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Item No. 6: Annual Presentation by Earnest Partners – Small Cap Value Equity Manager (February 11, 2015, Regular Retirement Board Meeting)

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INVESTMENT MANAGER SUMMARY

MANAGEMENT Firm Name Earnest Partners Manager Tenure with Fund 10.25 years Investment Strategy/Vehicle Small Cap Value Equity Contract Expiration 8/31/2016

ASSETS Total Firm AUM (as of 12/31/14) $23.2 Billion Total Firm Assets in Strategy (as of 12/31/14) $3.7 Billion Total Assets Managed for WPERP (as of 12/31/14)

RP - $152.1 Million HP - $25.9 Million

PERFORMANCE

as of 12/31/2014 1-Year 3-Year Inception* Earnest Partners (gross) 11.11% 20.23% 8.76% Earnest Partners (est. net) 10.69% 19.61% 8.07% Russell 2000 Value Index 4.22% 18.29% 7.08% Difference (net) 6.47% 1.32% 0.99% *Inception date of 11/30/04

FEES Current Fee 0.57% Blended

WATCH STATUS Not Applicable

PREVIOUSLY DISCLOSED LITIGATION Not Applicable

[email protected] WWW.EARNESTPARTNERS.COM

Los Angeles Department of Water & Power Retirement Plan and Retirees Health Benefit Fund February 11, 2015

1180 PEACHTREE STREET + SUITE 2300 ATLANTA + GA + 30309

Presenters

Jessie Magee, CFA Partner

Mr. Magee is responsible for research and portfolio management at EARNEST Partners. Prior to joining EARNEST Partners, he spent more than 7 years in the Research & Advanced Vehicle Technology division of Ford Motor Company working on alternative fuel technologies, occupant safety, and new product development. Later, he worked in Corporate Finance at Intel Corporation where he developed strategies to improve semiconductor materials sourcing and support price negotiations with Intel’s strategic suppliers. He also spent six years in the Army National Guard as a Combat Engineer. He holds a BS in Mechanical Engineering from Southern University, an MS in Mechanical Engineering from the University of Michigan, and an MBA from Emory University. He is also a member of the CFA Institute and the Atlanta Society of Financial Analysts.

Margaret Champagne Wright, CPA Director

Ms. Wright is responsible for product management at EARNEST Partners. Prior to joining EARNEST Partners, Ms. Wright worked for Ernst & Young, specializing in real estate and financial service engagements. In addition to her audit engagements, Ms. Wright worked on special projects helping companies implement International Financial Reporting Standards and Sarbanes Oxley regulations. She is a magna cum laude graduate of the University of Georgia with a BA in International Business and a Masters of Science in Accounting from The University of Virginia's McIntire School of Commerce. Ms. Wright is a licensed CPA and a member of the American Institute of Certified Public Accountants (AICPA).

Los Angeles Department of Water & Power Retirement Plan and Retirees Health

Benefits Fund February 11, 2015

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EARNEST Partners Background

Firm Assets Under Management ($ Billions)

12/31/2014 Total Assets under Management 23.2

Total Small Cap Value 3.7



* AUM are updated on a quarterly basis.

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Paul E. Viera CEO and Partner Mr. Viera is the founder of EARNEST Partners, an investment firm responsible for overseeing over $20 billion for municipalities, states, corporations, endowments, eleemosynary groups, and universities. He developed Return Pattern Recognition®, the investment methodology used to screen equities at EARNEST Partners. He has a BA in Economics from the University of Michigan, an MBA from the Harvard Business School, and has over twenty-five years of investment experience. Mr. Viera was a Vice President at Bankers Trust in both New York and London. He later joined Invesco, where he became a Global Partner and senior member of its Investment Team. Mr. Viera is a Trustee of the Woodruff Arts Center and a member of its investment committee, a member of the Council on Foreign Relations, a member of Haitong Securities (second largest Chinese securities firm) board of Foreign Advisors, a board member for the National Center for Human & Civil Rights, and the Atlanta Society of Financial Analysts. He is also a commentator for several news organizations, including, among others, CNBC and Bloomberg News.

Douglas S. Folk, CFA Partner Mr. Folk is a portfolio management and research professional at EARNEST Partners with over twenty years of investment experience. He holds a BA degree from Millsaps College and an MBA from Millsaps' Else School of Management. He has extensive experience with government, corporate, mortgage-backed and asset-backed securities. His prior experience includes ten years of portfolio management with Southern Farm Bureau Life Insurance Company, where he was responsible for the company's fixed-income portfolio. He is a member of the Atlanta Society of Financial Analysts.

Investment Team Los Angeles Department of Water & Power Retirement Plan and Retirees Health


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Trey Greer, CFA, CPA Partner Mr. Greer is responsible for research and portfolio management activities at EARNEST Partners. He has a BS in Business Administration and a Master of Accounting from the University of North Carolina at Chapel Hill and an MBA from Emory University. He has fifteen years of investment experience and began his career in public accounting. He later joined AMVESCAP PLC where he was an Investment Manager with assignments in London, Houston, and Atlanta. He is a member of the CFA Institute, the Atlanta Society of Financial Analysts, and the American Institute of Certified Public Accountants. Chris Hovis, CFA Partner Mr. Hovis is responsible for research and portfolio management at EARNEST Partners. Prior to joining EARNEST Partners, he served as a Senior Analyst with Morgan Keegan where he was an analyst in US Software. His extensive background also includes experience in the information technology industry as well as in Equity Research with SunTrust Robinson Humphrey and CQ Partners. Previously, he was VP of Marketing and Business Development at Lancope, and a senior software engineer at Intel and Alliance Semiconductor. He holds an MBA with Distinction from The Wharton School of Business and Bachelor degrees with Highest Honors in Electrical Engineering from Georgia Tech and in Physics from Centre College.

Jessie Magee, CFA Partner Mr. Magee is responsible for research and portfolio management at EARNEST Partners. He graduated with a BS in Mechanical Engineering from Southern University and also holds an MS in Mechanical Engineering from the University of Michigan as well as an MBA from Emory University. He began his career in Research & Vehicle Technology at Ford Motor Company where he spent seven years working on alternative fuel technologies, occupant safety, and new product development. Later, he worked in Corporate Finance at Intel Corporation, where he developed strategies to proliferate the usage of reverse internet auctions for semi-conductor materials procurement. He also spent six years in the Army National Guard as a Combat Engineer.

Investment Team Los Angeles Department of Water & Power Retirement Plan and Retirees Health


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Investment Team

Patmon Malcom, CFA Partner Mr. Malcom is responsible for product management at EARNEST Partners. Additionally, he serves as a Board Director for the firm’s UCITS fund. He is a graduate of the United States Military Academy at West Point where he led the Varsity Football team in scoring for three consecutive years. In his senior year, he was named the "Chevrolet Player of the Game" in the annual Army-Navy game. He holds an MBA from Emory University, where he was a recipient of the 2003 Donald Keough Scholarship. Prior to joining EARNEST Partners, he worked in the Global Investment Bank for JPMorgan Chase in New York. He also served as a helicopter pilot in the United States Army for more than seven years, an experience that included leading a Blackhawk Helicopter Company along the demilitarized zone between North and South Korea. Mr. Malcom is a member of the CFA Institute and the Atlanta Society of Financial Analysts.

