Cramer Quaterly Report to Miami Pension Plan

Cramer Rosenthal McGlynn, LLC520 Madison AvenueNew York, NY 10022T 212.326.5325

www crmllc.comwww crmfunds.com

City of Miami General Employees' & Sanitation Employees' Retirement TrustMarch 25, 2013

Christopher Barnett – President

CRM Small Cap Value December 2012

Table of Contents

one

two

three

four

five

Organization

Investment Portfolio

Strategy

Summary

Appendix

CRM Client Review | As of December 2012

Organization Investment Portfolio Strategy Summary Appendix

Investing with Clarity for Over Three DecadesDistinguishing Characteristics

4

Experience – more than three decadesOrigination as All Cap investors

Time tested investment results

Institutional knowledge base

Commitment Philosophy & Process—identifiable and repeatable

High quality research team

Team environment—strong culture and continuity

Our ClientsAlignment of interests

Stable, diversified asset base

Founded

Founders

Chairman

CEO

President

Assets

Ownership

Staff

1973

Gerald Cramer, Edward Rosenthal& Ronald McGlynn

Ronald McGlynn

Jay Abramson

Christopher Barnett

$13.4 billionAs of December 2012

16 Active EmployeesM&T Bank Corporation

57 Employees22 Investment Analysts2 Traders8 Client Service


Deep Value

Bankruptcy/Distressed

Value

Core

GARP Momentum

Growth Venture


Opportunistic Value InvestorsEquity Style Spectrum

5

CRM’s focus lies left of ‘core’ and right of ‘deep value’. A fair label would be relative value, which allows for thoughtful, opportunistic investing within the framework of our valuation discipline.



The Firm at a GlanceStrategies & Client Base

6

Individual

Institutional

Mutual Funds

Client Base

Corporations

Endowments & Foundations

Foreign

Public & Taft Hartley

Sub-Advisory

Institutional SMA Clients

Strategy Inception Assets StatusSmall/Mid Cap Value 1973 $3,432 million Soft-Closed

Small Cap Value 1995 $1,297 million Soft-ClosedMid Cap Value 1998 $5,604 million Soft-Closed

All Cap Value 2002 $1,036 million OpenLarge Cap Opportunity 2005 $1,694 million Open

Alternatives 1993 $199 million OpenGlobal Opportunity 2009 $58 million Open

International Opportunity 2009 $21 million Open

Client BaseIndividual 1973 $0.6 billionInstitutional 1985 $7.7 billionMutual Funds 1995 $4.9 billion

Institutional SMA Clients % of AssetsCorporations 31%Endowments & Foundations 6%

Foreign 31%Public & Taft-Hartley 14%

Sub-Advisory 18%



Our Greatest AssetRepresentative Client List

CRM selected the representative clients listed above based on a variety of objective criteria, including the size of the account, the type of account and the geographic location of the client. CRM does not know whether the listed clients approve or disapprove of CRM or the advisory services provided by CRM. These clients' accounts are representative of all management styles offered by CRM.

7

Abilene Christian UniversityAmerican College of CardiologyButler UniversityCentral Michigan UniversityChurch Farm SchoolCollege of Saint BenedictIndiana UniversityMillsaps CollegeMississippi State UniversityThe Texas A & M University SystemUniversity of CincinnatiWalsh CollegeWright State University

Archdiocese of IndianapolisBaptist Healthcare SystemCedars-Sinai Medical CenterCentral Indiana Community FoundationChristian Church FoundationFoundation For The CarolinasJewish Community Federation of Los AngelesPrincess Grace FoundationSan Antonio Area FoundationUniHealth FoundationUS Holocaust Memorial Museum Endowment

Archer Daniels Midland CompanyBAE Systems North AmericaCelanese Americas CorporationEntergy CorporationElectrolux Home Products, Inc.Guardian IndustriesHighmark, Inc. Hospitals Insurance CompanyInternational Paper CompanyManchester Capital Management LLCNiSource, Inc.The McGraw-Hill Companies, Inc.Parker Hannifin CorporationStrattec Security Corporation

Arizona State Retirement SystemCity of Miami General Employees' & Sanitation Employees’ Retirement TrustCity of Phoenix Employees' Retirement SystemForestersRoad Carriers Local 707 Pension FundTeachers' Retirement System of the City of New YorkTeachers' Retirement System of the State of IllinoisTri-State District Council of Carpenters of Chattanooga and Vicinity Pension FundThe UFCW Local Union #1099, Southwest Ohio

Educational Institutions

Endowments & Foundations Corporations

Public & Union Funds



Why Cramer Rosenthal McGlynn?Competitive Advantage

8

Boutique culture, intense research driven processEquity investing is our sole focus. As a firm, we have invested according to same philosophy for nearly 40 years while carefully managing asset growth.

Unique, relatively concentrated portfolioActive share across our strategies has consistently been above 90% since the inception of the products1.

We seek to invest in 50-70 holdings, allowing stock picking to drive performance.

Deep team with diverse experienceA team of approximately 20 analysts - many who were previously practitioners in their fields and have an average of more than 15 years of financial experience.

1Active share is defined as a measure of the percentage of the portfolio that differs from its benchmark



Investing at the Intersection of Change & NeglectInvestment Philosophy

ChangeThe financial markets are rich with change. Every day the markets present investors with mergers, divestitures, restructurings, new management teams or new products and expanded markets.

NeglectEspecially in its early stages, change tends to be greeted with uncertainty, expressed as investor neglect - manifested through behavioral finance, low analytical coverage, negative to neutral stock ratings and low institutional ownership.

ValuationWhen change meets neglect, the intrinsic value of a company may exceed the current stock price. At the intersection of change and neglect with attractive valuation, CRM seeks the potential for substantial outperformance with lower downside risk.

The conviction to invest before the rewards of change are realized requires an investment process grounded in intensive original research.

Companies bought and held are typically characterized by three main attributes: change, neglect and valuation.

9



Meet the TeamInvestment Research

Jay Abramson27 Years Financial ExperienceBSE The Wharton School of the University of Pennsylvania JD University of Pennsylvania Law School

Adriano Almeida, CFA13 Years Financial ExperienceMS Embry-Riddle Aeronautical UniversityMBA Columbia Business School

Andrey Belov, Ph.D.15 Years Financial ExperienceBS Moscow Institute of Physics & TechnologyPhD Princeton University

Ian Bitner10 Years Financial ExperienceBS Indiana University

Mike Caputo17 Years Financial ExperienceBA University of Notre DameMBA The Wharton School of the University of Pennsylvania

Sackett Cook21 Years Financial ExperienceBA Tulane University

Tom DeBourcy, CFA7 Years Financial ExperienceBS The Wharton School of the University of Pennsylvania

Brittain Ezzes15 Years Financial ExperienceBA Brown University

Bernard Frojmovich13 Years Financial ExperienceBS CUNY Brooklyn CollegeMBA NYU Stern School of Business

Brian Harvey, CFA19 Years Financial ExperienceBS Fairfield University

Milu Komer18 Years Financial ExperienceBS Wellesley CollegeMBA The Wharton School of the University of Pennsylvania

Rob Maina19 Years Financial ExperienceBS Fairfield University

Ron McGlynn45 Years Financial ExperienceBA Williams CollegeMBA Columbia Business School

Mimi Morris11 Years Financial ExperienceBA Williams CollegeMBA Columbia Business School

Thad Pollock12 Years Financial ExperienceBS Yale University

Jeff Reich, MD11 Years Financial ExperienceBA Binghamton UniversityMD Weill Medical College of Cornell University

Chip Rewey, CFA22 Years Financial ExperienceBS Boston CollegeMBA Duke University

Jonathan Ruch11 Years Financial ExperienceBA Cornell University

Andrew Singer, CFA13 Years Financial ExperienceBA Tufts UniversityMBA Babson College F.W. Olin Graduate School of Business

Martin Teng, CFA13 Years Financial ExperienceMS, BS University of IllinoisMBA MIT Sloan School of Management

Strategy LeadsSmall Cap ValueMike CaputoBrian Harvey

Small/Mid Cap ValueJay AbramsonChip ReweyJonathan Ruch

Mid Cap ValueJay AbramsonThad PollockChip Rewey

Large Cap OpportunityJay AbramsonRob MainaChip Rewey

All Cap ValueJay AbramsonMike CaputoJeff ReichChip Rewey

Global OpportunityJay AbramsonMilu Komer

International OpportunityMilu Komer

10

Investment Team*

*Financial experience may include experience in the financial services or consulting sector, including, among other areas, tax consulting, investment banking, research analysis.


The WIP list is reviewed weekly in the sector meetings and helps to direct and monitor the research analysts’ workflow and progress.

