INVESTMENT MANAGER SUMMARY MANAGEMENT ASSETS · 2/10/2016 · Equity Manager (February 10, 2016, Regular Retirement Board Meeting) INVESTMENT MANAGER SUMMARY MANAGEMENT Firm Name

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Item No. 6: Annual Presentation by Emerald Advisers, Inc. – Domestic Small-Cap Growth Equity Manager (February 10, 2016, Regular Retirement Board Meeting)

INVESTMENT MANAGER SUMMARY

MANAGEMENT Firm Name Emerald Advisers, Inc. Manager Tenure with Fund Two Months Investment Strategy/Vehicle Domestic Small-Cap Growth Equity Contract Expiration 09/30/2018

ASSETS Total Firm AUM (12/31/2015) $4.1 Billion Total Firm Assets in Strategy (12/31/2015) $3.0 Billion Total Assets Managed for WPERP (12/31/2015) RP - $115.6 Million

HP - $18.8 Million

PERFORMANCE As of 12/31/2015 1 Month 1 Year 3 Year Inception

Emerald Advisers (gross) -5.31% -- -- -5.31% Emerald Advisers (est. net) -5.36% -- -- -5.36% Russell 2000 Growth Index -4.77% -- -- -4.77% Difference (net of fees) -0.59% -- -- -0.59%

Fees Schedule 59.5 basis points on all assets

WATCH STATUS N/A

PREVIOUSLY DISCLOSED LITIGATION N/A

Information contained herein should be used for one‐on‐one presentations only and should be accompanied by this disclosure.

EmeraldAdvisers,Inc.SmallCapitalizationGrowth

Preparedfor:

DataasofDecember31,2015

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Section A: Company Overview

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Joseph E. Besecker, Chairman, President and CEO, Emerald Asset Management, Inc.Mr. Besecker is Founder, Chairman, President and CEO of Emerald Asset Management, Inc., parent company to Emerald Advisers, Inc. He has over 30 years of experience in the money management business. Mr. Besecker has led Emerald from a start‐up investment/research firm in 1991 to a diversified asset management firm with over $4 billion under management today, listed by Pensions & Investments as one of the largest money managers in the U.S. ranked by institutional tax‐exempt assets. From an initial three employees in 1991, Emerald and its subsidiaries have grown to more than 40 employees located in offices in King of Prussia and Pittsburgh, PA, Oceanside, CA, Cleveland, OH, and its corporate headquarters in Leola, PA. Mr. Besecker has been a key investor and provided expertise to a number of early‐stage venture capital projects and has been recognized for his achievements in the venture capital community with nominations as a finalist of both the Ernst & Young Entrepreneur of the Year Award and Enterprise Entrepreneur of the Year Award. Mr. Besecker appears frequently in the national financial media, including The Wall Street Journal, The New York Times and USA Today and has been a regular contributor to CNBC, Fox Business News and Bloomberg. He has received national recognition for his work as an investment analyst, including being named as a Home Run Hitter by Institutional Investor magazine and lecturing at Oxford University. Mr. Besecker strongly believes in giving back to the community and has served as a National Trustee and Past President of the Leukemia & Lymphoma Society and as a board member of the Boys and Girls Club (Lancaster, PA). Under his leadership Emerald was named the Corporate Citizen of the Year in 2005 by the Central Pennsylvania Business Journal. Mr. Besecker and his wife Martha have four children: Jeb, John, Liam and Lily.

Kenneth G. Mertz II, CFA, President, Chief Investment Officer, Emerald Advisers, Inc.Mr. Mertz is Chief Investment Officer and President of Emerald Advisers, Inc. and part of the Small Cap Portfolio Management team; past Trustee and Vice President of the Emerald Mutual Funds; Chief Investment Officer, PA State Employees’ Retirement System (1985‐1992); Member, CFA Institute; past Member, Pennsylvania State University Research Foundation; past Trustee, Evangelical Lutheran Church in America Board of Pensions; past Trustee, Pennsylvania State University Endowment Council (1998‐2004); and past Chair, President, & Director of Central Pennsylvania Investment Managers. He is currently the Chairman of Diakon, a social ministries continuing care provider, and the past Chairman of the Diakon Lutheran Fund of its endowment arm. Mr. Mertz has been quoted in The Wall Street Journal and in USA Today, and has served as speaker at various investment seminars and programs across the country. He has been a guest on CNBC’s Mutual Fund Investor, and has been interviewed several times on CNBC and Bloomberg TV. Mr. Mertz graduated from Millersville University with a BA in Economics.

Presenter Biographies

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Founded in 1991, Emerald is a diversified investment management firm that specializes in actively managed investment portfolios, withan emphasis on fundamental, hands‐on research analysis. Corporate offices are located in Leola, Pennsylvania with satellite offices at King of Prussia and West Conshohocken in suburban Philadelphia, and Pittsburgh, Pennsylvania; and Cleveland, Ohio. Emerald’s west coast regional headquarters are located in Oceanside, California.

Emerald’s mission is to provide high quality professional management with a primary emphasis on risk control to public and non‐public institutional and retail clients by adhering to a strict culture of compliance and high ethical standards. We are dedicated to the achievement of consistent client investment success without engaging high risk.

We believe our equity and income‐producing products provide investors with a convenient way to benefit from the knowledge and insights of an experienced investment team. In addition, we believe clients are advantaged by our low turnover in investment staff which continues to enhance our collective experience and delivers consistent risk‐adjusted performance.