Tammy Qiuhong Tang Partner Ms. Tang is responsible for both leading the growth of EARNEST Partners in China as well as conducting equity research. She holds a BS in English Literature from Beijing Foreign Studies University, a BA in Business Administration from University of California, Riverside, and an MBA from the University of Southern California. She began her career with General Electric, China. Later, she worked as a senior manager in the Investment Bank at Haitong Securities Company, where she focused on IPOs and follow-on issues. Prior to joining EARNEST Partners, she served as Director of the International Relationship Department of the Securities Association of China. Chris Fitze, CFA Director Mr. Fitze is responsible for research and portfolio management at EARNEST Partners. As a member of the fixed income team, Mr. Fitze responsibilities range from insurance cash flow testing to valuation of secured corporate debt. He holds an MBA from the University of Chicago Booth School of Business and a BA in Economics from Emory University, where he was an Academic All-American in golf and a member of the International Economics Honor Society. His graduate studies concentrated on the impact of fiscal and monetary policy on interest rates along with other areas of finance and economics. He is also a member of the CFA Institute and the Atlanta Society of Financial Analysts.



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Investment Team

Dinkar Singh, Ph.D. Director Dr. Singh is responsible for research and portfolio management at EARNEST Partners. Prior to joining EARNEST Partners, he worked for more than five years at the IBM Research Center in the Silicon Technology group. Leading a team of Ph.D.s/engineers, he helped develop semiconductor technology for next-generation electronic chips, resulting in the first demonstration of an advanced memory and world record chip speed and was awarded five U.S. patents with four additional patent applications pending. Dr. Singh has a Ph.D. from Stanford University in Applied Physics, an MBA with high honors from University of Chicago, and studied previously at the Indian Institute of Technology.

Richard Burgess Investment Management Mr. Burgess is responsible for research and portfolio management at EARNEST Partners, with coverage responsibilities including the defense, transportation, and materials industries, among others. Prior to joining EARNEST Partners, Mr. Burgess served as an Artillery Officer in the United States Army, with duties ranging from tactical planning for combat operations to intelligence gathering and dissemination. His military experience includes a combat tour in Iraq, during which he earned the Bronze Star Medal for meritorious service. A graduate of the Army Ranger School, he also commanded a stateside detachment, where he was responsible for logistical planning and support for a deployed 900-person infantry battalion, as well as for training 200+ soldiers in battlefield survival skills. He holds a BS in Engineering Physics from the United States Military Academy at West Point, where he was ranked in the top 3% of cadets in terms of academic standing and was awarded the Lieutenant General Leslie R. Groves Memorial Award for the highest overall achievement in Nuclear Physics. Mr. Burgess also holds an MBA from the Harvard Business School.



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Investment Team

Leticia Lazaridis Goldberg, DDS Investment Management Dr. Goldberg is responsible for both leading the growth of EARNEST Partners in Brazil as well as conducting equity research. She holds a Masters degree from the Universidade Federal do Rio de Janeiro as well as an MBA from the Wharton School of Business. Dr. Goldberg began her career in private practice after graduating with honors from the Dental School at Universidade do Estado do Rio de Janeiro (UERJ), where she also lectured. Subsequently, she worked at Amil Assistência Médica, the largest Brazilian Managed Care Organization, leading strategic planning for dental insurance plans, repositioning products and redesigning the company’s information system. Later, she joined Sul America Seguros, Brazil’s largest multi-line insurance company, as Senior Consultant for the Strategic Planning Department. There she was responsible for analyzing and providing recommendations on corporate restructuring and project investments. Prior to joining EARNEST Partners, she served as an independent consultant for healthcare and finance organizations.

Roni Schocken Investment Management Mr. Schocken is responsible for research and portfolio management at EARNEST Partners. He is an honors graduate of Tel Aviv University earning degrees in Economics and Law (Juris Doctor equivalent). Mr. Schocken also holds an MBA from the Harvard Business School. He began his career in the Israel Defense Force serving as a lead economic correspondent for a radio station; before being promoted to manage the station’s newsroom, leading a staff of reporters, producers, and technicians. Similarly, his journalism experience involves covering the banking sector for one of Israel’s largest newspapers. Mr. Schocken has also worked as a lobbyist and strategic advisor. He represented clients across various industries including media, financials, and telecommunication with regular interaction with company CEOs and senior management. Subsequently he served as a law clerk for an Israeli Supreme Court Justice where he researched and analyzed legal issues to help draft opinions.



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Investment Team

Pavel Sokolov, Ph.D., CFA Investment Management Dr. Sokolov is responsible for research and portfolio management at EARNEST Partners. Prior to joining EARNEST Partners, he specialized in interest rate risk modeling, credit research, liability modeling, and evaluation of new bond issues for various financial institutions. His experience also includes an analyst role where he evaluated balance sheet strength, cash flow generation, return on invested capital and other metrics on corporate entities for trading strategies at a broker-dealer firm. Most recently, he was a managing director, risk officer and portfolio manager at a global tactical asset allocation firm. He is a former winner of the Russian regional Olympiads in Mathematics, Physics and Chemistry. Mr. Sokolov completed his undergraduate studies in Russia, holds an MBA in Finance from the UCLA Anderson School of Business, and a Doctorate of Engineering from Cleveland State University. He is a CFA charter holder and a member of the Atlanta Society of Financial Analysts.

Nikita Smeshko, CFA Investment Management Mr. Smeshko is responsible for research and portfolio management at EARNEST Partners. He is a magna cum laude graduate of the University of Georgia with a BBA in Finance and Economics. While at the University of Georgia, he researched equities momentum portfolio construction and built a mathematical model for the denial of economically unfeasible medical procedures. Mr. Smeshko has interned with CNN and AGCO Corporation in web development and programming roles. He was born in Kherson, Ukraine. Yugeng Sun Investment Management Mr. Sun is responsible for research and portfolio management at EARNEST Partners. He is an honor graduate of the University of Michigan with a Bachelor of Science in Financial Mathematics and Economics. During his tenure at the University of Michigan he worked with two asset management firms with duties including the use of statistical methods such as multi-factor linear regression and Monte Carlo simulations to identify and understand the drivers of mutual fund performance. Mr. Sun is also pursuing a private pilot license.



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Investment Team

Thomas Venezia Investment Management Mr. Venezia is responsible for research and portfolio management at EARNEST Partners. Prior to joining EARNEST Partners he was a professional in energy trading risk management and business valuation advisory. His responsibilities included portfolio risk modeling, option analysis, and the development of hedging strategies for risk management and compliance monitoring. He is a magna cum laude graduate of the University of South Carolina, and will complete his final course work this spring to earn his MBA from Emory University. He is a member of the Global Association of Risk Professionals, and has completed the first of two sections of the Financial Risk Manager examination.

Maggie Zhang Jing Investment Management Ms. Zhang is responsible for both expanding EARNEST Partners’ presence in Greater China as well as conducting research. Prior to joining EARNEST Partners Ms. Zhang was a senior business manager at the Export-Import Bank of China. In addition to conducting industry research and developing financial products for the bank she also performed credit analysis and approved bank financing relating to Mergers & Acquisitions, overseas investments, and project contracting engagements across multiple industries. She also led the review and approval process for strategic cooperation agreements with governmental departments and state-owned enterprises. Her prior experience also includes a role at The Securities Association of China where her duties involved analysis and supervision within the China mutual fund industry. Ms. Zhang holds a Masters in Financial Economics and a Bachelor’s degree in International Finance from the University of International Business and Economics – Beijing.



