LSV Asset Management

LSV Asset Management is a “quantitative value manager providing active management for institutional investors through the application of proprietary investment models” and was founded in 1994. The name came from the three original founding partners: Josef Lakonishok, formerly a professor of finance at UIUC; Andrei Shleifer, a professor of economics at Harvard University; and Robert Vishny, a distinguished finance professor at the University of Chicago. Josef Lakonishok is the only one of the three original founders still active in the firm, serving as the leader of the company, while the others have retired and taken to academics. The firm has evolved from its original structure to 24 equity partners who are all actively involved in LSV Asset Management, with current and former employees holding the majority stock in the firm. The firm was founded on grounded financial research, which all three of the founders were known for, consisting of a totaled three decades experience and over 200 research papers. Their investment philosophy is still grounded in behavioral finance, maintaining that “superior long-term results can be achieved by systematically exploiting the judgmental biases and behavioral weaknesses that influence the decisions of many investors.” LSV Asset Management takes care to avoid overuse of the past to extrapolate the future, incorrectly correlate a good company with a good investment, and employing qualitative opinions rather than hard statistical evidence. The company utilizes a focused quantitative model to operate its investments, looking for undervalued stocks that have a good potential for near term appreciation. Portfolios are fully invested, keeping company cash levels below 2%, and have a “deep value orientation relative to the indices.” The company currently has approximately $90 billion in value equity portfolios from 350 clients. LSV Asset Management’s mutual funds include its Value Equity, Conservative Value Equity, Small Cap Value, Global Value, U.S. Managed Volatility, and Global Managed Volatility funds.