Corporate Background

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Mandate Small Capitalization Growth

Fund Structure Separate Account

Small Cap Growth Asset Base (SA) $1,456 mm

Small Cap Growth Mandate (All Clients) $2,986 mm

Total Assets Under Management $4,085 mm

Small Cap GrowthPortfolio Management Team

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Kenneth G. Mertz II, CFAChief Investment Officer/Portfolio Manager

Stacey L. SearsPortfolio Manager / Analyst

Joseph W. GarnerPortfolio Manager /Director of Research

Investment Experience

37 Yrs. 21 Yrs. 21 Yrs.

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Team EmeraldManagers & Analysts

Stephen AmsterdamAssociate Portfolio ManagerSemiconductors / TechnologyGaming / 12 Yrs.

Derek Fisher Technology / ProfessionalServices / 18 Yrs.

Joseph A. Besecker, MD, FAAPBiotechnology / Emerging PharmaMedical Devices / 14 Yrs.

Alfred Cooke, MD, FASCMedical Devices / Diagnostics Surgical Products / 13 Yrs.

Nishit Trivedi, PhD, MBBS, MBAMolecular Diagnostics / HospitalsMedical Devices / 9 Yrs.

Scott Blumenthal, MBABasic Materials / IndustrialsCapital Goods / Engineering Defense / Aerospace Construction / 11 Yrs.

Terry M. Smith, PhD, MBABiotechnology / Drugs & Pharma.Managed Care / 8 Yrs.

Steven E. Russell, Esq., MBAPortfolio ManagerFinancial Services / TechnologyCommunications / 15 Yrs.

Andrew RohrerAgriculture / AutomotiveTransportation / 7 Yrs.

Kenneth G. Mertz, CFAChief Investment OfficerPortfolio ManagerFinancial Services / 23 Yrs.

Stacey L. Sears, MBAPortfolio ManagerConsumer / 23 Yrs.

Joseph W. Garner, MBADirector of ResearchPortfolio ManagerConsumer Goods / Technology

‐ Transportation / 21 Yrs.

David Volpe, CFA, MADeputy Chief Investment Officer Portfolio ManagerEnergy / 16 Yrs.

Nathan R. Jones, PhD, MBATechnology / 2 Yrs.

Coverage & Firm Tenure

14 Professionals

14 Yrs. Avg. Firm Tenure&

23 Yrs. Avg. Industry Experience

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5Information contained herein should be used for one‐on‐one presentations only and should be accompanied by this disclosure.

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Corporate Profile


Parent Company: Emerald Asset Management, Inc.

⦁ Incorporated November, 1991 ⦁ S‐Corporation / 100% ESOP‐Owned

⦁ $4.2 Billion Firm‐Wide Assets Under Management as of December 31, 2015

⦁ Driven by In‐depth Fundamental, Bottom‐up Research

Affiliated Advisers:EmStone Advisers LLC

Traditional and Enhanced Fixed‐Income Portfolios (Intermediate Gov’t Credit, Core Aggregate, Low Duration, Liquidity Reserve)

Emerald Direct Lending Advisers LLC

Reg D Limited Partnership Funds

Emerald Managed Yield Plus Collective Investment Fund

Partial Client List

PublicCommonwealth of Pa. Contra Costa County (CA)State of Illinois Teachers’18 Pennsylvania Counties

CorporateIndependence Blue CrossCarpenter TechnologyShands Healthcare

EndowmentsLower Susquehanna Synod of the ELCAShippensburg University Foundation

Taft‐HartleyUFCW Tri‐State Pension FundMARTA (Metropolitan Atlanta

Rapid Transit Authority)

Sub‐Advisory RelationshipsPrudential Investments

It is not known whether the clients approve or disapprove of Emerald services provided through its subsidiaries. Emerald did notuse performance‐based data to determine which clients are included on this list. Clients were selected based upon their generalname recognition and as a representative sampling of the types of accounts managed. Performance‐based data was not used todetermine which clients are included on this list. Clients were selected based on a sampling of the types of accounts managed.

Emerald Asset Management

Emerald Advisers

Small Cap ValueMid Cap GrowthAll Cap Growth Small Cap Growth1

PA Small Cap Core11Closed to new investments.

Emerald MutualFund Advisers Trust

Mutual Funds Emerald Growth Fund1

Emerald Small Cap Value FundEmerald Insights FundEmerald Banking & Finance Fund

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Contact Us

Contacting Us:

3175 Oregon Pike, Leola, PA 17540

Phone: 800.722.4123

Website: www.teamemerald.com

Your Team Emerald Contacts:

Sales / Client Relationship

John Thompson, Senior Vice President

[email protected]

Client Services / Operational Support

Serena Tenant, Asst. Vice President

[email protected]

Manager

Kenneth G. Mertz II, CFA, President & CIO

[email protected]

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Section B: Investment Process & Discipline

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Research‐Driven Active Portfolio Management

• Top line & bottom line growth drives stock values higher.

• Seek to maximize returns and minimize risks by capitalizing on the inefficiencies inherent insmall‐cap markets. Over 380 of the Russell 2000 companies are covered by two or fewer sell‐side brokerage firms,

as compiled by FactSet.

• Dedicated to intense fundamental, bottom‐up research designed to identify unrecognized,under‐researched companies.

• In‐house fundamental investment research is the key to outperforming benchmark marketindices.