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Investment Team

Ryan Kelly, CFA Director, Senior Trader Mr. Kelly leads the trading effort for EARNEST Partners. He also manages the firm’s relationships with research brokers and DMA trading platforms. Mr. Kelly is responsible for apprising the investment teams daily of real-time market information and drivers. Prior to taking on trading responsibilities, Mr. Kelly worked in portfolio management, specializing in the analysis of fixed income securities with a particular emphasis on Small Business Administration Loan Pools (SBAs) and other Agency bonds. He holds a BS in Business Administration with a focus in Finance from The University of North Carolina at Chapel Hill, where he was a member of the crew team. He began his career as an analyst with MetLife Securities. He is a member of the CFA Institute and the Atlanta Society of Financial Analysts. Margaret Champagne Wright, CPA Director, Product Management

Ms. Wright is responsible for product management at EARNEST Partners. Prior to joining EARNEST Partners, Ms. Wright worked for Ernst & Young, specializing in real estate and financial service engagements. In addition to her audit engagements, Ms. Wright worked on special projects helping companies implement International Financial Reporting Standards and Sarbanes Oxley regulations. She is a magna cum laude graduate of the University of Georgia with a BA in International Business and a Masters of Science in Accounting from The University of Virginia's McIntire School of Commerce. Ms. Wright is a licensed CPA and a member of the American Institute of Certified Public Accountants (AICPA).

Andrew Farmer Product Management Mr. Farmer is responsible for product management at EARNEST Partners. Additionally, he serves as a Board Director for the firm’s UCITS fund. He holds a Bachelor of Science degree from Lipscomb University where he majored in Financial Markets and minored in Communications. Prior to joining EARNEST Partners, Mr. Farmer helped start an ecommerce apparel company where he directed the day-to-day operations. He also has experience in the small market investment banking sector. Mondrell Moore Product Management Mr. Moore is responsible for product management at EARNEST Partners. He has more than ten years of experience in the financial services area. He began his career in the Global Investor Services group at Brown Brothers Harriman with assignments in Boston, Zurich, and London. He then joined the American Depository Receipts division of The Bank of New York, working with institutional asset managers and international companies across a broad spectrum of industries. Prior to joining EARNEST Partners, he worked as a portfolio manager for SunTrust Robinson Humphrey in its Debt Capital Markets group focusing on asset securitization transactions. He holds a BA in Business Administration and Finance from Clark Atlanta University and an MBA from Cornell University.



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Organization Los Angeles Department of Water & Power Retirement Plan and Retirees Health


Paul Viera CEO, Partner

Portfolio Management

Trey Greer, CFA, CPA Partner

Doug Folk, CFA Partner

Tammy Qiuhong Tang Partner

Chris Hovis, CFA Partner

Jessie Magee, CFA Partner

Sarah Ryan, PhD. Advisor

Chris Fitze, CFA Director

Dinkar Singh, PhD. Director

Roni Schocken Investment Management

Richard Burgess Investment Management

Pavel Sokolov, Ph.D. CFA Investment Management

Leticia L. Goldberg, DDS Investment Management

Nikita Smeshko, CFA Investment Management

Yugeng Sun Investment Management

Thomas Venezia Investment Management

Mike Connor Advisor

Advisors

Product Management

Margaret Wright, CPA Product Management,

Director

Sara Al-Moukadem Product Management

Julia Bernier Product Management

Andrew Farmer Product Management

Patmon Malcom, CFA Partner

Anthony Ciliberto, CPA Director

Portfolio Operations

Trading & Execution

Ryan Kelly, CFA Senior Trader, Director

Hollis Gilliam Trader

Nal Umrao Trader

Anuradha Goel Associate, Portfolio

Operations

Reconciliation & Settlements

Zakiyyah Amiss Manager, Portfolio

Accounting

Marcia Abbott Portfolio Accounting

Andrew Shields Trader

Brittani Goodwin Associate, Portfolio

Operations

Administration

Cord Campbell Deputy Chief Operating

Officer, Director

Becky Do Director, Chief of Staff

Patrina Thomas Manager, Logistics

Damaris Hodge Manager, Compliance

Kevin McKenzie Manager, IT

Daniel Montgolf Manager, Operations

John Whitmore II, CPA Chief Operating Officer, Partner

Jay Wilson, CFA, CPA, CSCP, CIPM Chief Compliance Officer and Director

Maggie Jing Zhang Investment Management

Aaron Kirchoff Product Management

Mondrell Moore Product Management

Nadia Barnes Trade Settlements

Zubin J. Ali Accounting

John Palmer Product Management

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Representative Client List

Royal Bank of Canada

General Mills

Government of Guam Retirement Fund

New York Common Retirement Fund

Chicago Public School Teachers

Valero Energy

United Technologies Corporation

Pacific Gas & Electric

Kyocera

The California Endowment

New York Metro Transportation Authority

Exelon Corporation

Miami Firefighters

Government of Bermuda

Illinois Municipal Retirement Fund

MetLife

Boehringer Ingelheim

BMO Nesbitt Burns

Morgan Stanley

Maryland State Retirement System



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Key Contacts

EARNEST Partners 1180 Peachtree Street, Suite 2300

Atlanta, GA 30309 404-815-8772

Paul E. Viera

CEO and Partner [email protected]

Trey Greer, CFA, CPA

Partner [email protected]

Jessie Magee, CFA

Partner [email protected]

Margaret Champagne

Director [email protected]

Anthony C. Ciliberto, CPA

Director [email protected]



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mailto:[email protected]





Investment Philosophy and Objective

EARNEST Partners is a fundamental, bottom-up stock selector. The Firm’s investment objective is to outperform the benchmark while controlling volatility and risk. EARNEST Partners implements this philosophy using a screen developed in-house called Return Pattern Recognition®, thorough fundamental analysis, and risk management that minimizes the likelihood of meaningfully underperforming the benchmark.



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Investment Process

EARNEST Partners is a fundamental, bottom-up investment manager. We understand that each company is unique and consider these differences in selecting companies that make good investments. The first step in our investment process is to screen the relevant universe to identify companies likely to outperform based on their financial characteristics and the current environment. The screening approach is called Return Pattern Recognition®, and it allows us to review thousands of companies and focus our attention on those we believe to have the best prospects. Return Pattern Recognition® ranks each company according to specific financial and market characteristics. Then it identifies the most attractive set of characteristics for each company, and finally, it identifies companies currently exhibiting the set of characteristics that has led to outperformance. The second step in our investment process is to construct a portfolio that includes those stocks we expect to have the best performance and that effectively manages risk. Our clients are primarily concerned about the risk of meaningfully underperforming the assigned benchmark. Hence, we focus our attention on reducing this possibility. We use a statistical approach called downside deviation to measure the likelihood of significant underperformance. Using this information, we select investments that blend together to manage downside risk. We reconstruct the portfolio until downside deviation is within acceptable limits. In the last step of the process, the stocks we’ve identified as potential investments undergo a more rigorous fundamental review. We develop an investment thesis for each company; this thesis must be tested. The test generally includes conversations with the company’s management team and industry specialists, review of the company’s financial reports, analysis of industry and company-specific studies, and independent field research. We seek companies in attractive industries with developed strategies, talented and honest management teams, sufficient funding, and strong financial results. The experience and different perspectives of our investment team are an advantage in determining which companies are best positioned to meet or exceed expectations. We eliminate from consideration any company that does not pass our exhaustive fundamental analysis. The result is a client portfolio of stocks with high expected excess returns and limited risk of meaningful underperformance.



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Research: Scrutinize the Companies

Risk Control: Constrain Downside Risk

Investment Process

UNIVERSE STOCKS Begin with the Small Cap Index

2000

150

60

Initial Screen: Return Pattern Recognition®



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Yes No

• No prohibited securities held

• No more than 5% of a company’s outstanding shares held

• Cash position less than 5% of total portfolio value*

• No more than 15% of a company’s outstanding shares held across the firm

• Benchmark: Exceed Russell 2000® Value Index over a full market cycle

Guidelines and Investment Policy Audit

*Threshold may be temporarily exceeded due to market conditions.

EARNEST Partners believes that the attached information, along with other submissions, represents all the required reporting information. Please notify us immediately if any required information is missing.



