercise direct voting or dispositive power. The business address of Mr. Punch is 7701 France Ave. So., Suite 300, Edina, MN 55435.
During the last five years, the Reporting Persons have not been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgement, decree or final order enjoining future violations of, or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
All shares of Common Stock of the Company held by Punch & Associates on behalf of Client Accounts were purchased with funds provided by the Client Accounts.
Mr. Punch acquired the additional 45,542 shares of Common Stock of the Company individually through personal funds.
Item 4. Purpose of Transaction
All securities have been acquired for investment purposes only. On July 26, 2022, the Company announced shares of Class A Common Stock were to be acquired by a subsidiary of the Company for $9.60 per share in an effective take private transaction by the management, employees and Board of Directors of Pzena Management, Inc. (the “Transaction”). On September 1, 2022, Punch & Associates sent a letter to the Board of Directors of the Company objecting to the Transaction under the proposed terms. A copy of the letter to the Board of Directors of the Company is attached to this Schedule 13D as Exhibit 7.2. Other than as described in the previous two sentences, the Reporting Persons have no present plans or proposals that relate to or would result in any of the actions enumerated in Item 4 of Schedule 13D. The Reporting Persons may from time to time acquire additional shares of Common Stock of the Company in open market transactions. Alternatively, the Reporting Persons may sell all or a portion of the Common Stock reported on this Schedule 13D. In addition, the Reporting Persons may formulate other purposes, plans or proposals regarding the Company or its Common Stock to the extent the Reporting Persons deem advisable in light of general investment and trading policies, market conditions and other factors.
Item 5. Interest in Securities of the Issuer
| (a) | See items 11 and 13 of the cover pages. |
(b) See items 7, 8, 9, and 10 of the cover pages.
(c) See Annex 1 attached hereto containing a record of transactions in the Company’s Common Stock in the past 60 days.
(d) Not applicable.
(e) Not Applicable.
To the best of Punch & Associate’s knowledge, no Client Accounts owns more than 5% of the shares of the Company’s Common Stock presently outstanding.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
As described in Item 4 above, Punch & Associates sent a letter dated September 1, 2022 to the Company, attached hereto as Exhibit 7.2, concerning the Company’s announcement of the Transaction.
Item 7. Material to Be Filed as Exhibits
| Exhibit No. | Description |
| 7.1 | Joint Filing Agreement |
| 7.2 | Letter dated September 1, 2022 to the Board of Directors of the Company |
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
| Dated: September 1, 2022 |
PUNCH & ASSOCIATES INVESTMENT MANAGEMENT, INC.
/s/ Howard D. Punch, Jr. |
| Howard D. Punch, Jr. President |
|
HOWARD D. PUNCH, JR.
/s/ Howard D. Punch, Jr. | |
Annex 1
Transactions in the Common Stock of the Company During the Past Sixty (60) Days
| Trade Date | Reporting Person | Activity(1) | Number of Shares | Price per Share ($) |
| 7/5/2022 | Punch & Associates Investment Management, Inc. | Purchase | 5500 | $ 6.68 |
| 7/6/2022 | Punch & Associates Investment Management, Inc. | Purchase | 600 | $ 6.78 |
| 7/6/2022 | Punch & Associates Investment Management, Inc. | Purchase | 1884 | $ 6.77 |
| 7/7/2022 | Punch & Associates Investment Management, Inc. | Purchase | 273 | $ 6.94 |
| 7/7/2022 | Punch & Associates Investment Management, Inc. | Purchase | 3531 | $ 6.92 |
| 7/7/2022 | Punch & Associates Investment Management, Inc. | Purchase | 2966 | $ 6.92 |
| 7/8/2022 | Punch & Associates Investment Management, Inc. | Purchase | 450 | $ 6.88 |
| 7/8/2022 | Punch & Associates Investment Management, Inc. | Purchase | 185 | $ 6.98 |
| 7/8/2022 | Punch & Associates Investment Management, Inc. | Purchase | 4326 | $ 6.88 |
| 7/8/2022 | Punch & Associates Investment Management, Inc. | Purchase | 1015 | $ 6.90 |
| 7/11/2022 | Punch & Associates Investment Management, Inc. | Purchase | 335 | $ 6.90 |
| 7/12/2022 | Punch & Associates Investment Management, Inc. | Purchase | 180 | $ 6.51 |
| 7/21/2022 | Punch & Associates Investment Management, Inc. | Purchase | 3400 | $ 6.77 |
| 7/21/2022 | Punch & Associates Investment Management, Inc. | Purchase | 330 | $ 6.79 |
| 7/21/2022 | Punch & Associates Investment Management, Inc. | Purchase | 81 | $ 6.83 |
| 7/22/2022 | Punch & Associates Investment Management, Inc. | Purchase | 352 | $ 6.92 |
| 7/22/2022 | Punch & Associates Investment Management, Inc. | Purchase | 638 | $ 6.93 |
| 7/22/2022 | Punch & Associates Investment Management, Inc. | Purchase | 121 | $ 6.96 |
| 7/22/2022 | Punch & Associates Investment Management, Inc. | Purchase | 219 | $ 6.92 |
| 7/22/2022 | Punch & Associates Investment Management, Inc. | Purchase | 923 | $ 6.92 |
| 7/22/2022 | Punch & Associates Investment Management, Inc. | Purchase | 1666 | $ 6.92 |
| 7/29/2022 | Punch & Associates Investment Management, Inc. | Purchase | 405 | $ 9.48 |
| 8/23/2022 | Punch & Associates Investment Management, Inc. | Purchase | 522 | $ 9.52 |
| 8/23/2022 | Punch & Associates Investment Management, Inc. | Purchase | 4478 | $ 9.53 |
| 8/23/2022 | Punch & Associates Investment Management, Inc. | Purchase | 521 | $ 9.53 |
| 8/23/2022 | Punch & Associates Investment Management, Inc. | Purchase | 4479 | $ 9.52 |
| 8/23/2022 | Punch & Associates Investment Management, Inc. | Purchase | 482 | $ 9.52 |
| 8/23/2022 | Punch & Associates Investment Management, Inc. | Purchase | 4143 | $ 9.53 |
| 8/30/2022 | Punch & Associates Investment Management, Inc. | Purchase | 385 | $ 9.55 |
| 8/30/2022 | Punch & Associates Investment Management, Inc. | Purchase | 395 | $ 9.55 |
| 7/14/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 95 | $ 6.27 |
| 7/28/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 650 | $ 9.43 |
