FROM: Lisa Sorani, Manager of HR Employee Services LS -

M E M O R A N D U M
Date: April 29, 2013
To:
East Bay Municipal Utility District (EBMUD)
From: Pension Consulting Alliance, Inc. (PCA) cc: Eric White – PCA
Jeremy Thiessen – PCA
RE:
Barrow Hanley “Heightened Monitoring” Status Recommendation
Summary
PCA recommends that EBMUD place the Barrow, Hanley, Mewhinney & Strauss Large Cap
Value (Barrow Hanley) account on heightened monitoring status to be closely monitored over
the next 12 to 18 months. As of March 31, 2013, Barrow Hanley’s gross of fees trailing 12-
month performance underperformed their benchmark, the Russell 1000 Value Index, by (5.6%),
falling below EBMUD’s short-term 1 Manager Heightened Monitoring Criteria.
Discussion
EBMUD retained Barrow Hanley to manage approximately $109.3 million for the large cap value
portion of its investment portfolio during the third quarter of 2005. EBMUD’s total exposure to the
Barrow Hanley Large Cap Value account was approximately $152.4 million as of March 31, 2013.
Over the past 1-year period Barrow Hanley has underperformed their benchmark, the Russell
1000 Value Index, by (5.6%). Over the past 3- and 5-year periods Barrow Hanley has
underperformed by (1.8%) and outperformed by 1.1% per annum, respectively. Since inception,
Barrow Hanley has matched its benchmark with a 5.0% return.
1 Short-term criteria: Underperformance greater than (3.5%) in a trailing 12-month period gross of fees.