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Equity Market Overview

Global equity markets began the year largely positive, but markets started to reverse mid-year as investors grew concerned over stagnating global growth. The U.S. market remained resilient, finishing the quarter and year at record high levels and pulling away from broader international markets. The U.S. small cap market, represented by the Russell 2000® Index, was up 10% for the quarter and 5% for the year. The U.S. large cap Russell 1000® Index finished the quarter up 5%; posting its 10th consecutive positive quarter and completing the year up 13%. The international equity market, as represented by the MSCI ACWI ex-U.S. Index, finished the quarter and year down 3%. Emerging markets fell 4% for the quarter and finished the year down 2%. Despite strong optimism heading into 2014, the U.S. economy fell 2% at the onset of the year; the first decline since early 2011. The decline was largely related to an unusually harsh and prolonged winter, with growth rebounding to the 4-5% range in subsequent quarters. Consumer spending represents about two-thirds of U.S. economic output and has contributed to recent growth. Consumer spending increased throughout the year with year-over-year retail sales up over 5% in November. Declining oil prices starting mid-year translated into lower prices at the pump, creating an additional stimulus for increased discretionary spending. Consumer sentiment also rose, reaching its highest level in eight years during the 4th quarter. Since July, oil prices fell from over $100 to below $60 a barrel to the lowest level in 5 years. Several factors contributed to the decline in prices including a surge in supply coming from the U.S., weakening demand from various parts of the world, and an unwillingness of OPEC nations to reduce production to support prices. Oil prices being at historically high levels over the past few years created an incentive for producers, particularly in the U.S., to find and exploit new supplies and caused increased production in the U.S. mid-continent region. U.S. oil production has doubled from under 4mm barrels a day in 2008 to nearly 9mm barrels a day in 2014. For now, OPEC member nations have chosen to maintain production levels and focus on supplying other import driven economies like China. As expected, the U.S. Federal Reserve decided to end its current stimulus program during the quarter, as the U.S. economy has shown sufficient strength and the unemployment rate has continued to decline. Despite expectations, interest rates continued to slide with the 10-year treasury yield falling below 2% during the quarter before rebounding to 2.2%. Although the U.S. economy appears to be on track following the completion of its monetary stimulus, other global markets are increasing their stimulus efforts. Early in the year, Europe showed signs of stabilization and modest, yet positive, growth. That growth remained at relatively low levels throughout the course of the year, with inflation near zero. Interest rates hit record lows with countries like France and Germany below 1% in the most recent quarter and Spain and Italy below 2%. Further, bond purchases and other stimulus measures are being evaluated for early 2015. The Japanese economy contracted in the two most recent quarters as the government implemented the first phase of a sales tax increase to offset the cost of stimulus introduced in 2013. Given the negative impact of the sales tax increase the government decided to delay the second phase and introduce further stimulus. The Bank of Japan unexpectedly announced that it will expand its bond buying program from 60T yen per year to 80T, which is roughly $725B dollars per year. In emerging markets, China cut its benchmark interest rate from 6% to 5.6%, the first cut since 2012. It also is evaluating ways to stimulate growth with GDP growth sliding toward 7%. There has been an increased focus on higher quality growth as the country focuses on longer-term sustainable economic development. During the quarter, Brazilians voted to keep current leadership in place. While removing some market volatility, downward pressure resumed as a stagnant economic environment and weak currency garnered investor attention. GDP growth fell for the first half of the year before flat lining in the 3rd quarter. The Brazilian Real weakened by over 8% versus the U.S. dollar during the quarter and is down over 11% for the year. Brazil’s currency was not the only emerging market currency to decline. The Russian Ruble fell over 40% during the year with its steepest decline occurring in the quarter. International sanctions and a declining oil price contributed to the currency declines. The Central Bank of Russia responded by increasing interest rates from 8% to 17% during the quarter to limit ruble depreciation and inflation risks.



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EARNEST Partners Small Cap Value Portfolio Review

The U.S. equity market ended the year with another quarter of positive returns with the Russell 2000 Value® Index rising almost 10% for the quarter, pushing the index into positive territory for the year, up over 4%. The EARNEST Partners Small Cap Value portfolio posted strong returns for the quarter, and outperformed the benchmark for both the quarter and full year 2014. As a fundamental bottom-up investor, performance was driven by positive stock selection across a myriad of sectors, in particular Health Care, Materials and Information Technology. Health Care holding Centene is a Medicaid Health Maintenance Organization (HMO) serving more than 3.5 million Medicaid beneficiaries in over 20 states across the country. The Medicaid program is large and historically the market has been very segmented, but the industry is going through consolidation which will benefit well-capitalized companies like Centene. The company is also taking advantage of secular trends as states are outsourcing Medicaid services more and more in order to control increasing healthcare costs. Centene has invested heavily in IT-based predictive modeling systems enabling it to quickly identify emerging medical trends, giving it an edge in terms of managing costs and competing for new contracts. During the quarter, Centene reported earnings well ahead of consensus expectations with premium revenues growing 40% year-over-year. Share rose 26%. Managed care for dual-eligible candidates (i.e. covered by both Medicare and Medicaid) is still in its infancy, but represents an additional opportunity for Centene in the future. Information Technology holding Global Payments is a leading provider of electronic payments transaction processing services for credit and debit cards, gift cards, electronic check services, verification and recovery services, and terminal management. The company continues to profit from strong secular opportunities as purchases shift from cash to debit/credit, both domestically and internationally. Also, concerns over foreign exchange rates were quelled as new regulations in Europe set a favorable cap on the fees banks are able to charge merchants for card-based transactions. During the most recent quarter, Global Payments beat consensus earnings expectations and raised guidance, and shares gained 15% as a result. The company continues to implement its business plan set by the new CEO through both organic growth and acquisitions. Additionally, Global Payments is a participant in OptBlue, an American Express program which allows merchants more flexibility and discretion in setting prices. A venture with American Express benefits Global Payments by expanding its acceptance base and by taking advantage of AMEX’s valuable tools, services and marketing. Information Technology holding Itron is an industry-leading supplier of electronic meters used primarily by water, electric and gas utility companies. The technology and software applications provide utilities the capability to automate meter readings which enable real time collection and analysis of resource usage. By offering products that both reduce labor costs and provide for much more efficient planning, Itron continues to penetrate the industry, and siphon market share from bigger participants. The water and gas segments of the business are growing although the electricity segment continues to be a headwind for the company. Shares were under pressure over the last year but were in line with the broader market for the quarter, up 8%. The company has posted better than expected revenue growth, attributed in part to non-U.S. markets beginning to convert their technology with Itron software. This shift in geographic exposures represents Itron’s effort to exit the lower margin standard meter business and ramp up the deployment of smart meter technology projects around the world.



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Equity Market Overview

Energy

Materials

Industrials

Consumer Discretionary

Consumer Staples

Health Care

Financials

Information Technology

Telecommunication Services

Utilities

-29.05

4.54

4.69

9.21

11.49

11.63

14.11

15.74

17.57

18.00

Russell 2000® Value Index 4th Quarter 2014 Returns

Percent

-37.64

-5.09

-1.20

-1.52

6.08

9.83

6.59

8.16

22.04

16.98

Russell 2000® Value Index YTD Returns

Percent



Equity Market Performance By Sector

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During the period January 1, 2014 through December 31, 2014, EARNEST Partners verifies that the WPERP has been in compliance with the Investment Management Agreement and Guidelines including the Investment and Legal/Compliance Guidelines, with the exception that cash and dividend yield may temporarily exceed the respective 5% or greater than 2/3rd threshold at times during this period, due to market conditions. Signature: __________________ Date: 01/31/2015 Trey Greer Title: Investment Management

Guidelines and Investment Policy Audit



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Performance Measurement

Performance

Total Portfolio -

Gross

Total Portfolio -

Net Equities

Russell 2000® Value

Index

Excess Return (Basis Points)

4th Quarter 10.56% 10.40% 10.93% 9.40% 100

1 Year 11.11 10.48 11.48 4.22 626

3 Years* 20.51 19.52 20.96 18.29 123

5 Years* 16.65 15.98 17.11 14.26 172

Since Inception Annualized* 8.74 8.09 8.82 7.08 101

* Annualized. Performance Inception is 11/30/2004. Net of fee performance results presented herein may be based on estimated information for the most recent quarter(s).