Liz Claiborne LIZ

Martin Marietta Materials MLM

Pier 1 Imports Inc. PIR

Quicksilver ZQK

Brown

Amerigroup AMGP

Aquila ILA

Aspreva Pharmaceutica ASPV

CONMED Corporation CNMD

DPL Inc. DPL

Entergy Corporation ETR

First Horizon Pharmaceutical FHRX

Kos Pharmaceuticals, Inc. KOSP

Caputo

ABM Industries Inc. ABM

CBL & Associates CBL

Grubb & Ellis GBE

Hanes Brands Inc. HBI

Jack in the Box Inc. JBX

Morgans Hotel Group MHGC

Time Warner Cable Inc. TWC

5. By Current Price6. W.I.P Co's

B. Analyst - PriorityA. Analyst - Company

Leading the Way with Sector Teams

Sector LeadsBusiness ServicesJonathan Ruch

Consumer DiscretionaryMike Caputo

Consumer StaplesThad Pollock

FinancialBrian Harvey

HealthcareJeff Reich

UtilitiesJay Abramson

Energy & IndustrialsChip Rewey

Technology & TelecommunicationsRob Maina

Investment Process

Business ServicesTom DeBourcy, CFARob MainaJonathan Ruch

Consumer DiscretionaryMike CaputoMimi MorrisJonathan Ruch

Consumer StaplesJay AbramsonMike CaputoMimi MorrisThad Pollock

EnergyAdriano Almeida, CFARob MainaChip Rewey, CFA

FinancialBernard FrojmovichBrian Harvey, CFAThad PollockChip Rewey, CFA

HealthcareTom DeBourcy, CFAThad PollockJeff Reich, MD

IndustrialsAdriano Almeida, CFAIan BitnerBrittain EzzesChip Rewey, CFAAndrew Singer, CFA

Technology &TelecommunicationsTom DeBourcy, CFABrittain EzzesRob Maina

UtilitiesJay AbramsonAdriano Almeida, CFAChip Rewey, CFA

InternationalAndrey Belov, Ph.D.Sackett CookMilu KomerMartin Teng, CFA

Sector Teams



The Identifiable & Repeatable ProcessInvestment Process Overview

Idea Generation

Sector TeamsWork-in-Process List

Due Diligence

Investment Decision

12

The dedicated leadership of our CIO and Portfolio Managers catapults the intensive and collaborative research process and strategy management at the Firm.

The Portfolio

Sell Discipline

Risk Management

All steps in the process are captured in our database, containing 19 years of detailed investment history.

C. R. Bard, Inc.

Due Diligence

> Other: Agento IC due dilig> Company Call: Boston Glo> Company Call: 2Q08 Earni> Other: Hernia due diligenc> Company Call: 1Q08 Earni> Company Visit: Covidien L> Company Call: Form 483 o> Company Call: 4Q07 Earni> Company Visit: Investor D

la > Company Visit: Dinner wit> Company Call: Lifestent de> Company Call: CEO prese> Company Visit: HQ Visit> Company Call: 3Q07 Earni> Other: Agento abstract - E> Company Call: 1-1 with C

CRM Research DB

1. By Analyst

2. By Ticker

3. By Compa

4. Company P

5. By Current

6. W.I.P. Co's

7. Price Alar



The Team's Idea GenerationInvestment Process

13

Uncovering Change, Neglect & Low Valuation

Qualitative 75%Utilizes Change As a Driver of Broader Ideas & Themes

Leverage Themes Across Strategies - Horizontally & Vertically

Due Diligence on Existing Holdings

Internal Research Database - Tamale

Institutional Knowledge Base

Key Development Reports

Management Changes

Corporate Restructurings

Quantitative Screens 25%Price & Neglect

Performance Disappointments

Under-Earners on a Monthly, Quarterly, Yearly Basis

Negative Investor Sentiment

Minimal Wall Street Coverage

CRM StrategiesInitial Stock Universe & Market Cap Ranges (in billions)

0

2

4

6

8

10

12

14

Small Smid Mid Large All

$400

$12

$6

$3

$1.5

$1

$0.5

$0.1



The Decision to InvestInvestment Process

14

An Investment Case is established for all CRM holdings, which clearly identifies the expected change, neglect, valuation and risk. The Investment Case is key in maintaining our sell discipline.

Idea Generation and Investment Cases are processed by 9 Sector Teams.

Emphasize bottom-up, fundamental analysis

Create a proprietary financial model and assess the valuation

Sensitivity to core assumptions

Conduct all level management interviews and company visits

Contact customers, suppliers and competitors

Establish the Investment Case and Target Price, seeking at least 50% upside over a 2 year investment horizon

The final decision to invest is made by the Portfolio Managers with input from relevant Sector Teams.

Past performance is not indicative of future results.



Portfolio ConstructionInvestment Process

15

Both our buy and sell disciplines revolve around our Investment Case for each individual investment.

Buy DisciplineFocus on bottom-up fundamental company research, identifying a high quality of management and overall business franchise

Understand the investment’s risks and rewards subject to strategy’s risk controls and existing holdings

Portfolio Holdings: 50-70 stocks with an investment horizon of about 2 years

Conviction Weighting: 1-5% position size

Sell DisciplineDependence on the original Investment Case

A stock will be sold when one or more of the following occurs:• Target price is attained, company reaches our fair valuation• Fundamentals of the Investment Case deteriorate• Investment is replaced by a higher conviction stock or a stock with a greater risk/reward profile



Weekly meetings focus on all levels of Risk ControlSector Teams - Investment Case FocusPortfolio Managers - Strategy & Client FocusRisk Management Committee - Investment Wide Focus

Identification of neglect and low expectations provides downside protection

Monitor established Investment Case

All strategy holdings evaluated for inclusion in CRM Risk Buckets

Aware of market capitalization and sector weightings relative to benchmarks, with imposed 35% Russell Sector limit

Strict adherence to sell discipline and review of established price targets and relative performance screens

The Portfolio Managers evaluate strategy risk by identifying a range of factors, beyond economic and industry sectors, that may impact the companies we own.

CRM Risk Buckets

16

Controlling Risk in the PortfoliosInvestment Process


Organization Investment Portfolio Strategy Summary Appendix 17

CRM Small Cap Value Performance Recap2012 Attribution

12/11 3/12 6/12 9/12 12/12

10,000

10,500

11,000

11,500

12,000

Cumulative Return Chart12/2011 to 12/2012

CRM Small Cap Value Taxable Comp - G Russell 2000 Value - Total Return

For the year, the CRM Small Cap Value strategy kept pace with the Russell 2000 Value Index and our upside participation was in line with our expectations given the strong breadth of the market. Outside of the eight weeks of monetary policy induced directional move, our stock selection generally added value for most of the year.

1

2

3

1

2

3

ECB announcement

QE announcement

Performance AttributionCRM Small Cap Value vs. Russell 2000 Value Index12/30/2011 to 7/24/2012U.S. Dollar

CRM Small Cap Value Russell 2000 Value Attribution Analysis

Port. Port. Port. Bench. Bench. Bench.Average Total Contrib. Average Total Contrib. Allocation Selection Interaction Total

Custom Russell Global Sectors Weight Return To Return Weight Return To Return Effect Effect Effect Effect

Consumer Discretionary 13.56 16.56 2.23 12.36 5.76 0.61 0.23 1.21 -0.15 1.29Consumer Staples 1.01 13.54 0.11 2.81 0.54 0.03 0.11 0.44 -0.29 0.26Energy 3.39 -5.47 -0.17 3.99 -11.87 -0.40 0.03 0.21 -0.06 0.18Financial Services 21.62 6.97 1.29 37.47 10.56 3.71 -0.86 -1.30 0.57 -1.59Health Care 7.55 6.57 0.46 5.19 12.26 0.63 0.18 -0.28 -0.14 -0.24Materials & Processing 12.28 8.85 0.96 6.98 -0.63 0.03 -0.31 0.60 0.48 0.76Producer Durables 17.14 8.78 1.51 14.09 -0.45 0.00 -0.11 1.20 0.28 1.37Technology 12.46 -20.19 -2.11 9.76 -6.57 -0.60 -0.13 -1.49 -0.07 -1.69Utilities 10.98 7.42 0.91 7.36 3.44 0.29 0.13 0.26 0.16 0.56Total 100.00 5.21 5.21 100.00 4.30 4.30 -0.72 0.85 0.78 0.91

Source: FactSet Research Systems, Inc.




Beta - Russell 2000 Value 36 month Weight Return To Return Weight Return To Return Effect Effect Effect Effect

Quintile 1 (Highest) 15.91 12.68 2.10 17.43 17.36 2.99 -0.08 -0.77 0.09 -0.76Quintile 2 22.14 17.36 3.76 19.48 15.03 2.91 0.04 0.44 0.04 0.51Quintile 3 26.29 8.80 2.30 21.81 13.76 2.99 -0.00 -1.04 -0.20 -1.25Quintile 4 20.33 8.40 1.71 21.96 10.50 2.31 0.04 -0.43 0.02 -0.37Quintile 5 (Lowest) 15.33 17.43 2.62 19.33 11.51 2.25 0.07 1.08 -0.23 0.92Total 100.00 12.50 12.50 100.00 13.45 13.45 0.07 -0.73 -0.30 -0.95

Source: Factset Research Systems, Inc.