• Industry & scientific expertise across all sectors.

Investment Philosophy

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Information contained herein should be used for one‐on‐one presentations only and should be accompanied by this disclosure.10

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Research‐Driven Active Portfolio Management

Our philosophy has been rooted in the belief that fundamental, bottom‐up research is the key in gaining exceptional understanding of the companies we choose to include in our investment portfolios. Since the beginning, we have persisted with our fundamental investment approach utilizing a 10‐step research process generating approximately 2,000 company meetings a year, targeting the best perceived early‐stage growth companies and quality value companies. On a stock by stock basis, we look where we believe earnings will be regardless of market cycles. This hands‐on approach provides us with unique insights into industry trends as well as company specific trends that we believe gives us an advantage over managers who rely solely on traditional, top‐down research techniques. As a result Emerald portfolios bear little resemblance to the broad market. Our research process, unique blend of independent thinking, strict adherence to style and process, seasoned expertise in selecting stocks, and exploitation of innovative trends, clearly differentiates us from our peers.

Investment Research Process

Emerald’s research team focuses on providing fundamental research and analysis of every investment opportunity, utilizing a proprietary process initiated in 1992.

10-Step Process

1. Review SEC Filings, Press Releases and News StoriesThe process includes monitoring relevant media sources such asindustry press, financial press and popular press.

2. Meet with ManagementConduct on‐site meetings with management across theorganization in areas such as executive management, marketing,product development, operations and finance. The EmeraldResearch Team conducts approximately 2,000 meetings per year.

3. Interview CustomersInterview customers to determine (1) the critical factors drivingtheir buy decision, (2) what competitors or alternatives wereconsidered, (3) level of satisfaction with the quality of the productor service, and (4) likelihood of generating repeat business.

4. Interview CompetitorsInterview competitors to determine their strengths andweaknesses, as well the competitors' perception of the strengthsand weaknesses of the company.

5. Interview SuppliersInterview suppliers to determine their ability to supply theproducts/services required by the company. Also, assess the extentof potential supply chain bottlenecks.

6. Interview DistributorsInterview distributors to determine potential issues and opportunitiesin the company's distribution channel such as inventory levels,demand drivers and competitive pressures.

7. Develop Financial and Valuation ModelsDevelop a financial model to analyze financial performance andestimate future cash flows, earnings and financing needs. Use avaluation model to analyze relative and absolute valuation.

8. Review Third‐Party ResearchReview published research from sell‐side analysts and industryresearch firms to compare our data points and financial estimates.Also, use third party research to assess security‐specific and industry‐specific sentiment.

9. Publish an internal research reportPublish an internal research report summarizing the company'sbusiness, competitive advantages, managementstrengths/weaknesses, growth drivers and risks, as well as statinginvestment conclusions and recommendations.

10. Communicate, Communicate, CommunicateThe entire research team meets formally twice per week andinformally on an ongoing basis with the portfolio management teamto discuss the fundamentals of all current and potential holdings.Internal discussions are held throughout the process.

Investment Research Process

10-Step Process

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Information contained herein should be used for one‐on‐one presentations only and should be accompanied by this disclosure. 11

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Trading & Monitoring Systems

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TradingEmerald Advisers employs a two‐person trading desk for all of its trade executions. The professional staff has extensive experience trading equities and working to achieve best execution. Emerald’s Head Trader brings 15 years’ experience to the team. The trading desk uses a 5‐level grading system which is employed for each and every trade executed by the desk. Each one of these grades are compiled and further reviewed by Emerald’s Best Execution Committee. Emerald believes this review process provided an in‐depth look to every trade and every executing broker utilized. This extensive grading process is used by Emerald to review trading effectiveness as well as broker approval and utilization.

Emerald uses FIX order routing through the NYFIX FIX engine. The implementation of FIX has significantly increased Emerald’s ability to monitor its trading on a real time basis. The FIX engine provides real time execution and prices, each with electronic time stamps. The FIX connections provide instant data dissemination, which has added in streamlining Emerald’s trading practices and back office functions.

Analysis/MonitoringEmerald uses the INDATA iPM portfolio accounting system. We believe the INDATA system significantly improves staff productivity, also automating trade‐related tasks through the NYFIX trading platform, greatly reducing the potential for human error.

The team utilizes the FactSet system in conjunction with the INDATA portfolio accounting system to assist in the monitoring/management of portfolio risk. The entire portfolio team is enabled to receive FactSet via desktop, laptop and e‐mail. This enables us to be real time 24/7. These tools help monitor active non‐systematic risk on the individual stock, industry and sector levels and is used in our weekly general, technology, healthcare/life sciences research meeting as well as at our daily portfolio manager meeting.