Los Angeles Department of Water & Power Retirement Plan

December 31, 2014

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8.7

16.7 20.2

11.1 10.6 8.1

16.0 19.5

10.5 10.4 8.8

17.1 21.0

11.5 10.9 7.1

14.3 18.3

4.2 9.4

Portfolio (Gross)

Portfolio (Equity Only) Period Ending December 31, 2014 Portfolio (Net)

Since inception (11/04) 1 Year 4th Quarter 3 Year

Russell 2000® Value Index

Performance Measurement Los Angeles Department of Water & Power Retirement Plan

December 31, 2014

5 Year

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Performance Measurement

Performance

Total Portfolio -

Gross

Total Portfolio -

Net Equities

Russell 2000® Value

Index

Excess Return (Basis Points)

4th Quarter 10.55% 10.32% 10.91% 9.40% 92

1 Year 11.12 10.27 11.48 4.22 605

3 Years* 19.83 19.01 20.62 18.29 72

5 Years* 16.26 15.52 16.75 14.26 126

Since Inception Annualized* 16.80 15.99 17.30 14.08 191

* Annualized. Performance Inception is 09/15/2009. Net of fee performance results presented herein may be based on estimated information for the most recent quarter(s).

The Retiree Health Benefits Fund December 31, 2014

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16.8 16.3 19.8

11.1 10.6 16.0 15.5

19.0

10.3 10.3

17.3 16.8 20.6

11.5 10.9 14.1 14.3

18.3

4.2 9.4

Portfolio (Gross)

Portfolio (Equity Only) Period Ending December 31, 2014 Portfolio (Net)

Since inception (09/09) 1 Year 4th Quarter 3 Year


Performance Measurement The Retiree Health Benefits Fund December 31, 2014

5 Year

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Asset Growth Los Angeles Department of Water & Power Retirement Plan and Retirees Health

Benefits Fund December 31, 2014

Portfolio Value (Employees' Retirement, Disability & Death Benefit Plan)Initial Value as of 30-Nov-04 $94,822,928Contributions $39,824Withdrawals -$40,743,509Change in Market Value $98,009,232Market Value as of 31-Dec-14 $152,128,476

Portfolio Value (Retiree Health Benefits Fund)Beginning value as of 15-Sep-09 $11,204,725Contributions $1,133,179Withdrawals -$1,474,292Change in market value $15,046,957Ending value as of 31-Dec-14 $25,910,569

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10.7

61.4

27.9 30.0

66.7

3.3

Portfolio (Gross)

Period Ending December 31, 2014

$0 - $1 Billion $1 - $4 Billion $4 - $16 Billion


Market Cap Weightings Los Angeles Department of Water & Power Retirement Plan

December 31, 2014

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10.7

61.5

27.9 30.0

66.7

3.3

Portfolio (Gross)

Period Ending December 31, 2014

$0 - $1 Billion $1 - $4 Billion $4 - $16 Billion


Market Cap Weightings The Retiree Health Benefits Fund December 31, 2014

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2.58

0.67

6.42

10.69

6.71

4.57

4.92

10.33

13.30

39.69

0.00

2.73

3.73

4.59

5.04

5.26

9.69

18.50

23.67

26.79

Sector Attribution


Health Care

Financials

Industrials

Utilities

Materials


Energy

Consumer Staples


Portfolio – 2014 Percent

Russell 2000® Value – 2014 Percent

Portfolio Breakdown By Sector


December 31, 2014

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Sector Attribution


Health Care

Financials

Industrials

Utilities

Materials


Energy

Consumer Staples


0.00

2.74

3.72

4.59

5.04

5.26

9.68

18.52

23.64

26.79

Portfolio – 2014

Percent

2.58

0.67

6.42

10.69

6.71

4.57

4.92

10.33

13.30

39.69

Russell 2000® Value - 2014

Percent

Portfolio Breakdown By Sector


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Contributors/Detractors Los Angeles Department of Water & Power Retirement Plan

December 31, 2014

Top 10 Contributors Top 10 Detractors

Protective Life Corporation

Centene Corporation

Sapient Corporation

Snap-on Incorporated

WGL Holdings, Inc.

AMCOL International Corporation

Monolithic Power Systems, Inc.

SBA Communications Corporation

Valspar Corporation

Cantel Medical Corp.

Swift Energy Company

Meritage Homes Corporation

Franklin Electric Co., Inc.

EnerSys

Coherent, Inc.

Newpark Resources, Inc.

Bristow Group Inc.

Hexcel Corporation

TAL International Group, Inc.

International Speedway Corporation

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Contributors/Detractors The Retiree Health Benefits Fund December 31, 2014

Top 10 Contributors Top 10 Detractors


Centene Corporation

Sapient Corporation

Snap-on Incorporated

WGL Holdings, Inc.

AMCOL International Corporation

Monolithic Power Systems, Inc.

SBA Communications Corporation

Valspar Corporation

Cantel Medical Corp.

Swift Energy Company

Meritage Homes Corporation

Franklin Electric Co., Inc.

EnerSys

Coherent, Inc.

Newpark Resources, Inc.

Bristow Group Inc.

Hexcel Corporation

TAL International Group, Inc.

International Speedway Corporation

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Sector Decisions



EARNEST Partners does not target sector or industry weights. Instead, the weightings are an outgrowth of our bottom-up, fundamental stock selection process. Our process is designed to identify the individual securities with the most attractive expected returns. Relative overweights and underweights are an outgrowth of where we are finding those individual investment opportunities. As of December 31, 2014, the portfolios had an overweight to the Industrials, Information Technology, Telecommunications, Materials and Health Care sectors, while the portfolios continue to be underweight Financials. The portfolios currently have a relative overweight to areas that are generally considered to be more “economically sensitive” such as Industrials, as many companies within these sectors are trading at relatively more attractive valuations, while being able to grow earnings at a higher rate over time. As investors have sought yield in the equity markets given the low interest rate environment, high dividend yielding and more “defensive” areas of the market are trading at a premium - despite lower-than-average long term growth prospects. The portfolios’ underweight to Financials is attributed to our investment team having found what we believe are better opportunities in other sectors. The portfolios’ financial holdings are primarily services companies including brokerages, asset managers, and specialty insurance companies. The portfolios remain underweight in REITs and commercial banks.

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Sample Holdings

Centene Corporation

Itron, Inc.

Global Payments, Inc. • Global Payments is a leading provider of electronic payments transaction processing services for credit and debit cards, gift

cards, electronic check services, verification and recovery services, and terminal management. • The company continues to profit from strong secular opportunities as purchases shift from cash to debit/credit, both

domestically and internationally. Also, concerns over foreign exchange rates were quelled as new regulations in Europe set a favorable cap on the fees banks are able to charge merchants for card-based transactions. During the most recent quarter, Global Payments beat consensus earnings expectations and raised guidance, and shares gained 15% as a result.

• The company continues to implement its business plan set by the new CEO through both organic growth and acquisitions. Additionally, Global Payments is a participant in OptBlue, an American Express program which allows merchants more flexibility and discretion in setting prices. A venture with American Express benefits Global Payments by expanding its acceptance base and by taking advantage of AMEX’s valuable tools, services and marketing.