Custom Russell Global Sectors Weight Return To Return Weight Return To Return Effect Effect Effect Effect

Consumer Discretionary 12.35 -2.18 -0.37 12.38 1.24 0.17 0.01 -0.43 -0.03 -0.45Consumer Staples 1.84 -6.72 -0.07 2.23 0.41 0.01 0.02 -0.14 0.07 -0.05Energy 3.91 -8.41 -0.35 5.92 -6.75 -0.44 0.15 -0.10 0.09 0.14Financial Services 28.01 0.06 0.10 36.66 -0.26 -0.08 -0.02 0.13 -0.02 0.09Health Care 6.95 2.28 0.18 4.84 -4.85 -0.25 -0.09 0.38 0.17 0.46Materials & Processing 12.75 -0.41 0.29 7.25 3.51 0.28 0.25 -0.28 -0.16 -0.18Producer Durables 15.57 3.10 0.38 12.83 3.64 0.49 0.10 -0.08 -0.02 0.01Technology 8.92 0.14 0.04 10.48 -2.07 -0.24 -0.00 0.30 -0.08 0.22Utilities 9.69 -2.27 -0.27 7.41 -1.50 -0.15 0.01 -0.06 -0.02 -0.07Total 100.00 -0.07 -0.07 100.00 -0.22 -0.22 0.43 -0.28 0.01 0.15




CRM Small Cap Value Performance RecapBeta Remained a Consistent Theme

The CRM Small Cap Value portfolio generally participated on the upside during the fourth quarter. The highest beta stocks were again top performers. As we continue to focus on risk-adjusted returns, our lack of exposure to the highest beta segment of the benchmark was a consistent headwind throughout the year. Highest beta constituents as top performers in 4Q12

Performance

Contribution

to Return

Hovnanian Enterprises Inc. Cl A 102.31 0.02Lin TV Corp. 71.14 0.01AVG Technologies N.V. 64.90 0.00Crawford & Co. Cl B 61.88 0.01Louisiana-Pacific Corp. 54.56 0.06Bluegreen Corp. 49.36 0.00Virtus Investment Partners Inc. 40.63 0.01American Woodmark Corp. 39.31 0.00Conn's Inc. 39.04 0.01NCI Building Systems Inc. 38.58 0.00Dycom Industries Inc. 37.69 0.00PGT Inc. 37.20 0.00M/I Homes Inc. 37.02 0.01TeleNav Inc. 33.81 0.00Pike Electric Corp. 33.40 0.00Carmike Cinemas Inc. 32.98 0.00CVR Energy Inc. 32.76 0.00Alon USA Energy Inc. 32.42 0.00Kronos Worldwide Inc. 31.75 0.01Metals USA Holdings Corp. 31.36 0.00

Total Contribution to Return 0.16

Highest beta constituents as top performers in 2012

Performance

Contribution to

Return

Hovnanian Enterprises Inc. Cl A 382.76 0.04Bon-Ton Stores Inc. 274.41 0.01PulteGroup Inc. 187.80 0.30Conn's Inc. 176.21 0.02M/I Homes Inc. 176.04 0.02AMN Healthcare Services Inc. 160.72 0.01Smart Balance Inc. 140.67 0.03Louisiana-Pacific Corp. 139.41 0.11Ocwen Financial Corp. 138.88 0.15NewLink Genetics Corp. 138.35 0.00Capital Senior Living Corp. 135.39 0.01Western Refining Inc. 134.96 0.02Mueller Water Products Inc. 134.23 0.02Kimball International Inc. Cl B 134.12 0.02Gulfport Energy Corp. 128.86 0.06Delek US Holdings Inc. 127.62 0.02Crawford & Co. Cl B 126.86 0.01Sunesis Pharmaceuticals Inc. 123.93 0.00Sunrise Senior Living Inc. 121.91 0.01Sun Healthcare Group Inc. 119.33 0.01

Total Contribution to Return 0.85





Quintile 1 (Highest) 15.48 4.56 0.66 16.50 6.66 1.10 -0.04 -0.34 0.02 -0.36Quintile 2 21.29 -0.30 -0.02 20.26 6.45 1.31 0.04 -1.36 -0.10 -1.42Quintile 3 22.45 0.98 0.08 21.24 2.39 0.48 -0.02 -0.28 -0.08 -0.38Quintile 4 23.39 6.28 1.52 22.55 0.17 0.02 -0.03 1.39 0.02 1.37Quintile 5 (Lowest) 17.37 5.50 0.94 19.40 1.59 0.31 0.05 0.77 -0.09 0.73Total 100.00 3.21 3.21 100.00 3.23 3.23 0.01 0.17 -0.21 -0.02






Quintile 1 (Highest) 17.74 23.86 3.81 17.93 38.38 5.93 0.10 -2.18 -0.19 -2.28Quintile 2 19.19 27.16 5.20 20.32 22.27 4.46 -0.03 0.91 -0.04 0.84Quintile 3 24.40 5.03 0.70 20.75 14.17 3.03 -0.12 -1.84 -0.84 -2.80Quintile 4 22.96 16.88 4.10 20.96 5.39 1.33 -0.26 2.25 0.13 2.11Quintile 5 (Lowest) 15.72 25.27 3.56 20.03 12.96 2.72 0.21 2.14 -0.47 1.87

Total 100.00 17.37 17.37 100.00 17.48 17.48 -0.10 1.27 -1.42 -0.25



QTD YTD 3 Year 5 Year ICD*

Client – Gross 3.02% 17.49% 10.00% 4.00% 7.89%

Client – Net 2.76 16.31 8.90 2.96 6.82

Russell 2000 Value Index 3.22 18.05 11.57 3.55 7.57

Russell 2000 Index 1.85 16.35 12.25 3.56 6.44

2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002

Client - Gross 17.49% -12.75% 29.84% 30.66% -30.05% -2.14% 15.41% 11.56% 19.34% 50.35% -17.31%

Client - Net 16.31 -13.62 28.56 29.37 -30.76 -3.11 14.27 10.45 18.17 48.83 -18.13

Russell 2000 Value Index 18.05 -5.50 24.50 20.58 -28.92 -9.78 23.48 4.71 22.25 46.03 -11.42

Russell 2000 Index 16.35 -4.18 26.85 27.17 -33.79 -1.57 18.37 4.55 18.33 47.25 -20.48


Annualized & Calendar Year PerformanceDecember 31, 2012

19

* Inception date: July 6, 2001

Fiscal YTD Performance9/30/2012-12/31/2012

Client – Gross 3.02%

Client – Net 2.76

Russell 2000 Value Index 3.22

Russell 2000 Index 1.85




Performance AttributionYTD as of December 31, 2012

CRM Account Russell 2000V CRM Account Russell 2000V

Russell Sectors Total Return Total Return Average Weight Average Weight Allocation Selection Interaction Total Effect

Consumer Discretionary 34.59 27.30 12.69 12.37 0.16 0.79 -0.23 0.73

Consumer Staples 16.39 10.48 1.41 2.59 0.15 0.32 -0.21 0.25

Energy -10.78 2.26 3.46 4.80 -0.04 -1.05 0.53 -0.55

Financial Services 21.27 22.05 24.19 37.04 -0.73 -0.51 0.40 -0.84

Health Care 23.35 15.39 7.41 5.07 -0.03 0.31 0.13 0.42

Materials & Processing 18.98 27.00 12.38 7.05 0.38 -0.50 -0.27 -0.39

Producer Durables 31.07 17.44 16.63 13.47 -0.01 1.64 0.37 1.99

Technology -5.49 5.34 11.15 10.17 -0.17 -1.03 -0.22 -1.42

Utilities 4.93 5.64 10.69 7.43 -0.20 -0.08 0.00 -0.29

Total 18.11 18.07 100.00 100.00 -0.49 -0.11 0.49 -0.11

The Top Contributors Average % Contribution Top Detractors Average % Contribution

The Geo Group Inc. 1.66 1.31 Quantum Corporation 0.69 -0.75

DSW Inc. 1.85 0.82 Super Micro Computer Inc. 1.24 -0.72

A.O. Smith Corp. 1.72 0.81 Aeroflex Holding Corporation 0.61 -0.30

Potlatch Corp. 2.49 0.78 Capstone Turbine Corporation 1.07 -0.27

G & K Services Inc. 1.59 0.78 Atmel Corporation 1.43 -0.25



The Portfolio and Top PositionsDecember 31, 2012

Portfolio Inception Date July 6, 2001 Market Capitalization Focus $100 million - $1.5 billion

Total Assets in Portfolio $28,528,807 Number of Holdings 65

Product Separately Managed Account Maximum Security Position / Sector Exposure 6% at market / 35% Russell

21

The Top Ten Business % in Strategy

GEO Group Inc.The company provides government-outsourced services specializing in the management of correctional, detention, mental health, residential treatment, and re-entry facilities in the United States, Australia, South Africa, the United Kingdom, and Canada

2.8

Potlach CorporationThe company operates as a real estate investment trust (REIT) that owns and manages timberlands located in Arkansas, Idaho, Minnesota and Wisconsin in the United States.