Stock Selection is a Fundamentally Driven Process

IDEA GENERATIONSTOCK SELECTION PROCESS

Universe Universe is Russell 2000 Capitalization ≤ the largest

Russell 2000 company14‐Member Team

Assigned Sector/Industry Coverage

Expertise / Tenure10‐Step Process

Fundamentally driven Bottom‐up focus Approx. 2,000 company meetings Written report generated for

every stock

Buy Criteria Competitive advantages Leadership position Strong management Growth rate exceeds peer group Differentiated growth drivers Under‐researched by the Street

Buy Decision Valuation deemed attractive

relative to defined growth prospects

Security fits within portfolio risk constraints

PORTFOLIO CONSTRUCTION

Diversified Portfolio 110 – 120 stocks Sector & industry diversification

Unequal Weighted At the stock level

‐ Position sizes range ½ ‐ 2%‐ Stock specific risk/cross‐risk/correlation

At the sector/industry level‐ Sector/industry weights are a fallout ofthe bottom‐up investment process

Ability to participate in a broader opportunity set than our peers

Risk Averse Sector: ≤ 3x R‐2000 Index (max. 45%) Industry: ≤ 15% Stock : ≤ 5% holding size

≤ 5% ownership in company

Investment Process

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Summary of Investment GuidelinesThe representative benchmark for this mandate is the Russell 2000 Growth and therefore all representative component characteristics are in line with client investment guidelines. In addition, Emerald is in agreement with performance objectives in that our process attempts to outperform the stated benchmark by 150 basis points of annualized excess return over a given market cycle.

Compliance with Investment GuidelinesEmerald Advisers, Inc. certifies that the Plan's assets have been managed in conformance with the objectives and guidelines delineated in the City of Los Angeles Water & Power Employees’ Retirement Plan Investment Policy dated 12‐20‐2014.

Investment Guidelines

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Section C: Market Overview

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Market OutlookDRIVEN BY RESEARCH4th Qtr. 2015

Performance Review

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The fourth quarter, much like the year, started with a bang and ended with a whimper as December returnsslid back into negative territory. The prospect and realization of the first rate hike since 2004, widening highyield spreads, a flattening yield curve and renewed recession fears led to the broad‐based retrenchmentduring December.

Small capitalization stocks underperformed for both the month and quarter with the Russell 2000 losing 5.02% in December but posting a gain of 3.59% for the quarter, meaningfully lagging behind the Russell 1000 which lost 1.80% in December and gained 6.50% for the quarter.

Interestingly, growth as a style continued to outperform value across capitalization sizes. Within the Russell 2000, the Russell 2000 Growth Index gained 4.32% for the quarter, outpacing the Russell 2000 Value Index which gained 2.88% for the quarter.

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Market OutlookDRIVEN BY RESEARCH4th Qtr. 2015

Performance Review

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At the sector level within the Russell 2000, the healthcare sector regained its dominance surging 9.76% in the fourth quarter, securing its position as the best performing sector for the year. Conversely, the energy sector declined another 10.60% reflecting the ongoing pressure in crude prices. All totaled, the energy sector of the Russell 2000 lost a devastating 43.33% during 2015 and not surprisingly was the worst performing sector by a wide margin. (Source: Russell Investments)

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Russell Sector R2000 Growth R2000 R2000 ValueTechnology 5.34% 5.88% 7.02%Healthcare 10.46% 9.76% 5.59%Consumer Discretionary ‐3.14% ‐2.65% ‐1.78%Consumer Staples 5.57% 4.65% 3.53%Energy ‐18.26% ‐10.60% ‐8.08%Materials & Processing 4.12% 4.47% 5.04%Producer Durables 2.59% 2.85% 3.11%Financial Services 4.56% 3.36% 3.10%Utilities 10.65% 5.99% 5.22%

Source: Russell Investments

Market Outlook

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Portfolio positioning: Overweight positions: Financial services, technology and utilities sectors Underweight positions: Consumer discretionary, consumer staples, healthcare, materials and producer durables sectors

The first day of trading of 2016 ushered in renewed concerns over a China led deceleration in global growth, risinggeopolitical tumult (Saudi Arabia and Iran), a skyrocketing CBOE VIX index and a global rout in stock prices withthe Chinese stock market leading the way down.

While concerns over global growth are not new, the renewed consternation from our perspective is less about theabsolute slowing and more about the pace, magnitude and breadth of the deceleration among the global markets.Oil prices, breaking to new lows, especially in the face of a perceived rise in geopolitical tensions, only adds fuel tothese concerns.

Domestically with the first rate hike now in the rearview mirror, the debate on how fast and how far the FederalReserve will go and whether those moves could eventually trigger another recession has already started. Thereremains a sizeable gap between the market’s predictions for rate hikes (which currently stand at most twoincreases) this year and the December FOMC “dot plot” which showed a 100 basis point median projectedincrease in the fed funds target in 2016.

The good news is that U.S. economic growth has proven quite resilient, albeit erratic on a quarterly basis in theface of an ever evolving set of headwinds. We believe 2016 has the potential to look a lot like 2015 from a growthperspective with services expanding and manufacturing continuing to stagnate, with the consumer serving as asource of potential upside.

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Market Outlook

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Given Emerald’s expectation that U.S. economic growth is likely to remain moderate and overall growth scarce, we continue to believe growth as a style is positioned to continue to outperform, as is small growth operating under the same assumption that small capitalization stocks will be able to offer greater levels of earnings growth than that of large capitalization stocks.

From a valuation perspective, both small capitalization stocks and small capitalization growth as a style remain attractive relative to both small cap value and large capitalization stocks.

According to a recently authored report by Credit Suisse US Equity Strategist, Lori Calvasina, small capitalization growth stocks remain both attractive relative to “value” on relative P/E basis, and attractive as compared to large caps with Credit Suisse’s propriety multi‐factor Russell 2000/S&P 500 valuation composite at ‐0.90 standard deviations below its 30 year average, the most compelling level since the Tech bubble.