• Centene is a Medicaid Health Maintenance Organization (HMO) serving more than 3.5 million Medicaid beneficiaries in over 20 states across the country. The Medicaid program is large and historically the market has been very segmented, but the industry is going through consolidation which will benefit well-capitalized companies like Centene. The company is also taking advantage of secular trends as states are outsourcing Medicaid services more and more in order to control increasing healthcare costs.

• Centene has invested heavily in IT-based predictive modeling systems enabling it to quickly identify emerging medical trends, giving it an edge in terms of managing costs and competing for new contracts. During the quarter, Centene reported earnings well ahead of consensus expectations with premium revenues growing 40% year-over-year. Share rose 26%.

• Managed care for dual-eligible candidates (i.e. covered by both Medicare and Medicaid) is still in its infancy, but represents an additional opportunity for Centene in the future.

• Itron is an industry-leading supplier of electronic meters used primarily by water, electric and gas utility companies. The technology and software applications provide utilities the capability to automate meter readings which enable real time collection and analysis of resource usage.

• By offering products that both reduce labor costs and provide for much more efficient planning, Itron continues to penetrate the industry, and siphon market share from bigger participants. The water and gas segments of the business are growing although the electricity segment continues to be a headwind for the company. Shares were under pressure over the last year but were in line with the broader market for the quarter, up 8%.

• The company has posted better than expected revenue growth, attributed in part to non-U.S. markets beginning to convert their technology with Itron software. This shift in geographic exposures represents Itron’s effort to exit the lower margin standard meter business and ramp up the deployment of smart meter technology projects around the world.



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Top 10 Holdings Los Angeles Department of Water & Power Retirement Plan

December 31, 2014

Company Name Portfolio Weight (%)

Hexcel Corp.

Snap-On Inc.

Raymond James Financial, Inc.

Valspar Corp.

SBA Communications Corp.


Bristow Group Inc.

EnerSys Inc.

Mednax Inc.

Reinsurance Group

3.01

2.97

2.76

2.71

2.68

2.49

2.43

2.41

2.37

2.29

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Top 10 Holdings

Company Name Portfolio Weight (%)


Hexcel Corp.

Snap-On Inc.

Raymond James Financial, Inc.

Valspar Corp.

SBA Communications Corp.


Bristow Group Inc.

EnerSys Inc.

Mednax Inc.

Reinsurance Group

3.01

2.97

2.76

2.71

2.69

2.49

2.42

2.40

2.37

2.29

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Historical Asset Growth

Asset Growth

Investment Change

Period Ending Ending Portfolio

Value Withdrawals Contributions Period Since Inception

11/17/04 $94,822,928

2004 98,883,401 $0 $0 $4,060,474 $4,060,474 2005 109,824,791 0 0 10,941,390 15,001,863 2006 121,332,152 0 0 11,507,361 26,509,225 2007 121,191,717 0 0 -140,435 26,368,790 2008 81,695,395 259 13,224 -39,509,287 -13,140,497 2009 93,777,422 8,106,946 0 20,188,973 7,048,476 2010 108,106,223 4,874,242 0 19,203,043 26,251,518 2011 110,885,235 0 0 2,779,012 29,030,531 2012 112,520,000 14,000,000 26,363 15,608,403 44,638,933 2013 136,919,225 13,761,807 0 38,161,032 82,799,965 03/31/14 139,330,723 0 0 2,411,498 85,211,463 06/30/14 144,035,975 0 237 4,705,015 89,916,478 09/30/14 137,599,347 0 0 -6,436,629 83,479,849


December 31, 2014

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Asset Growth

Investment Change


Value Withdrawals Contributions Period Since Inception 12/31/14 152,128,476 $255 $0 $14,529,384 $98,009,233


December 31, 2014

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Asset Growth

Investment Change


Value Withdrawals Contributions Period Since Inception

09/15/09 $11,204,725

2009 12,069,455 $0 $0 $864,731 $864,731 2010 15,517,723 0 803,439 2,644,829 3,509,559 2011 15,814,848 0 0 297,125 3,806,684 2012 18,447,344 0 329,740 2,302,756 6,109,441 2013 23,318,642 1,474,249 0 6,345,547 12,454,988 03/31/14 23,728,076 0 0 409,434 12,864,421 06/30/14 24,532,372 0 0 804,296 13,668,718 09/30/14 23,437,514 0 0 -1,094,858 12,573,860 12/31/14 25,910,569 43 0 2,473,098 15,046,957


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Sector Weightings

3.4 0.0

3.8

26.7

11.9

22.2 19.2

6.0 2.7

4.2

11.7

2.8 4.1

40.9

5.4

13.0 10.0

4.4

0.8

6.9

Percentage Held

Portfolio Russell 2000® Value Index


Consumer Staples

Energy Financials Health Care Industrials Information Technology

Materials Telecom Utilities


December 31, 2014

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Sector Weightings

3.4 0.0

3.8

26.7

11.9

22.2 19.2

6.0 2.8

4.2

11.7

2.8 4.1

40.9

5.4

13.0 10.0

4.4

0.8

6.9

Percentage Held

Portfolio Russell 2000® Value Index


Consumer Staples

Energy Financials Health Care Industrials Information Technology

Materials Telecom Utilities


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Characteristics Los Angeles Department of Water & Power Retirement Plan

December 31, 2014

SCV Composite*

Total Volatility 16.51

Tracking Error 4.39

Sharpe Ratio 0.99

CAPM Alpha 3.15

Portfolio Russell 2000

Value Market Cap 1,998 971

Dividend Yield 1.29 2.02

Price/Earnings 18.66 18.08

P/E using FY1 Est 17.48 18.46

Price/Cash Flow 9.46 9.37

Price/Book 1.97 1.49

Price/Sales 1.30 1.05

Historical 3 Year EPS Growth 14.03 11.98

Estimated 3-5 Year EPS Growth 12.17 11.27

ROE 9.95 5.50

Beta 0.97 1.00

R Squared 0.87 1.00

Turnover (Trailing 1 Year) 8.95% N/A

* Characteristics are based on 5 Year Numbers.

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Characteristics

SCV Composite*

Total Volatility 16.51

Tracking Error 4.39

Sharpe Ratio 0.99

CAPM Alpha 3.15

Portfolio Russell 2000

Value Market Cap 2,000 971

Dividend Yield 1.29 2.02

Price/Earnings 18.67 18.08

P/E using FY1 Est 17.49 18.46

Price/Cash Flow 9.47 9.37

Price/Book 1.97 1.49

Price/Sales 1.30 1.05

Historical 3 Year EPS Growth 14.01 11.98

Estimated 3-5 Year EPS Growth 12.17 11.27

ROE 9.94 5.50

Beta 0.97 1.00

R Squared 0.87 1.00

Turnover (Trailing 1 Year) 8.95% N/A

* Characteristics are based on 5 Year Numbers.