2.6

CONMED Corporation A medical technology company, provides surgical devices and equipment for minimally invasive procedures and monitoring. 2.5

Carpenter Technology Corporation The company engages in the manufacture, fabrication, and distribution of specialty metals. 2.3

Barnes Group Inc.The company operates as an aerospace and industrial manufacturing and service provider serving a range of end markets and customers worldwide.

2.2

Southwest Gas Corporation The company engages in the purchase, distribution, and transportation of natural gas in Arizona, Nevada, and California 2.1

Northwestern Corporation It does business as NorthWestern Energy, provides electricity and natural gas in Montana, South Dakota, and Nebraska, the United States. 2.0

Interface Inc.The company engages in the design, production, and sale of floor covering products for the commercial, institutional, and residential markets primarily in the Americas, Europe, and the Asia-Pacific.

1.9

Calgon Carbon CorporationThe company provides services and solutions for purifying water and air, food, beverage, and industrial process streams primarily in the United States, Europe, and Japan.

1.9

Chesapeake Lodging TrustA self-advised real estate investment trust (REIT) focused on investments primarily in business and convention markets upper-upscale hotelsand, on a selective basis, select-service and extended-stay hotels in urban settings or locations in the United States of America.

1.9

Total 22.2%


Portfolio HoldingsDecember 31, 2012

Cost/ Price/ Cost/ Price/Share Share Share Share

28,725 GEO GROUP INC 23.98 28.20 810,045.00 2.84 19,900 QUANEX BUILDING PRODUCTS 19.62 20.41 406,159.00 1.42

19,000 POTLATCH CORP 30.45 39.15 743,832.90 2.61 44,700 BOSTON PRIVATE FINANCIAL HOLDINGS INC 7.86 9.01 402,747.00 1.41

25,800 CONMED CORP 20.21 27.95 721,110.00 2.53 8,000 RBC BEARINGS INC 38.23 50.07 400,560.00 1.40

12,650 CARPENTER TECHNOLOGY 48.94 51.63 653,119.50 2.29 20,700 SELECTIVE INSURANCE GROUP INC 18.29 19.27 398,889.00 1.40

27,600 BARNES GROUP INC 21.65 22.46 619,896.00 2.17 13,200 BRUNSWICK CORP 24.99 29.09 383,988.00 1.35

13,800 SOUTHWEST GAS CORP 38.64 42.41 585,258.00 2.05 37,600 SUPER MICRO COMPUTER INC 14.62 10.20 383,520.00 1.35

16,600 NORTHWESTERN CORP 31.87 34.73 576,518.00 2.02 16,800 THERMON GROUP HOLDINGS INC 23.09 22.53 378,504.00 1.33

33,900 INTERFACE INC 14.20 16.07 544,773.00 1.91 25,600 CUBESMART 11.67 14.57 372,992.00 1.31

37,900 CALGON CARBON CORP 13.41 14.18 537,422.00 1.89 10,700 SUSSER HOLDINGS CORP 28.87 34.49 369,043.00 1.29

25,500 CHESAPEAKE LODGING TRUST 16.66 20.88 532,440.00 1.87 34,900 SAPIENT CORP 8.97 10.56 368,544.00 1.29

15,100 STERIS CORP 32.26 34.73 524,423.00 1.84 31,190 CAPITOL FEDERAL FINANCIAL 10.58 11.69 364,611.10 1.28

18,600 MRC GLOBAL INC 22.00 27.78 516,708.00 1.81 5,550 DSW INC 49.61 65.69 364,579.50 1.28

11,050 PLATINUM UNDERWRITERS HOLDINGS LTD 36.49 46.00 508,300.00 1.78 11,200 OASIS PETROLEUM INC 29.96 31.80 356,160.00 1.25

16,700 EVERCORE PARTNERS INC 25.62 30.19 504,173.00 1.77 19,200 INTERNATIONAL RECTIFIER CORP 18.94 17.73 340,416.00 1.19

14,000 UIL HOLDINGS CORP 26.28 35.81 501,340.00 1.76 26,400 FIRST MIDWEST BANCORP 12.52 12.52 330,528.00 1.16

17,450 BUCKEYE TECH INC COM 32.27 28.71 500,989.50 1.76 3,550 COOPER COMPANIES INC 29.27 92.48 328,304.00 1.15

14,600 G & K SERVICES INC 25.01 34.15 498,590.00 1.75 5,800 EASTGROUP PROPERTIES 49.44 53.81 312,098.00 1.09

24,850 MB FINANCIAL INC 19.27 19.75 490,787.50 1.72 4,600 CHURCHILL DOWNS INC 34.65 66.45 305,670.00 1.07

10,900 ELIZABETH ARDEN INC 38.73 45.01 490,609.00 1.72 5,650 VAIL RESORTS 37.82 54.09 305,608.50 1.07

20,700 ITT CORP 19.81 23.46 485,622.00 1.70 8,900 G-III APPAREL 33.18 34.23 304,647.00 1.07

15,300 HANCOCK HOLDING 31.24 31.73 485,469.00 1.70 5,900 CITY NATIONAL CORP 47.87 49.52 292,168.00 1.02

27,900 REGIS CORP 17.85 16.92 472,068.00 1.66 9,000 ENERGY XXI LIMITED 35.51 32.17 289,530.00 1.02

47,200 INTERMEC INC 11.44 9.86 465,392.00 1.63 11,400 HAWAIIAN ELECTRIC INDUS 22.05 25.14 286,596.00 1.01

14,500 EL PASO ELECTRIC CO 32.02 31.91 462,695.00 1.62 8,800 DREW INDUSTRIES 31.41 32.25 283,800.00 1.00

32,100 FAIRCHILD SEMICON INTL 13.89 14.40 462,240.00 1.62 6,750 APPLIED INDUSTRIAL TECH 32.77 42.01 283,567.50 0.99

14,450 STIFEL FINANCIAL CORP 35.06 31.97 461,966.50 1.62 10,100 CON-WAY INC 28.44 27.82 280,982.00 0.99

30,700 KFORCE INC 12.30 14.34 440,238.00 1.54 6,600 FAIR ISAAC CORP 41.09 42.03 277,398.00 0.97

65,650 ATMEL 7.32 6.55 430,007.50 1.51 4,950 BIOMARIN PHARMACEUTICAL INC 16.18 49.20 243,540.00 0.85

6,800 SMITH AO CORP - SHORT 38.22 63.07 428,876.00 1.50 264,800 CAPSTONE TURBINE CORP 1.28 0.89 235,672.00 0.83

44,500 FULTON FINANCIAL CORP 10.14 9.61 427,645.00 1.50 32,900 MONSTER WORLD WIDE INC 10.97 5.62 184,898.00 0.65

6,800 GROUP 1 AUTOMOTIVE 34.78 61.99 421,532.00 1.48 142,100 QUANTUM CORPORATION 2.47 1.24 176,204.00 0.62

23,500 INVESTORS BANCORP INC. 13.38 17.78 417,830.00 1.47 2,300 CIRCOR INTERNATIONAL 37.37 39.59 91,057.00 0.32

6,150 ACUITY BRANDS INC 40.59 67.73 416,539.50 1.46 CASH 1.00 1.00 1,268,763.24 4.45

Security Market Value % Market Value Units Security Market Value % Market Value Units


Brokerage Activity SummaryQTD as of December 31, 2012


Broker Broker Name

Commission Broker Broker Name

CommissionCode Ammount Code AmmountB141 BARCLAYS CAPITAL 10,875.10 B801 JONES & ASSOCIATES INC 165.00