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Market Outlook

Market Outlook

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Innovation is still alive and well in the U.S. Spending on research and development has been stable and growing. As a matter of fact, according to a November 24, 2015 research report from Savita Subramanian of Bank of America Merrill Lynch, U.S. stocks offer a better opportunity to gain exposure to innovation and its resulting growth than global equities. In fact, according to that same report, the U.S. spends more on research and development than any other region, including Europe, China, or Japan. Small capitalization stocks, in our opinion, continue to remain at the epicenter of that innovation.

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Market Outlook

Market Outlook

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Innovation continues to drive secular investment opportunities Emerald continues to view the healthcare sector favorably given the resurgence in innovation in drug development, particularly in the areas of orphan drugs and oncology, as well as select opportunities within medical devices and services. The major secular technology trends we believe will define the enterprise in the second half of 2015 include strong datacenter spending, carrier infrastructure spending in core and metro segments, cyber security, and the emergence of the “Internet of Things”. On the consumer side of the technology sector, we believe mobile gaming, 4K television, the connected home and in‐car infotainment, will be secular themes that accelerate as the year progresses. The recovery from the 2007‐2009 financial crisis has driven opportunities for innovative, new business models in the financial services and banking markets.

Believe stock selection will be the key driver of relative outperformance

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Section D: Performance Review

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RATE OF RETURN REPORTED GROSS

Performance Disclaimer ‐ The performance information reflected is approved for “One‐on‐One” client presentations only. The performance figures do not reflect the deduction of investmentfees; the investment advisory fees are described in Part II of Emerald Advisers’ Form ADV. For example, if a client placed $100,000 under management and a hypothetical gross return of 10% wereachieved, the investment assets before fees would have grown to $259,374 in ten years. However, if an advisory fee of 1% of average net assets were charged, investment assets would have grownto $234,573, or an annual compounded rate of 8.9%. This includes all reinvestment of dividends

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LAWP Ret.

LAWP Health

Russell 2000 Growth

Since Inception (from 11‐30‐15)

‐5.22% ‐5.22% ‐4.77%

WPERP Ret. & Health Performance as of December 31, 2015

Emerald Div. SCG Composite Prelim. Perf.as of December 31, 2015

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Information contained herein should be used for one‐on‐one presentations only and should be accompanied by this disclosure. 26

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ETU

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QTD YTD 1 Year 3 Year 5 Year 10 Year Since InceptionEmerald Div SCG (Gross) ‐1.26 4.26 4.26 19.14 14.74 9.98 11.73Emerald Div SCG (Net) ‐1.5 3.24 3.24 17.95 13.6 8.88 10.61Russell 2000 Growth 4.32 ‐1.38 ‐1.38 14.28 10.67 7.95 7.82

Excess Return ‐5.82 4.62 4.62 3.67 2.93 0.93 2.79Performance Disclaimer ‐ The performance information reflected is approved for “One‐on‐One” client presentations only. The gross performance figures do not reflect the deduction ofinvestment fees; the investment advisory fees are described in Part II of Emerald Advisers’ Form ADV. For example, if a client placed $100,000 under management and a hypothetical grossreturn of 10% were achieved, the investment assets before fees would have grown to $259,374 in ten years. However, if an advisory fee of 1% of average net assets were charged,investment assets would have grown to $234,573, or an annual compounded rate of 8.9%. This includes all reinvestment of dividends. The fee used when computing net returns is thehighest fee stated in our Form ADV at 1%.

Source: PSN, Inception: 10/1/92

Emerald Div. SCG Composite Univ. Comparisonas of December 31, 2015

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Source: PSN, Universe: Small Cap Growth, Inception: 10/1/92


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RATE

OF

RETU

RN

Latest Quarter 1 Year 3 Years 5 Years 10 Years Since Inception HIGH (0.05) 7.75 6.94 19.20 15.30 10.80 13.74 FIRST QUARTILE 4.97 2.25 16.04 12.69 9.33 13.09 MEDIAN 3.38 -1.05 14.34 11.24 8.40 11.73 THIRD QUARTILE 1.54 -2.92 12.42 10.21 7.69 9.85 LOW (0.95) -1.60 -8.87 8.89 6.91 5.83 8.04 MEAN 3.22 -0.67 14.31 11.26 8.39 11.43 VALID COUNT 145 145 139 132 108 25

Emerald Advisers Div SCG – SA (Gross)Emerald Advisers Div SCG – SA (Net @Russell 2000 Growth

Latest Quarter 1 Year 3 Years 5 Years 10 Years Since InceptionVALUE RANK VALUE RANK VALUE RANK VALUE RANK VALUE RANK VALUE RANK-1.26 97 4.26 12 19.14 2 14.74 3 9.98 5 11.73 48-1.50 99 3.24 16 17.95 8 13.60 12 8.88 37 10.61 684.32 36 -1.38 55 14.28 52 10.67 60 7.95 63 7.82 99

Performance Disclaimer ‐ The performance information reflected is approved for “One‐on‐One” client presentations only. The gross performance figures do not reflect the deduction ofinvestment fees; the investment advisory fees are described in Part II of Emerald Advisers’ Form ADV. For example, if a client placed $100,000 under management and a hypothetical grossreturn of 10% were achieved, the investment assets before fees would have grown to $259,374 in ten years. However, if an advisory fee of 1% of average net assets were charged,investment assets would have grown to $234,573, or an annual compounded rate of 8.9%. This includes all reinvestment of dividends. The fee used when computing net returns is thehighest fee stated in our Form ADV at 1%.