| 7/29/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 1.536 | $ 9.43 |
| 7/29/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 5.036 | $ 9.42 |
| 7/29/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 5.927 | $ 9.42 |
| 7/29/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 7.655 | $ 9.43 |
| 7/29/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 295 | $ 9.42 |
| 7/29/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 42.839 | $ 9.42 |
| 7/29/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 9.871 | $ 9.42 |
| 7/29/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 8.169 | $ 9.42 |
| 7/29/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 7.489 | $ 9.42 |
| 7/29/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 110 | $ 9.42 |
| 7/29/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 38.66 | $ 9.42 |
| 7/29/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 56.148 | $ 9.42 |
| 7/29/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 228 | $ 9.42 |
| 7/29/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 100 | $ 9.42 |
| 7/29/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 9.102 | $ 9.42 |
| 7/29/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 24.568 | $ 9.42 |
| 8/1/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 82 | $ 9.29 |
| 8/1/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 38 | $ 9.29 |
| 8/3/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 38.339 | $ 9.47 |
| 8/3/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 175.661 | $ 9.47 |
| 8/10/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 45 | $ 9.54 |
| 8/10/2022 | Punch & Associates Investment Management, Inc. | (Sale) | 425 | $ 9.54 |
(1) All trades were made in the open market.
Exhibit 7.1
Exhibit 7.1 – Joint Filing Agreement
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned hereby agree to the joint filing with all other Reporting Persons (as such term is defined in the Schedule 13D) on behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to Class A Common Stock and to the attachment of this agreement to the Schedule 13D as Exhibit 1 thereto.
IN WITNESS WHEREOF, the undersigned hereby execute this Agreement this 1st day of September, 2022.
| Dated: September 1, 2022 |
PUNCH & ASSOCIATES INVESTMENT MANAGEMENT, INC.
/s/ Howard D. Punch, Jr. |
| Howard D. Punch, Jr. President |
| Dated: September 1, 2022 |
HOWARD D. PUNCH, JR.
/s/ Howard D. Punch, Jr. |
Exhibit 7.2

September 1, 2022
Members of the Board of Directors
Pzena Investment Management, Inc.
320 Park Avenue
New York, New York 1002
Dear Members of the Board of Directors,
Punch & Associates Investment Management, Inc. (collectively, “we” or “our”) has been a shareholder of Pzena Investment Management, Inc. (the “Company” or “Pzena”) continuously since 2009, and we currently own approximately 12% of the Class A common stock outstanding.
For much of our 13 years of ownership, the market environment has been characterized by a long and pronounced anti-value cycle, placing pressure on both Pzena’s fundamentals and the market multiple of shares. Throughout this challenging period, we routinely listened to Mr. Pzena project confidence during earnings calls that the cycle would eventually turn, and that the Company would be both recognized and rewarded by allocators for sticking to its value investing principles.
Over the last 18 months, there has been broad relative outperformance for the value investing discipline which we believe is beginning to drive increased adoption of value by allocators. Further evidence of this can be seen in recent weeks with Pzena being selected as a co-manager of the $7 billion Vanguard Global Equity Fund, representing one of the largest single inflows in company history.
We are dismayed the Pzena Board of Directors’ Special Committee is recommending long-suffering shareholders sell their shares at a price well below recent share repurchases during five consecutive quarters, below the 52-week high stock price, and below our calculation of both peer and comparable acquisition multiples despite the business fundamentals and near-term opportunity set finally experiencing a marked improvement. We believe the proposed transaction is nothing more than an opportunistic bid for illiquid shares during a weak market by Pzena insiders, at the expense of minority shareholders.

The recently filed proxy statement reveals that:
| · | The Special Committee failed to run a formal sale process in 2022. Instead, it relied on the results from a limited sale process during 2020, which happened to be in the middle of a global pandemic and during a completely different environment for value investing. |
| · | No control premium was included in the valuation consideration. |
| · | Pzena management recognized the bid was opportunistic and taking advantage of a market correction. On July 6th the acquirers requested the Special Committee “move expeditiously”, a time when both the market and Pzena shares were trading near 52-week lows. |
In our opinion, the price of $9.60 per share materially undervalues the intrinsic value of the Company. We urge the Special Committee to renegotiate the transaction price to include a control premium which we would expect in any “take private” transaction, and not settle for an opportunistic bid for an illiquid stock in a market downturn. The $9.60 offer price is not attractive relative to the stock’s recent trading history or recent Company share repurchases. It certainly does not reflect the improving business fundamentals finally being experienced.
Shareholders have waited patiently through the anti-value cycle for much of the last decade, and the Special Committee must not forget their fiduciary duty to all shareholders as the cycle finally begins to turn. As shareholders for the past 13 years, we believe that we have demonstrated a willingness to be patient. If the offer is not revised materially higher, we are happy to remain shareholders of the Company and will vote our shares accordingly.
Respectfully,
Punch & Associates Investment Management, Inc.
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