B183 SUNTRUST ROBINSON HUMPHREY 1,731.00 B61 CS FIRST BOSTON CORP 150.00

B76 GOLDMAN SACHS & CO 1,095.50 B150 BAYPOINT TRADING 140.00

B135 MERRILL LYNCH 1,058.00 B236 WEEDEN & CO 137.00

B40 RBC 852.50 B402 BURKE AND QUICK PARTNER LLC 122.00

B145 JPMORGAN CHASE 792.00 B146 MORGAN STANLEY CO INC 118.00

B6 BAIRD ROBERT W 659.50 B936 JMP SECURITIES LLC 116.00

B113 KEEFE BRUYETTE & WOODS 633.00 B562 WEDBUSH MORGAN SECURITIES INC 104.00

B124 STIFEL NICOLAUS 609.00 B1 AUTRANET 100.00

B192 CITIGROUP GLOBAL MARKETS 581.25 B160 OPPENHEIMER 80.00

B199 STEPHENS & CO 483.00 B946 BB&T (SCOTT &STRINGLE) 77.00

B102 JEFFERIES & COMPANY INC. 418.00 RADI ITG RADICAL 63.50

B167 U.S. BANCORP PIPER JAFFRAY 364.00 REDI GS REDI 63.01

B63 TELSEY ADVISORY GROUP 314.00 B401 INSTINET (GATEWAY) 54.00

B269 KING (C.L.) & ASSOCIATES 298.00 B912 JNK SECURITIES 52.50

B58 FIDELITY CAPITAL MARKETS 288.00 B107 DAVIDSON (D.A.) CO INC 40.00

B237 WEEDEN MARKET PLUS 279.50 B186 LONGBOW TRADING 40.00

B35 CANTOR FITZGERALD 272.50 B802 DAVENPORT & CO OF VIRGINIA 40.00

B38 COWEN & CO 262.00 B187 BERNSTEIN (SANFORD C) 38.50

B122 DEUTSCHE BANK 258.00 B818 STERNE AGEE & LEACH 36.00

B115 UBS 244.00 B244 WELLS FARGO SECURITIES 28.00

B965 SUSQUEHANNA 232.00 B32 BREAN MURRAY CARRET & CO 28.00

B19 ISI GROUP 216.00 B711 SANDLER ONEILL 24.00

B9 AVONDALE PARTNERS 204.00 B11 BUCKINGHAM RESEARCH GROUP 22.00

B268 KEYBANC CAPITAL MARKETS 200.00 B56 SJ LEVINSON/ALBERT FRIED 17.50

B181 RAYMOND JAMES & ASSOC 190.00 B929 LEERINK SWANN & COMPANY 8.00

B249 NEEDHAM CO 187.00 B104 PULSE TRADING SOFT DOLLAR 4.00

CSAES CS - AES 166.50 Total 25,631.36

23



Forward OutlookSmall Cap Value

• We remain confident that the investment climate will continue to improve post resolving the current fiscal concerns. Valuations are clearly higher than one year ago as market returns exceeded earnings growth, but multiples remain subdued relative to interest rates. Any reasonable re-acceleration in earnings growth will likely be paired with yet higher multiples which could produce returns similar to 2012 for the next couple of years or until such time as monetary policy becomes less accommodative.

• Companies have plenty of cash on their balance sheets which could pave the way for M&A activity to return and provide additional catalyst for our style of investing. CRM had a number of holdings involved in M&A across many of strategies in 2012 which was encouraging.

• Breadth should narrow as earnings expectations are reset and this is typically a better environment for fundamental active investors like us.

• We continue to find ample opportunities and will continue to be nimble, harvesting and adding to take advantage of any volatility.



The Characteristics and Russell Sector Exposure*

Small Cap Value

The sector breakdown chart above is presented to illustrate examples of sectors which were held in the Small Cap Value strategy as of the date indicated and may not be representative of the portfolio's current or future investments. Source: FactSet Research Systems, Inc.

The statistics above reflect the characteristics of the securities that comprised the representative account for the Small Cap Value strategy and the indices as of the date shown. The statistics provided are not related to or indicative of the strategy or the indices' performance.Source: Melon Analytical Solutions.

0 5 10 15 20 25 30 35 40

Consumer Discretionary

Consumer Staples

Energy

Financial Services

Health Care

Materials & Processing

Producer Durables

Technology

Utilities

Number of Holdings

Wtd. Ave. nLogMarket Cap ($m)

Price/ Earnings '14

Price/ Book

CRM Small Cap Value 65 1,380 17.5 x 1.7 x

Russell 2000 Value Index 1,422 910 15.0 x 1.3 x

Russell 2000 Index 1,978 1,040 16.3 x 1.8 x

*Supplemental Information: This supplements the CRM Small Cap Value Taxable Composite presentation on the reverse side.


Performance Disclosure

YearComposite Gross of

Fees Returns %Composite Net of Fees Returns %

Russell 2000 Value Index Returns %

Russell 2000 Index Returns %

Number of Portfolios

Internal Dispersion

Total Assets in Composite

$US MillionsTotal Assets in Firm

$US Millions CompositeRussell 2000 Value Index

Russell 2000 Index

2012 17.37 16.47 18.05 16.35 6 0.30 776 13,378 21.23 19.89 20.20

2011 -12.60 -13.26 -5.50 -4.18 7 0.56 741 12,487 24.53 26.05 24.99

2010 29.78 28.79 24.50 26.85 7 0.40 1,001 14,489 -- -- --

2009 30.55 29.69 20.58 27.17 7 0.39 707 11,860 -- -- --

2008 -30.07 -30.44 -28.92 -33.79 8 1.33 487 7,819 -- -- --

2007 -2.44 -3.2 -9.78 -1.57 8 0.54 726 11,431 -- -- --

2006 15.31 14.43 23.48 18.37 9 0.52 959 10,641 -- -- --

2005 11.57 10.71 4.71 4.55 11 0.71 910 8,910 -- -- --

2004 18.95 18.18 22.25 18.33 13 0.12 921 6,966 -- -- --

2003 49.58 48.43 46.03 47.25 8 1.51 610 4,885 -- -- --

2002 -16.98 -17.57 -11.43 -20.48 12 0.65 433 3,518 -- -- --

2001 27.27 26.2 14.03 2.49 11 1.86 496 4,464 -- -- --

2000 19.31 17.89 22.83 -3.02 12 1.35 369 3,502 -- -- --

Cramer Rosenthal McGlynn, LLC (herein after referred to as CRM) claims compliance with the Global Investment Performance Standards(GIPS®) and has prepared and presented this report in compliance with the GIPS standards. CRM has been independently verified for theperiods January 1, 1989 through December 31, 2011. Verification assesses whether (1) the firm has complied with all the compositeconstruction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculateand present performance in compliance with the GIPS standards. The Small Cap Value Taxable composite has been examined for the periodssince January 1, 1998 through December 31, 2011. The verification and performance examination reports are available upon request.Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.

Notes:1. Cramer Rosenthal McGlynn, Inc. was founded in 1973 and serves pension plans, endowments, foundations, and other institutional andindividual clients. On January 2, 1998, Cramer Rosenthal McGlynn, Inc. consummated various transactions with its affiliates and WTInvestments, Inc. and formed a new entity, Cramer Rosenthal McGlynn, LLC (the Company). The Company is registered as an investmentadvisor under the Investment Advisers Act of 1940. The Company’s mission is to manage assets for maximum return consistent with clientobjectives and risk parameters.2. Performance results are based on all fully discretionary and fee paying accounts under CRM management in the Small Cap Value TaxableComposite, including those accounts no longer with the firm.3. All results are calculated on a time-weighted basis, weighted for the size of the account.4. Valuations and returns are computed and stated in U.S. Dollars, are dollar-weighted and reflect the reinvestment of all dividends andother earnings into the respective portfolios. Performance is calculated monthly, and the gross performance results for each portfolio arepresented before management fees but after all trading commissions. The netperformance results are presented after all fees and expenses except for custody fees (i.e. all trading commissions and actual managementfees). The following is the schedule of management fees: 1.00% on all assets.

5. Internal dispersion is calculated using the equal weighted standard deviations of all portfolios included in the composite for the entireyear.6. A complete list of all firm composites, including annual returns, size and number of accounts, is available upon request.7. The Small Cap Value strategy is designed to capture investment returns in a concentrated market capitalization range of stocks, fromapproximately $100 million to $1.5 billion.8. This composite was created on January 1, 1996.9. The benchmarks are the Russell 2000 Value Index primary and Russell 2000 Index secondary. The Russell 2000® Value Indexmeasures the performance of companies in the Russell 2000® Index with lower price-to-book ratiosand lower forecasted growth values. The largest, weighted average, and weighted median market capitalization's of theRussell 2000® Value Index are $3.70 billion, $1.09 billion, and $950 million, respectively. The Russell 2000® Indexmeasures the performance of the 2,000 smallest companies in the Russell 3000® Index, with the largest, weightedaverage, and weighted median market capitalization being $3.70 billion, $1.24 billion, and $1.11 billion, respectively. Acomplete product fee schedule is listed in the appendix.10. The three-year annualized ex-post standard deviation is not presentedprior to 2011 as it is not required.

It should not be assumed that recommendations made in the future will be profitable or will equal the performance shown in thisanalysis.