Year

20152014201320122011201020092008200720062005 2004

Emerald

4.28%7.73%50.5%18.6%‐0.8%30.0%34.8%‐36.4%2.8%13.6%9.3%4.5%

Russell 2000 Growth‐1.38%5.60%43.3%14.6%‐2.9%29.1%34.5%‐38.5%7.1%13.4%4.2%14.3%

Year

200320022001200019991998199719961995199419931992 (3 mos.)

Emerald

52.1%‐28.3%‐5.3%‐24.6%102.0%‐9.7%27.4%22.3%48.0%3.2%21.2%8.9%

Russell 2000 Growth48.5%‐30.3%‐9.2%‐22.4%43.1%1.2%13.0%11.3%31.0%‐2.4%13.4%17.0%

Performance Disclaimer ‐ The preceding performance information is approved for use in “One‐on‐One” client presentations only. The above performance results for the Emerald Advisers, Inc.,Diversified Composite do not reflect the deduction of advisory fees or other expenses normally incurred in the management of an advisory account. The Adviser’s fees are fully described in Part II ofits Form ADV. If a client placed $100,000 under management and a hypothetical gross return of 10% were achieved, the investment assets before fees would have grown to $259,374 in ten years.However, if an advisory fee of 1% of average net assets were charged, investment assets would have grown to $234,573, or an annual compounded rate of 8.9%. The results reflect the reinvestmentof all dividends. Past performance is no guarantee of future results. Results vary so that a client may show a profit or loss in their account depending upon the market conditions and specific portfolioperformance. As shown above, the Diversified Composite tracks the performance of all accounts managed in this style that have been with Emerald for at least one month where the Advisermaintains full discretionary authority and for those which are not classified as broker‐dealer directed “wrap” accounts. As of December 31, 2015, the Diversified Composite represented 35% ofEmerald Advisers’ total assets under management.

RATE OF RETURN REPORTED GROSS


Emerald Div. SCG Composite Cal. Yr. Perf.as of December 31, 2015

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Emerald Div. SCG Representative Account4th Qtr. 2015 Performance Attribution

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Performance AttributionEMERALD DIV. SCG vs. Russell 2000 Growth9/30/2015 to 12/31/2015U.S. Dollar

Emerald Div. SCG VariationRussell 2000 Growth Attribution Analysis

Port. Port. Port. Bench. Bench. Bench. Average Total Contrib.Average Total Contrib. Average Total Contrib. Weight Return To Return Allocation Selection Interaction Total

New Russell Sectors2 Weight Return To Return Weight Return To Return Difference Difference Difference Effect Effect Effect EffectTotal 100.00 ‐1.22 ‐1.22 100.00 4.31 4.31 ‐‐ ‐5.53 ‐5.53 ‐0.08 ‐5.66 0.22 ‐5.53

Consumer Discretionary 16.29 ‐4.65 ‐0.76 18.56 ‐3.21 ‐0.56 ‐2.27 ‐1.44 ‐0.20 0.17 ‐0.29 0.02 ‐0.10Energy 0.79 ‐21.78 ‐0.17 1.18 ‐18.26 ‐0.20 ‐0.39 ‐3.51 0.03 0.06 0.01 ‐0.04 0.03Financial Services 19.16 0.89 0.09 9.69 4.56 0.44 9.47 ‐3.66 ‐0.36 0.01 ‐0.33 ‐0.35 ‐0.67Health Care 20.07 1.22 0.20 26.76 10.47 2.65 ‐6.69 ‐9.25 ‐2.46 ‐0.46 ‐2.19 0.47 ‐2.18Materials & Processing 6.77 ‐1.27 ‐0.06 7.23 4.12 0.32 ‐0.46 ‐5.39 ‐0.37 0.01 ‐0.35 ‐0.01 ‐0.34Producer Durables 7.34 ‐10.06 ‐0.75 11.98 2.59 0.32 ‐4.65 ‐12.64 ‐1.07 0.09 ‐1.50 0.47 ‐0.94Technology 24.96 ‐0.37 ‐0.05 19.64 5.33 1.01 5.32 ‐5.71 ‐1.05 0.06 ‐1.03 ‐0.32 ‐1.29Utilities 3.09 11.70 0.28 1.43 10.65 0.14 1.66 1.05 0.14 0.09 0.02 ‐0.03 0.08

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30

Performance AttributionEMERALD DIV. SCG vs. Russell 2000 Growth12/31/2014 to 12/31/2015U.S. Dollar

Emerald Div. SCG Russell 2000 Growth Variation Attribution Analysis

Port. Port. Port. Bench. Bench. Bench. Average Total Contrib.Average Total Contrib. Average Total Contrib. Weight Return To Return Allocation Selection Interaction Total

New Russell Sectors2 Weight Return To Return Weight Return To Return Difference Difference Difference Effect Effect Effect EffectTotal 100.00 4.03 4.03 100.00 ‐1.41 ‐1.41 ‐‐ 5.45 5.45 2.05 1.59 1.81 5.45