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Equity Portfolio Characteristics

0.97 1.00 0.87

1.00

Risk Profile

Portfolio Russell 2000® Value Index Beta

Volatility

R Squared

Diversification

Probability of Exceeding Risk Target

Benchmark Risk

86%


December 31, 2014

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Equity Portfolio Characteristics

0.97 1.00 0.87

1.00

Risk Profile

Portfolio Russell 2000® Value Index Beta

Volatility

R Squared

Diversification

Probability of Exceeding Risk Target

Benchmark Risk

86%


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Los Angeles Department of Water &Power Retirement Plan

December 31, 2014

Statement of AssetsQuantity Security Price Market Value Pct. Asset Annual

IncomeYield

Common Stock


11,841 INTL SPEEDWAY-A 31.65 374,767.65 0.25 5,883.85 1.5749,213 LIFE TIME FITNES 56.62 2,786,440.06 1.83 0.00 0.0050,447 MERITAGE HOMES C 35.99 1,815,587.53 1.19 0.00 0.00

4,976,795.24 3.27 5,883.85 0.12Energy

56,081 BRISTOW GROUP IN 65.79 3,689,568.99 2.43 84,860.09 2.30163,564 NEWPARK RESOURCE 9.54 1,560,400.56 1.03 0.00 0.00

97,726 SWIFT ENERGY CO 4.05 395,790.30 0.26 0.00 0.005,645,759.85 3.71 84,860.09 1.50

Financials

100,985 AMER EQUITY INVT 29.19 2,947,752.15 1.94 18,865.61 0.64104,790 ASTORIA FINL 13.36 1,399,994.40 0.92 17,639.93 1.26

47,265 CASH AMER INTL 22.62 1,069,134.30 0.70 7,163.20 0.6743,247 ENOVA INTERNATIO 22.26 962,678.22 0.63 0.00 0.0049,802 EATON VANCE CORP 40.93 2,038,395.86 1.34 47,902.30 2.3535,926 FIRST INTER/MT 27.82 999,461.32 0.66 24,186.96 2.4272,844 HORACE MANN EDUC 33.18 2,416,963.92 1.59 82,418.47 3.4154,343 PROTECTIVE LIFE 69.65 3,784,989.95 2.49 47,690.87 1.2639,811 REINSURANCE GROU 87.62 3,488,239.82 2.29 50,579.48 1.4573,405 RAYMOND JAMES 57.29 4,205,372.45 2.76 49,623.39 1.1853,617 STIFEL FINANCIAL 51.02 2,735,539.34 1.80 0.00 0.0040,531 STATE AUTO FINL 22.22 900,598.82 0.59 17,021.32 1.8995,077 TRUSTMARK CORP 24.54 2,333,189.58 1.53 93,094.26 3.9992,143 UNITED BANKSHS 37.45 3,450,755.35 2.27 126,642.72 3.6763,648 UNITED FIRE GROU 29.73 1,892,255.04 1.24 50,901.66 2.69

34,625,320.52 22.76 633,730.19 1.83Health Care

78,722 CANTEL MEDICAL 43.26 3,405,513.72 2.24 4,086.62 0.1228,490 CENTENE CORP 103.85 2,958,686.50 1.94 0.00 0.00

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IncomeYield

28,214 COVANCE INC 103.84 2,929,741.76 1.93 0.00 0.0081,727 HEALTHWAYS INC 19.88 1,624,732.76 1.07 0.00 0.0054,584 MEDNAX INC 66.11 3,608,548.24 2.37 0.00 0.0057,480 MOLINA HEALTHCARE INC. 53.53 3,076,904.40 2.02 0.00 0.00

17,604,127.38 11.57 4,086.62 0.02Industrials

47,983 ALTRA INDUSTRIAL 28.39 1,362,237.37 0.90 22,340.69 1.6439,692 ALBANY INTERNATIONAL

CORP. CL A37.99 1,507,899.08 0.99 25,785.07 1.71

65,125 CAI INTERNATIONAL INC. 23.20 1,510,900.00 0.99 0.00 0.0059,279 ENERSYS 61.72 3,658,699.88 2.41 37,684.61 1.0374,242 FRANKLIN ELEC CO 37.53 2,786,302.26 1.83 26,748.50 0.9658,337 GATX CORP 57.54 3,356,710.98 2.21 80,225.39 2.39

110,252 HEXCEL CORP 41.49 4,574,355.48 3.01 0.00 0.0037,666 MOOG INC-CLASS A 74.03 2,788,413.98 1.83 0.00 0.0033,085 SNAP-ON INC 136.74 4,524,042.90 2.97 59,717.37 1.3245,664 TAL INTERNATIONAL GROUP

INC.43.57 1,989,580.48 1.31 140,066.47 7.04

27,427 TELEDYNE TECH 102.74 2,817,849.98 1.85 0.00 0.0049,042 TIMKEN CO 42.68 2,093,112.56 1.38 50,653.32 2.42

32,970,104.95 21.67 443,221.43 1.34Information Technology

55,724 CABOT MICROELEC 47.32 2,636,859.68 1.73 0.00 0.0094,071 CHECKPOINT SYS 13.73 1,291,594.83 0.85 0.00 0.0035,119 COHERENT INC 60.72 2,132,425.68 1.40 0.00 0.00

200,463 ENTEGRIS INC 13.21 2,648,116.23 1.74 0.00 0.0066,500 EPIQ SYSTEMS INC. 17.08 1,135,820.00 0.75 26,010.28 2.29

122,989 FAIRCHILD SEMICO 16.88 2,076,054.32 1.36 0.00 0.0080,995 FLIR SYSTEMS 32.31 2,616,948.45 1.72 33,235.25 1.2736,995 GLOBAL PAYMENTS 80.73 2,986,606.35 1.96 2,986.61 0.1029,992 ITRON INC 42.29 1,268,361.68 0.83 0.00 0.0028,182 LITTELFUSE INC 96.67 2,724,353.94 1.79 26,971.10 0.9961,620 MONOLITHIC POWER 49.74 3,064,978.80 2.01 19,922.36 0.6566,038 SANMINA CORP 23.53 1,553,874.14 1.02 0.00 0.0091,651 SAPIENT CORP 24.88 2,280,276.88 1.50 0.00 0.00

28,416,270.98 18.68 109,125.60 0.38

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IncomeYield

Materials

32,661 CABOT CORP 43.86 1,432,511.46 0.94 28,077.22 1.9638,760 SCOTTS MIRACLE-A 62.32 2,415,523.20 1.59 149,520.89 6.1924,521 TIMKENSTEEL 37.03 908,012.63 0.60 14,688.01 1.6247,753 VALSPAR CORP 86.48 4,129,679.44 2.71 50,795.06 1.23

8,885,726.73 5.84 243,081.18 2.74Telecommunication Services

36,827 SBA COMM CORP-A 110.76 4,078,958.52 2.68 0.00 0.004,078,958.52 2.68 0.00 0.00

Utilities

46,203 SOUTH JERSEY IND 58.93 2,722,742.79 1.79 88,761.41 3.2663,117 WGL HLDGS INC 54.62 3,447,450.54 2.27 111,697.40 3.24

6,170,193.33 4.06 200,458.81 3.25143,373,257.50 94.24 1,724,447.76 1.20

Real Estate Investment Trust

Financials

177,441 FIRST POTOMAC RE 12.36 2,193,170.76 1.44 104,614.25 4.77204,340 MEDICAL PROPERTI 13.78 2,815,805.20 1.85 165,850.93 5.89

5,008,975.96 3.29 270,465.17 5.405,008,975.96 3.29 270,465.17 5.40

Cash and Equivalents

3,639,281 U.S. DOLLARS 1.00 3,639,280.88 2.39 0.00106,962 USD - DIVIDENDSRECEIVABLE 1.00 106,961.74 0.07 0.00

3,746,242.62 2.46 0.00 0.003,746,242.62 2.46 0.00 0.00

Total Portfolio 152,128,476.08 100.00 1,994,912.93 1.31

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IncomeYield

Common Stock


2,112 INTL SPEEDWAY-A 31.65 66,844.80 0.26 1,049.46 1.578,381 LIFE TIME FITNES 56.62 474,532.22 1.83 0.00 0.008,629 MERITAGE HOMES C 35.99 310,557.71 1.20 0.00 0.00

851,934.73 3.29 1,049.46 0.12Energy

9,550 BRISTOW GROUP IN 65.79 628,294.50 2.42 14,450.77 2.3027,765 NEWPARK RESOURCE 9.54 264,878.10 1.02 0.00 0.0016,654 SWIFT ENERGY CO 4.05 67,448.70 0.26 0.00 0.00