CRM Small Cap Value Taxable Composite


Organization Philosophy & Process Strategy Summary Appendix 27

Risk and Return StatisticsDecember 31, 2012

Active Share

As of December 31, 2012

1 YearAverage

3 Year Average

5 YearAverage

CRM Small Cap Value vs. Russell 2000 Value Index 93 95 95

Five Years

January 2007 - December 2012Annualized Excess Returns

TrackingError

Information Ratio

SharpeRatio Beta

AnnualizedReturn

Annualized Standard Deviation

Annualized Alpha

CRM Small Cap Value 0.43 6.60 0.06 0.15 0.91 3.97 23.33 0.66

Russell 2000 Value Index - - - 0.13 1.00 3.55 24.60 -

Source: FactSet Research SystemsPlease see the reverse page for statistic definitions.


Definitions

Annualized Excess Return The calculated returns in excess of a benchmark.Tracking Error A measure of the amount of active risk that is being taken by a manager.Information Ratio A measurement of the value added per unit of active risk over an index.Sharpe Ratio A measurement of efficiency utilizing the relationship between annualized risk-free return and standard deviation.Beta The measure of the portfolio's volatility in reference to the benchmark.Annualized Return The geometric mean of the product's returns with respect to one year.Annualized Standard Deviation A measure of the average deviations of a return series from its mean.Annualized Alpha A measure of the incremental return of a product when the market is stationary.Active Share A measure of the percentage of the portfolio that differs from its benchmark.



Intermec, The GEO Group, Kforce, MRC Global and Interface were the top contributors to performance. Sharesof Intermec increased by over 24% on news that the company was acquired by Honeywell International in anall cash transaction during the quarter. Private prison operator, The GEO Group continued with thenecessary internal reorganization efforts to convert from a C-Corp to a Real Estate Investment trust (REIT).We believe that given the company’s strong cash flow characteristics, a healthy dividend upside remains inGEO shares once the REIT conversion is completed. Kforce is benefiting from a mix shift to faster growthtechnology and finance/accounting staffing which should continue to boost margins. The company declaredand paid a $1 per share dividend which was material to a stock then trading at approximately $13 pershare. MRC Global, a new purchase during the quarter, is a distributor of energy products for upstream,midstream and downstream applications. During the market downturn, while still privately held, thecompany embarked on a strategy to expand its global footprint and downsize its lower margin pipedistribution businesses. These efforts are bearing fruit in the form of rising margins and stronger growth.Interface is starting to see the benefit of cost cutting initiatives that were put in place early last year. Inaddition, order trends have strengthened and, combined with a leaner cost structure, should result insignificant profit growth in the upcoming year. We continue to like the company’s overall positioning in thesecularly advantaged modular carpet market and see further growth opportunities in emerging markets.

The top detractors were The Children’s Place Retail Stores, Monster Worldwide, Actuate Corporation,Quantum Corporation and Buckeye Technologies. The Children’s Place Retail Stores lowered annualguidance due to Hurricane Sandy disruptions and an increased promotional environment. We sold theremainder of our position as we found more compelling opportunities in which to invest. Broad basedmacroeconomic weakness pressured the results at Monster Worldwide. The company announced asignificant restructuring program to increase profitability and continues to pursue strategic alternatives toenhance shareholder value. Shares of Actuate Corporation reported disappointing third quarter results. Ourinvestment thesis was based on the company’s new open source analytic software products. We expecteddemand to remain stable for the next few years, however, it became evident during the third quarter thatrevenue from its legacy products was starting to decline. Consequently, we exited the position during thefourth quarter as our investment thesis changed. Quantum Corporation conducted a dilutive convertiblenote offering. While it was well capitalized prior to the offering, the company chose to raise additionalcapital in order dispel any myths propagated by larger competitors about its long-term viability. Afterreporting disappointing second quarter results, the third quarter was better than expected and supportedour investment thesis. Quantum continues to transition from providing legacy tape drive systems toproviding a broader portfolio of storage hardware and software. Buckeye Technologies provideddisappointing guidance for the December quarter. Issues highlighted on the fiscal Q1 earnings call includedsoftness in certain end markets and volume disruption due to a plant closure. We believe these headwindsare temporary in nature and the market is overlooking earnings improvement from Buckeye’s conversion tomore specialty pulp production in early 2013 as well as the future operational savings from the Delta plantclosure.

In addition to MRC Global, we initiated new positions in Regis Corporation, Fulton Financial Corporation,Selective Insurance Group and Brunswick Corporation. After years of weak operating results, RegisCorporation remains neglected despite recent significant change in both management and operatingstructure. We believe the new management team can unlock value with a focus on customer service andunit profitability. In addition, the company recently monetized two non-core assets which has strengthenedthe balance sheet and set up a compelling return of capital strategy for shareholders. Fulton Financial is abank with $22 billion of assets located in eastern Pennsylvania. We expect improved credit quality, loangrowth and their recently announced stock buyback to drive earnings growth. We initiated a position inSelective Insurance Group as the company’s ROE should expand as a result of improved property casualtyinsurance pricing coupled with ongoing claims and expense management initiatives. We also believed themarket concerns related to the company’s potential loss exposure from Hurricane Sandy were overblown andprovided a good entry point on the stock. Finally, the company’s strong agency distribution and underwritingfranchise could attract M&A interest from larger companies looking to expand in the business. Brunswickowns Mercury, the market leading marine engine company, which has reduced operating costs and investedbehind numerous new products. It is a very profitable business, but its strength has been camouflaged bylosses at their boat manufacturing divisions. Through aggressive cost cutting, we expect the boatbusinesses to be profitable in 2013 and for the combined marine businesses to enjoy many years of growthbehind favorable demographics and renewed interest in boating as a leisure time activity.

In addition to The Children’s Place, we sold our position in Seacor Holdings in order to reinvest the proceedsin better risk versus reward opportunities. We exited our position in Convergys Corporation during thequarter as warranted by our Investment Case. We also sold our shares in Alterra Capital Holdings andRobbins & Myers on M&A announcements during the quarter.

Strategy Commentary4th Quarter of 2012



Market Commentary4th Quarter of 2012

30

Over the course of the past three quarters, we have expressed a concern that the pending fiscal cliff wouldcause an economic slowdown. Investors and business leaders do not like uncertainty. At the same time, wewere anxious to get beyond the cliff as we believed it would rejuvenate business/consumer/investorconfidence, reignite economic growth and provide a great backdrop for the equity markets. During thosebrief periods of market trepidation, we sought to take advantage and invested in a variety of transformingcompanies, but mostly those which would benefit from an economic re-acceleration. As of the first week ofthe new year, we now know that the fiscal cliff saga is at least a two act drama. Although the legislativeprocess was probably not what the founders envisioned, the market breathed a big sigh of relief with thecompromise on taxes. We now await the second act which will attempt to replace the automatic sequestercuts with other spending reductions and entitlement reforms. The debt ceiling provides political leverage,but also greater financial risk in the event that this second act does not raise the debt ceiling in a timelyfashion and fails to address the continuing fiscal imbalances.

Based upon recent history, we are unlikely to see any movement towards bipartisanship before the end ofFebruary. In the meantime, the focus will return mostly to company fundamentals and other factors such asdevelopments in the Eurozone, China, Iran and other parts of the Mideast. Earnings will once again providesome differentiation between those companies which are creating shareholder value and those who are not.We have been fortunate over the past few years to identify a number of companies which are undergoingtransformational change. In most cases, astute management teams have undertaken a combination ofprudent cost reduction, reinvestment in growth verticals and sound capital allocation. All of theseinitiatives reduce risk in an uncertain environment, but keep the company positioned to benefit from anyimprovement in economic conditions. Examples include longer term holdings such as Tyco, FMC, Airgas,and Stanley Black & Decker and newer positions such as Harley Davidson, Eaton and Pentair. Beyond thesegeneral tenets of our investment philosophy, we continue to find opportunities in attractive themes such asenergy infrastructure, clean energy and energy efficiency. When trends become accepted as secular, oneoften sees consolidation activity. We experienced three such examples this past year as our holdings inthree energy related companies, Robbins & Myers, Thomas & Betts and Cooper Industries, were all acquiredby strategic buyers.

We noted last quarter that merger & acquisition activity, one measure of business confidence, was down15-20% through September. We would not have expected it to improve going into the fiscal cliffuncertainty. However, the fourth quarter was up 52% sequentially and 37% year over year according toDealogic which brought 2012 to $2.6 trillion or approximately flat with 2011. Many of these deals werecross border/transnational, a trend that is likely to accelerate. These amazing results, somewhat circularly,inspire confidence and highlight the pent up M&A activity that will most certainly be more robust post acttwo of the fiscal cliff. The low growth environment, ample liquidity and negligible cost of funding are apowerful combination in fueling M&A and other value enhancing steps such as stockbuybacks/recapitalizations.

We remain confident that the investment climate will continue to improve post resolving the current fiscalconcerns. Valuations are clearly higher than one year ago as market returns exceeded earnings growth, butmultiples remain subdued relative to interest rates. Any reasonable re-acceleration in earnings growth willlikely be paired with yet higher multiples which could produce returns similar to 2012 for the next couple ofyears or until such time as monetary policy becomes less accommodative. We look to take advantage of anytemporary dislocations that may develop in the coming weeks/months to add to core holdings for life afteract two.