Consumer Discretionary 15.51 ‐8.82 ‐1.31 17.92 ‐8.43 ‐1.84 ‐2.41 ‐0.40 0.53 0.19 0.02 ‐0.05 0.16Consumer Staples 0.10 ‐30.54 ‐0.09 3.35 ‐2.30 ‐0.06 ‐3.25 ‐28.24 ‐0.03 0.07 ‐0.96 0.92 0.02Energy 1.22 ‐49.39 ‐0.54 2.17 ‐39.76 ‐0.52 ‐0.95 ‐9.62 ‐0.02 0.28 ‐0.16 ‐0.01 0.11Financial Services 15.94 23.46 2.55 9.57 7.37 0.66 6.37 16.09 1.90 0.58 1.23 0.46 2.27Health Care 23.00 20.95 5.21 26.38 8.49 1.48 ‐3.38 12.47 3.74 0.09 2.81 0.22 3.12Materials & Processing 6.17 ‐3.19 ‐0.23 7.28 ‐11.03 ‐0.78 ‐1.10 7.85 0.55 0.17 0.78 ‐0.35 0.60Producer Durables 10.27 ‐32.69 ‐3.56 12.13 ‐12.01 ‐1.36 ‐1.86 ‐20.68 ‐2.20 0.13 ‐3.02 0.56 ‐2.33Technology 23.57 7.05 1.59 19.80 3.29 0.85 3.77 3.76 0.74 0.29 0.79 ‐0.01 1.08Utilities 2.21 21.28 0.41 1.41 12.21 0.17 0.80 9.07 0.25 0.24 0.11 0.06 0.41

Emerald Div. SCG Representative AccountCY 2015 Performance Attribution

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On a relative basis, the fourth quarter proved to be a challenging end to what otherwise was a solid year of relative performance. The portfolio lagged the benchmark exiting the year largely as a result of stock selection within the healthcare, producer durables and technology sectors.

‐1.00

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ConsumerDiscretionary

Energy FinancialServices

Health Care Mat. &Processing

ProducerDurables

Technology Utilities

Emerald Div. SCG

Russell 2000 Growth

Emerald Div. SCG Representative Account4th Qtr. 2015 Performance Attribution

Portfolio Performance Summary

Top 10 Contributors to Return

Adamas Pharmaceuticals, Inc.

Veeva Systems, Inc.

Neurocrine Biosciences, Inc.

8x8, Inc.

Relypsa, Inc.

MacroGenics, Inc.

Bank of the Ozarks, Inc.

Gigamon, Inc.

HomeAway, Inc.

Alarm.com Holdings, Inc.

Contributors

Performance within the utilities sector was a modestly positive contributor to return, driven by the portfolio’s relative overweight position and stock selection within the telecommunications industry.

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Emerald Div. SCG Representative Account4th Qtr. 2015 Performance Review

Portfolio Performance Summary

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Detractors

The healthcare sector was the largest detractor to return for the quarter as a result of the negative contribution to return from stock selection and positioning within the biotechnology industry.

Relative performance within the producer durables and technology sectors also detracted from returns. At the industry level, holdings within the machinery, back office support, scientific instruments, electronic entertainment, software and communications industries detracted from performance.


Top 10 Detractors to Return

Chimerix, Inc.

Sequential Brands Group, Inc.

GTT Communications, Inc.

Glu Mobile, Inc.

Amicus Therapeutics, Inc.

Marcus & Millichap, Inc.

Red Robin Gourmet Burgers, Inc.

BofI Holding, Inc.

Qlik Technologies, Inc.

Burlington Stores, Inc.

Emerald Div. SCG Representative Account4th Qtr. 2015 Performance Review

Market OutlookDRIVEN BY RESEARCHCalendar Year 2015Performance Review

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Despite the challenging fourth quarter performance, the portfolio still was able to outperform the benchmark for the period. Stock selection within the healthcare, financial services, technology, materials, consumer discretionary and utility sectors led performance.

The healthcare sector was the most significant positive contributor to return for the trailing period. Stock selection within the biotechnology, services, and pharmaceutical industries all contributed positively to performance.

Also contributing positively was performance within the financial services, technology, materials, consumer discretionary and utility sectors. Outperformance was driven by both relative positioning and stock selection within the banking, software, restaurant and telecommunications industries.

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ConsumerStaples

Energy FinancialServices

Health Care Mat. &Processing

ProducerDurables

Technology Utilities

Emerald Div. SCG

Russell 2000 Growth

Emerald Div. SCG Representative AccountCY 2015 Performance Attribution

Market OutlookDRIVEN BY RESEARCH

At the stock level, top contributors included:

Neurocrine Biosciences, Inc.

EPAM Systems, Inc.

Horizon Pharma plc

Portola Pharmaceuticals, Inc.

Depomed, Inc.

Walker & Dunlop, Inc.

Bank of the Ozarks, Inc.

ZS Pharma, Inc.

Intrexon Corporation

Imperva, Inc.

Conversely, top detractors to performance included:

Spirit Airlines, Inc.

FARO Technologies, Inc.

Chimerix, Inc.

OvaScience, Inc.

Channeladvisor Corporation

Roadrunner Transportation Systems, Inc.

Rex Energy Corporation

ARC Document Solutions, Inc.

Sequential Brands Group, Inc.

Cepheid

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Emerald Div. SCG Representative AccountCY 2015 Performance Review

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Section E: Portfolio Review & Characteristics

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Top Ten Holdings


Emerald Div. SCG Representative Accountas of December 31, 2015

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Company Ticker Sector % Held1. Bank of the Ozarks Inc.2. MicroStrategy Inc. 3. EPAM Systems Inc. 4. Veeva Systems Inc.5. Opus Bank6. WellCare Health Plans Inc.7. Vonage Holdings Corp.8. Acadia Healthcare Company Inc.9. LendingTree, Inc.10. Apogee Enterprises Inc.