960,621.30 3.71 14,450.77 1.50Financials

17,209 AMER EQUITY INVT 29.19 502,330.71 1.94 3,214.92 0.6417,848 ASTORIA FINL 13.36 238,449.28 0.92 3,004.46 1.26

8,116 CASH AMER INTL 22.62 183,583.92 0.71 1,230.01 0.677,426 ENOVA INTERNATIO 22.26 165,302.76 0.64 0.00 0.008,482 EATON VANCE CORP 40.93 347,168.26 1.34 8,158.45 2.356,146 FIRST INTER/MT 27.82 170,981.72 0.66 4,137.76 2.42

12,406 HORACE MANN EDUC 33.18 411,631.08 1.59 14,036.62 3.419,256 PROTECTIVE LIFE 69.65 644,680.40 2.49 8,122.97 1.266,780 REINSURANCE GROU 87.62 594,063.60 2.29 8,613.92 1.45

12,503 RAYMOND JAMES 57.29 716,296.87 2.76 8,452.30 1.189,131 STIFEL FINANCIAL 51.02 465,863.62 1.80 0.00 0.006,904 STATE AUTO FINL 22.22 153,406.88 0.59 2,899.39 1.89

16,194 TRUSTMARK CORP 24.54 397,400.76 1.53 15,856.29 3.9915,694 UNITED BANKSHS 37.45 587,740.30 2.27 21,570.07 3.6710,839 UNITED FIRE GROU 29.73 322,243.47 1.24 8,668.35 2.69

5,901,143.63 22.78 107,965.52 1.83Health Care

13,408 CANTEL MEDICAL 43.26 580,030.08 2.24 696.04 0.124,852 CENTENE CORP 103.85 503,880.20 1.94 0.00 0.00

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IncomeYield

4,805 COVANCE INC 103.84 498,951.20 1.93 0.00 0.0013,813 HEALTHWAYS INC 19.88 274,602.44 1.06 0.00 0.00

9,296 MEDNAX INC 66.11 614,558.56 2.37 0.00 0.009,790 MOLINA HEALTHCARE INC. 53.53 524,058.70 2.02 0.00 0.00

2,996,081.18 11.56 696.04 0.02Industrials

8,173 ALTRA INDUSTRIAL 28.39 232,031.47 0.90 3,805.32 1.646,760 ALBANY INTERNATIONAL

CORP. CL A37.99 256,812.40 0.99 4,391.49 1.71

10,678 CAI INTERNATIONAL INC. 23.20 247,729.60 0.96 0.00 0.0010,096 ENERSYS 61.72 623,125.12 2.40 6,418.19 1.0312,644 FRANKLIN ELEC CO 37.53 474,529.32 1.83 4,555.48 0.96

9,935 GATX CORP 57.54 571,659.90 2.21 13,662.67 2.3918,778 HEXCEL CORP 41.49 779,099.22 3.01 0.00 0.00

6,416 MOOG INC-CLASS A 74.03 474,976.48 1.83 0.00 0.005,637 SNAP-ON INC 136.74 770,803.38 2.97 10,174.60 1.327,777 TAL INTERNATIONAL GROUP

INC.43.57 338,843.89 1.31 23,854.61 7.04

4,671 TELEDYNE TECH 102.74 479,898.54 1.85 0.00 0.008,367 TIMKEN CO 42.68 357,103.56 1.38 8,641.91 2.42

5,606,612.88 21.64 75,504.27 1.35Information Technology

9,496 CABOT MICROELEC 47.32 449,350.72 1.73 0.00 0.0016,022 CHECKPOINT SYS 13.73 219,982.06 0.85 0.00 0.00

6,046 COHERENT INC 60.72 367,113.12 1.42 0.00 0.0034,162 ENTEGRIS INC 13.21 451,280.02 1.74 0.00 0.0011,400 EPIQ SYSTEMS INC. 17.08 194,712.00 0.75 4,458.90 2.2920,949 FAIRCHILD SEMICO 16.88 353,619.12 1.36 0.00 0.0013,800 FLIR SYSTEMS 32.31 445,878.00 1.72 5,662.65 1.27

6,306 GLOBAL PAYMENTS 80.73 509,083.38 1.96 509.08 0.105,108 ITRON INC 42.29 216,017.32 0.83 0.00 0.004,801 LITTELFUSE INC 96.67 464,112.67 1.79 4,594.72 0.99

10,494 MONOLITHIC POWER 49.74 521,971.56 2.01 3,392.82 0.6511,348 SANMINA CORP 23.53 267,018.44 1.03 0.00 0.0015,611 SAPIENT CORP 24.88 388,401.68 1.50 0.00 0.00

4,848,540.09 18.71 18,618.17 0.38

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IncomeYield

Materials

5,563 CABOT CORP 43.86 243,993.18 0.94 4,782.27 1.966,600 SCOTTS MIRACLE-A 62.32 411,312.00 1.59 25,460.21 6.194,183 TIMKENSTEEL 37.03 154,896.49 0.60 2,505.61 1.628,133 VALSPAR CORP 86.48 703,341.84 2.71 8,651.10 1.23

1,513,543.51 5.84 41,399.19 2.74Telecommunication Services

6,304 SBA COMM CORP-A 110.76 698,231.04 2.69 0.00 0.00698,231.04 2.69 0.00 0.00

Utilities

7,869 SOUTH JERSEY IND 58.93 463,720.17 1.79 15,117.28 3.2610,749 WGL HLDGS INC 54.62 587,110.38 2.27 19,022.38 3.24

1,050,830.55 4.06 34,139.65 3.2524,427,538.91 94.28 293,823.07 1.20

Real Estate Investment Trust

Financials

30,220 FIRST POTOMAC RE 12.36 373,519.20 1.44 17,816.87 4.7734,800 MEDICAL PROPERTI 13.78 479,544.00 1.85 28,245.14 5.89

853,063.20 3.29 46,062.01 5.40853,063.20 3.29 46,062.01 5.40

Cash and Equivalents

611,750 U.S. DOLLARS 1.00 611,750.29 2.36 0.0018,217 USD - DIVIDENDSRECEIVABLE 1.00 18,217.08 0.07 0.00

629,967.37 2.43 0.00 0.00629,967.37 2.43 0.00 0.00

Total Portfolio 25,910,569.48 100.00 339,885.08 1.31

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Fee Schedule

0.50% thereafter

0.60% on the next $25,000,000

0.75% on the next $15,000,000

0.95% on the first $10,000,000



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Glossary of Key Indices


The Russell 2000® Value Index offers investors access to the small-cap value segment of the U.S. equity universe. The Russell 2000® Value is constructed to provide a comprehensive and unbiased barometer of the small-cap value market. Based on ongoing empirical research of investment manager behavior, the methodology used to determine value probability approximates the aggregate small-cap value manager's opportunity set. The index is unmanaged and it is not possible to invest directly in an index.



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Disclosure Notes

Nothing presented herein is intended to constitute investment advice and no investment decision should be made based on any information provided herein. Investments cited may not represent current or future holdings of EARNEST Partners, LLC (“EP”) investment products and nothing presented should be construed as a recommendation to purchase or sell a particular type of security or follow any investment technique or strategy. Information provided reflects EP's views as of a particular time. Such views are subject to change at any point and EP shall not be obligated to provide any notice of such change. Any forward looking statements or forecasts are based on assumptions and actual results are expected to vary from any such statements or forecasts. No reliance should be placed on any such statements or forecasts when making any investment decision. While EP has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability or completeness of third-party information presented herein. Performance assumes the reinvestment of dividends and capital gains. No guarantee of investment performance is being provided and no inference to the contrary should be made.



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