Investing With Clarity for Over Three DecadesHistory of the Firm

31

Cramer Rosenthal McGlynn is a leading value manager. We believe our track record, spanning almost 40 years, is testament to our success in serving clients and providing strong investment performance. Clients benefit from consistent application of one cohesive philosophy and process, implemented by a team with diverse experience in appraising the intrinsic value of companies.

CRM’s founding partners, Gerry Cramer, Ed Rosenthal and Ron McGlynn, met in the 1970s. Sharing a fascination for investing in changing companies neglected by other investors, they founded CRM in 1973 as a value investment specialist. To implement their vision, they created an investment process designed to capitalize on the returns and minimize the risks inherent in changing companies.

After the painful market decline of 1973-1974, many investors lost interest in stocks, creating a climate of neglect. The challenges of the early 1970s led the founders of our firm to formulate the rationale for investing we follow today. They saw firsthand the opportunities inherent in companies experiencing change while operating in an environment of low investor expectations. While inspired by personal experience, the validity of CRM’s strategy is supported by numerous academic studies dating from the genesis of the modern stock market to the present.

By the early 1980s, the success of CRM’s investment process led to several positive developments. Our track record attracted institutional clients, helping our firm to grow assets under management and build resources. Jay Abramson joined the firm, and over time expanded our team of talented research analysts. The advent of institutional investors and a new generation of talent in turn brought improvements to the investment process. Specifically, we developed more in-depth approaches to due diligence and formalized valuation techniques.

What began as a collective gleam in three investors’ eyes has turned into an investment company with a 39-year track record based on a proven investment process. While we have grown as an organization, we nonetheless remain true to our entrepreneurial origins, evident in the shared excitement with which analysts team up to pursue a new opportunity.



Capitalizing on Change and NeglectInvestment Philosophy

32

In the investment world as in everyday human life, change often unlocks hidden potential. Yet most investors sit on the sidelines while a transformation is underway, waiting to see evidence of positive results. This wait-and-see attitude is fertile ground for an investment company structured to capitalize on change through intensive research.

Our track record, spanning almost 40 years, is testament to our success in serving clients and providing strong investment performance. Clients benefit from consistent application of one cohesive philosophy and process, implemented by a team with diverse experience in appraising the intrinsic value of companies. The intellectual coherence of our investment philosophy is a genuine strength. Companies we buy and hold are typically characterized by three attributes: change, neglect and valuation.

Change The financial markets are rich with change. Every day the markets present investors with mergers, divestitures, restructurings, new management teams or new products and expanded markets.

NeglectEspecially in its early stages, change tends to be greeted with uncertainty, expressed as investor neglect — manifested through behavioral finance, low analytical coverage, negative to neutral stock ratings and low institutional ownership.

ValuationWhen change meets neglect, the intrinsic value of a company may exceed the current stock price. At the intersection of change and neglect with attractive valuation, CRM finds the potential for substantial outperformance.

The conviction to invest before the rewards of change are realized requires an investment process grounded in intensive original research.



Building Investment ConvictionInvestment Process

33

Identify changeCRM seeks to identify change at an early stage that is material to the operations of a publicly traded company, capitalizing on the opportunity to invest while others wait for certainty. Based on the experience of our research team, we excel at “connecting the dots”, - that is, we identify many situations where positive change in one company may lead to a broader set of investment opportunities. A divestiture in one industry, for example, may lead to a new opportunity in another industry. Or a supplier of a company turns out to be an attractive investment in its own right.

Appraise the businessOnce potential positive change is identified, we appraise the business by producing a financial model based principally upon projected cash flow. We evaluate the business in the context of what the market is willing to pay for comparable companies, and also what a strategic buyer would pay for the entire company. CRM further measures institutional ownership and tracks the degree of recognition by investors and sell-side analysts.

Conduct researchWe visit companies on site and cross reference management claims about future profitability through an extensive network of research contacts built over decades. We amass information from numerous sources, looking for evidence of a catalyst or critical variable that will bring a stock out of the shadows into the mainstream of investor enthusiasm. Our goal at this stage of the investment process is to build a solid investment case, ensuring that future buy and sell decisions are driven by clear milestones as opposed to human emotion.

Take actionIntensive due diligence enables us to move swiftly in situations where change and neglect coincide to create attractive valuations. Every CRM portfolio reflects a series of separate, well-reasoned decisions to invest in individual companies. We are cognizant of benchmark structure, but this awareness does not drive portfolio construction. Our investments seek to capture underlying fundamental change at the company level—hinging not on variables that can spiral out of control, such as commodity prices, interest rates or geopolitical events, but on developments that company management can control and execute. This strategy allows us to define clear milestones, providing guidance in sell discipline implementation.

SellClearly defined investment milestones — an earnings target met or missed, a new product unveiling precisely when anticipated or still languishing on the drawing board long past the deadline — make it possible either to sell without emotion or take advantage of price declines to increase holdings. CRM’s entire process is focused not only on building the investment case but also on understanding how the case might deteriorate. Virtually on the day we identify a new idea, we start thinking about our exit strategy.



Biographies of Investment ProfessionalsExecutives

34

Jay B. Abramson – Chief Executive OfficerJay has been with CRM since 1985. As Chief Investment Officer, he maintains overall responsibility for the firm’s investment team. Prior to CRM, Jay earned his CPA. He received a BSE from the University of Pennsylvania Wharton School and a JD from the University of Pennsylvania Law School. Jay is a Trustee and Chairman of the Investment Committee for Montefiore Medical Center.

Christopher C. Barnett – PresidentChris is a member of the Executive Committee, responsible for the management and strategic direction of CRM. He is also responsible for all aspects of the firm’s global marketing and institutional client efforts. Chris joined the firm in 1997, was named Director of Marketing in 2002 and Executive Vice President in 2007. Prior to CRM, he worked at Ark Asset Management as an Associate in the fixed income department. Chris earned a BA in history from the University of Richmond.

Carlos A. Leal, CPA – Executive Vice President, Chief Financial OfficerCarlos joined the firm in 1999. Prior to CRM, Carlos was an Audit Senior Manager within the Financial Service Group of Ernst & Young LLP. He received a BBA from Iona College.

Ronald H. McGlynn – Chairman Ron is one of the cofounders of CRM and his primary role is Chairman at the firm. Before CRM, Ron was a portfolio manager and an investment analyst for Chase Manhattan Bank, Standard & Poor’s InterCapital and Oppenheimer & Company. He earned a BA from Williams College and an MBA from Columbia University Business School. Ron serves as chairman of the Investment Committee on the Board of Trustees at Winthrop University Hospital.

Steven A. Yadegari, Esq. – Executive Vice President, General CounselSteve is the firm’s CCO. He also serves as the General Counsel and is an Executive Vice President for the firm. In addition, Steve is a member of the Executive Management Committee. He joined the firm in August of 2005. Prior to CRM, he worked at K & L Gates and Proskauer Rose. Steve also has served as Senior Counsel at the U.S. Securities and Exchange Commission. He is a past President of the Association for Conflict Resolution of Greater New York and is an adjunct professor at the Benjamin N. Cardozo School of Law and at the NYU School of Continuing Education and Professional Studies. Steve has received a BA from Brandeis University and earned his JD from the Cardozo School of Law.



Biographies of Investment ProfessionalsResearch & Trading

35

Jay B. Abramson – Chief Executive OfficerJay has been with CRM since 1985. As Chief Investment Officer, he maintains overall responsibility for the firm’s investment team. Prior to CRM, Jay earned his CPA. He received a BSE from The Wharton School of the University of Pennsylvania and a JD from the University of Pennsylvania Law School. Jay is a Trustee and Chairman of the Investment Committee for Montefiore Medical Center.

Adriano F. Almeida, CFAAdriano joined the firm in 2010 and his primary role is research analyst in CRM’s investment group. Previously, he was a portfolio manager with Louis Dreyfus Highbridge Energy and Dalton, Greiner, Hartman, Maher & Co. Adriano has additional experience as a senior managing analyst with The Dreyfus Corporation and as the Head of Research and Applications at Physical Acoustics Corporation. He received a MS from Embry-Riddle Aeronautical University and an MBA from Columbia Business School.

Andrey A. Belov , Ph.D. - Vice President Andrey joined CRM in 2009 and his primary role is research analyst in CRM’s investment group focusing on international equities. Previously, he was a senior research analyst responsible for global technology investments at Bernstein Global Value Equities, a unit of AllianceBernstein. Prior to Bernstein, Andrey was a management consultant at McKinsey & Company, where he led projects in the high technology, telecommunications and aerospace industries. He earned a MS from Moscow Institute of Physics and Technology and a PhD from Princeton University.