OZRKMSTREPAMVEEVOPBWCGVGACHCTREEAPOG

Financial ServicesTechnologyTechnologyHealthcareFinancial ServicesHealthcareUtilitiesHealthcareFinancial ServicesMaterials & Processing

2.222.121.991.901.821.811.801.781.751.71

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WPERP Retirement Holdingsas of December 31, 2015

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WPERP Ret. & Health Performance Detailas of December 31, 2015

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Portfolio Sector Allocation vs. Benchmark

Indicates weighting changed 0.5% or greater from previous quarter.

SectorEmerald

SCG ModelRussell 2000 Growth* Russell 2000*

Consumer Discretionary 16.6% 18.0% 14.2%

Consumer Staples 0.0% 3.5% 3.2%

Energy 0.6% 1.0% 2.3%

Financial Services 19.9% 9.7% 26.6%

Health Care 21.7% 28.0% 16.4%

Materials & Processing 6.3% 7.1% 5.7%

Producer Durables 7.1% 11.7% 12.0%

Technology 24.0% 19.5% 14.7%

Utilities 3.2% 1.5% 4.9%

Cash 0.5% 0.0% 0.0%


DRIVEN BY RESEARCH

* Source: Frank Russell Company – see full disclosure


* Source: Frank Russell Company – see full disclosure, ** Database estimate, Emerald’s internal estimates are higher.

*** In order to better reflect Emerald’s characteristics relative to the Russell Indices, Emerald is now calculating its P/E, Price/Book, Price/Sales and Price/Cash Flow ratios based on a weighted harmonic average in line with Russell’s calculation methodology.


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DRIVEN BY RESEARCH

CharacteristicEmerald

SCG ModelRussell 2000 Growth*

Projected Growth Rate (3‐5 Year)** 20.2% 18.1%

P/E Ratio (Trailing 1 Year) *** 22.4x 21.6x

P/E Ratio (Forward 1 Year) *** 19.6x 19.2x

ROE 17.1 16.4

R2 vs. Russell 2000 Growth 0.85 1.00

Yield (%) 0.47 0.76

Price / Book Value*** 2.9x 3.7x

Price / Sales*** 1.7x 1.4x

Price / Cash Flow*** 26.1x 21.0

Median Market Cap (By No. of Stocks) $1,166 mm $758 mm

Wgt. Average Market Cap $1,866 mm $2,068 mm

Turnover (Trailing 12 mos.) 62% ‐‐‐


Notice:“Frank Russell Company is the source and owner of the Russell Index data contained or reflectedin this material and all trademarks and copyrights related thereto. This is a presentation of USER.The presentation may contain confidential information and unauthorized use, disclosure,copying, dissemination or redistribution is strictly prohibited. Frank Russell Company is notresponsible for the formatting or configuration of this material or for any inaccuracy in USER’spresentation thereof.”

Russell Disclosure

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3 Year Portfolio Risk Measuresas of December 31, 2015

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0.7

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0

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15 10

11

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14

15

16

17

18

19

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0

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8

9 -0.2

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1.3 0.5

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HIGH (0.95)FIRST QUARTMEDIANTHIRD QUARTLOW (0.05)MEANVALID COUNT

R-Squared0.980.940.910.860.740.90139

Alpha6.432.670.90-0.55-4.550.95139

Std Dev Pop11.6813.3614.3415.4017.6914.40139

Tracking Error Pop2.303.914.655.917.894.87139

Batting Avg0.750.580.500.420.250.50139

Beta0.750.860.941.001.120.93139

Sharpe Ratio Pop1.461.120.990.870.601.00139

Info Ratio Pop1.010.360.01-0.37-1.160.02139

Treynor Ratio23.6217.2715.1813.469.4915.36139

Emerald Advisers Emerald DiRussell 2000 Growth

VALUE RANK0.83 861.00 1

VALUE RANK4.79 70.00 66

VALUE RANK15.74 8214.58 59

VALUE RANK6.54 850.00 1

VALUE RANK0.75 10.00 99

VALUE RANK0.98 691.00 77

VALUE RANK1.21 150.98 52

VALUE RANK0.74 120.00 52

VALUE RANK19.42 1114.23 64

Performance Disclaimer ‐ The performance information reflected is approved for “One‐on‐One” client presentations only. The performance figures do not reflect the deduction ofinvestment fees; the investment advisory fees are described in Part II of Emerald Advisers’ Form ADV. For example, if a client placed $100,000 under management and a hypothetical grossreturn of 10% were achieved, the investment assets before fees would have grown to $259,374 in ten years. However, if an advisory fee of 1% of average net assets were charged,investment assets would have grown to $234,573, or an annual compounded rate of 8.9%. This includes all reinvestment of dividends.

Source: PSN, Universe: Small Cap Growth, Inception: 10/1/92, Period Type: Quarterly, Risk Index: Russell 2000 Growth, Riskless Index: 90 Day T‐Bill

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Section F: Fee Schedule

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DRIVEN BY RESEARCH


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Los Angeles Water & Power Employees’ Retirement Plan & Retiree Health Benefit Fee Schedule:

59.5 basis points on all assets

WPERP Fee Schedule

Documents

INVESTMENT MANAGER SUMMARY MANAGEMENT ASSETS · 2/10/2016 · Equity Manager (February 10, 2016, Regular Retirement Board Meeting) INVESTMENT MANAGER SUMMARY MANAGEMENT Firm Name