Ian BitnerIan joined the firm in 2010 and his primary role is research analyst in CRM’s investment group. Previously, he was a senior analyst at BroadArch Capital; and prior to BroadArch, Ian covered financial services as an investment banking analyst at Banc of America Securities. He earned a BS from Indiana University's Kelley School of Business.

Michael J. Caputo – Senior Vice PresidentMike joined CRM in 2002 and he currently serves as a portfolio manager and senior research analyst in our investment group. Prior to CRM, Mike was a vice president in Corporate Finance at Morgan Stanley. He earned a BA from the University of Notre Dame and an MBA from The Wharton School of the University of Pennsylvania.

Sackett S. CookSackett joined the firm in 2010 and his primary role is research analyst in CRM’s investment group focusing on international equities. Previously, he was a senior analyst and portfolio manager with Diamondback Capital and MENEMSHA Capital Group, respectively. He has additional experience as a global financial analyst with Execution Ltd., UBS Warburg and Fox-Pitt, Kelton. He received a BA from Tulane University.

Thomas P. Cook – Vice PresidentTom joined CRM in 1996 and he is a trader for CRM’s investment team. Previously, he was employed as a trader at Gabelli Asset Management. Tom attended Fordham University where he earned a CBA BS in accounting. He is a member of St. Francis Prep Alumni Board of Directors.

Thomas DeBourcy, CFATom joined the firm in 2007 and his primary role is a research analyst in CRM’s investment group. Previously, he was an analyst at Deutsche Bank Securities in the health care group. Tom received a BS from The Wharton School of the University of Pennsylvania.




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Brittain Anderson EzzesBrittain joined the firm in 2010 and her primary role is researched analyst in CRM’s investment group. Previously, she was an analyst and Managing Director with MissionPoint Capital Partners and Iridian Asset Management, respectively. Brittain has additional experiences as an associate in the merchant banking fund with SG Capital Partners and as a business analyst with Price Waterhouse, LLP. She received a BA from Brown University.

Bernard C. FrojmovichBernie joined the firm in 2009 and his primary role is research analyst in CRM’s investment group. Previously, he was a vice president and investor on the U.S. Small and Mid-Cap Value Equity Team at BlackRock Investment Management. Prior to BlackRock, Bernie covered financial services as an investment analyst at Morgan Stanley Investment Management and a credit analyst at JPMorgan Chase. He earned a BS from CUNY, Brooklyn College and an MBA from New York University's Leonard N. Stern School of Business.

Scott L. Geller – Senior Vice PresidentScott joined CRM in 1993 and he is Director of Trading. Before CRM, Scott was an assistant vice president on the trading desk at Rothschild, Inc. Scott earned a BBA from Baruch College of the City University of New York. Scott is a member of the National Organization of Investment Professionals.

Brian M. Harvey, CFA – Vice PresidentBrian joined the firm in 2005 and he currently serves as a portfolio manager and a senior research analyst in CRM's investment group. Prior to CRM, he was an equity research analyst at Fox-Pitt, Kelton. Brian also spent four years as accountant in the financial services audit practice at KPMG LLP and earned his CPA designation. He received a BS from Fairfield University.

Milu E. Komer – Senior Vice President Milu joined CRM in 2008 and she serves as a portfolio manager and senior research analyst in the firm’s investment group, focusing on the international and global strategies. Prior to joining the firm, Milu was Vice President at Neuberger Berman Management Inc. and Neuberger Berman, LLC where she served as an analyst, associate portfolio manager and portfolio manager since 2001. In addition, she previously served as an associate in the J.P. Morgan Securities Debt Capital Markets Group and as a Foreign Exchange Trader in the Emerging Markets Group at Citibank. Milu began her career as a Financial Analyst in the International Equity Research and Asset Management Divisions of Goldman Sachs’ London office. She received a BA from Wellesley College and an MBA from The Wharton School of the University of Pennsylvania.

Robert Maina – Vice President Rob joined the firm in 2005 and he currently serves as a portfolio manager and a senior research analyst in CRM’s investment group. Previously, Rob worked at Copper Beech Capital Management, a long/short fund focusing on the technology sector, and also CIBC World Markets, Donaldson, Lufkin & Jenrette and Arthur Andersen & Company LLP. He received a BS from Fairfield University's School of Business.

Ronald H. McGlynn – ChairmanRon is one of the cofounders of CRM and his primary role is Chairman at the firm. Before CRM, Ron was a portfolio manager and an investment analyst for Chase Manhattan Bank, Standard & Poor's InterCapital and Oppenheimer & Company. He earned a BA from Williams College and an MBA from Columbia University Business School. Ron serves as chairman of the Investment Committee on the Board of Directors at Winthrop University Hospital.




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Mimi B. MorrisMimi Morris joined the firm in 2010 and her primary role is a research analyst in CRM’s investment group. Prior to CRM, Mimi was a Director at Telsey Advisory Group where she was an equity analyst and consultant. She has additional financial experience from Merrill Lynch, Columbia House Company and Donaldson, Lufkin, and Jenrette. She received a BA from Williams College and an MBA from Columbia Business School.

Thaddeus D. Pollock – Vice PresidentThad joined the firm in 2003 and he is a portfolio manager and senior research analyst in CRM's investment group. Prior to CRM, he spent three years as an analyst in Corporate Finance at Lehman Brothers. Thad received a BS from Yale University.

Jeffrey B. Reich, MD – Vice PresidentJeff joined CRM in 2007 and he is a portfolio manager and senior research analyst in CRM’s investment group. Prior to CRM, Jeff was a portfolio manager/senior analyst and principal at Merlin Bio Med Group. He earned his BA from Binghamton University and his MD from Weill Medical College of Cornell University, where he was also an Assistant Clinical Professor in the Department of Neurology and Neuroscience for 10 years.

Robert ‘Chip’ L. Rewey, III, CFA – Senior Vice President Chip joined CRM in 2003 and he is a senior portfolio manager and senior research analyst on our investment team. Before joining CRM, he was a portfolio manager/senior analyst at Sloate, Weisman, Murray & Co., Inc., a boutique money management firm. He received a BA from the Carroll School of Management, Boston College and an MBA from Fuqua School of Business at Duke University.

Jonathan Ruch - Vice PresidentJon joined the firm in 2005 and he is a portfolio manager and senior research analyst in CRM's investment group. Prior to CRM, he spent two years with Morgan Stanley's Venture Capital group and two years as an analyst in the Corporate Finance division at Morgan Stanley. Jon earned a BA in economics from Cornell University.

Andrew Singer, CFAAndrew joined the firm in 2009 and his primary role is research analyst in CRM’s investment group. Previously, he was an equity analyst at BlackRock; and prior to BlackRock, Andrew was an equity analyst at Evergreen Investments and a senior associate within equity research at Credit Suisse First Boston. He earned a BA from Tufts University and an MBA from F.W. Olin Graduate School of Business at Babson College.

Martin Teng, CFAMartin joined the firm in 2006 and his primary role is a research analyst in CRM’s investment group. Prior to CRM, he was a research analyst at SG Cowen and Needham & Company. Martin received a BS and MS from the University of Illinois and an MBA from MIT’s Sloan School of Management.



Biographies of Investment ProfessionalsMarketing & Client Service

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Christopher C. Barnett – PresidentChris is a member of the Executive Committee, responsible for the management and strategic direction of CRM. He is also responsible for all aspects of the firm’s global marketing and institutional client efforts. Chris joined the firm in 1997, was named Director of Marketing in 2002 and Executive Vice President in 2007. Prior to CRM, he worked at Ark Asset Management as an Associate in the fixed income department. Chris earned a BA in history from the University of Richmond.

James D. Brown – Assistant Vice President James joined CRM in 2008. His primary role at CRM is in marketing mutual funds and separately managed accounts through Broker-Dealers. For the past thirteen years, Jimmy worked in marketing at Scotsman Capital Management, Lazard Asset Management and J.M. Hartwell. He received a BA in Human and Organizational Development from Vanderbilt University.

Serra Sonmez, CFA – Senior Vice PresidentSerra joined CRM in 2005 and serves as Director of Client Service. Previously, Serra was a manager of Client Service at Meridian Capital Partners, Inc. Serra also worked at Advent Capital Management, LLC. She received a BBA in finance from the College of William & Mary.

Harris Swenson, CFA – Vice PresidentHarris joined the firm in 2003 and he is responsible for marketing at CRM. Prior to joining CRM, Harris worked in the commercial real estate group at Cravath, Swain & Moore, LLP. He received a BA in english from the University of North Carolina at Chapel Hill.

Addison R. West – Vice President Addison joined CRM in 2004. His primary role is focused on intermediary distribution for the firm. Prior to joining CRM, Addison worked for three years in sales and marketing at Pilgrim Baxter & Associates. He received a BA in political science from Amherst College.

Documents

Cramer Quaterly Report to Miami Pension Plan