Item 8.01 Other Events.




As previously disclosed, on July 26, 2022, Pzena Investment Management, Inc., a
Delaware corporation (the "Company" or "Pzena"), entered into an Agreement and
Plan of Merger (the "Merger Agreement") with Pzena Investment Management, LLC, a
Delaware limited liability company ("PIM, LLC"), and Panda Merger Sub, LLC, a
Delaware limited liability company and a wholly owned subsidiary of PIM, LLC
("Merger Sub"), providing for the merger of the Company with and into Merger Sub
(the "Merger"), with Merger Sub surviving the Merger (the "Transaction").

On September 27, 2022, the Company filed a definitive proxy statement with the
Securities and Exchange Commission (the "SEC") in connection with the
Transaction (the "Proxy Statement"). As of October 20, 2022, two lawsuits have
been filed in federal and state court by purported Pzena shareholders against
the Company and members of the Board (collectively, the "Actions") relating to
the Transaction. The Actions, in the order by which they were filed, are:
Garfield v. Pzena et al., No. 66283/2022 (N.Y. Sup. Ct. Oct. 4, 2022) and
Plumley v. Pzena Investment Management, Inc. et al., 1:22-cv-01337-UNA (D. Del.
Oct. 11, 2022). The Plumley Action, filed in federal court, generally alleges
that the Proxy Statement misrepresented and/or omitted certain purportedly
material information in violation of Sections 14(a) and 20(a) of the Exchange
Act and the rules promulgated thereunder. The Garfield Action, filed in state
court, also names PIM, LLC as a defendant, and generally alleges state law
claims for breach of fiduciary duty, failure to disclose, and aiding and
abetting breach of fiduciary duty. The alleged material misstatements and
omissions relate to, among other things: (i) certain financial projections of
Pzena; (ii) certain financial analyses of the financial advisors to the special
committee of the Board (the "Special Committee"); (iii) the financial interests
of Pzena executives and Board members; (iv) the financial interests of the
Special Committee's financial advisors; and (v) certain statements concerning
the process leading up to the Transaction. Plaintiffs generally seek, among
other things, to enjoin Pzena from consummating the Transaction, or in the
alternative, rescission of the Transaction and/or compensatory damages, as well
as attorney's fees.

As of October 20, 2022, six demand letters have been sent to the Company in connection with the Transaction. The demand letters were each sent on behalf of a purported Pzena shareholder, and each alleges similar deficiencies in the Proxy Statement as those noted in the complaints referenced above.



The Company believes that the claims asserted in the Actions and demand letters
described above are without merit and that no additional disclosures were or are
required under applicable law. However, to moot the unmeritorious disclosure
claims, to avoid the risk of the actions described above delaying or adversely
affecting the Transaction and to minimize the costs, risks and uncertainties
inherent in litigation, without admitting any liability or wrongdoing, the
Company has determined to voluntarily make the following supplemental
disclosures to the Proxy Statement as described in this Current Report on Form
8-K. Nothing in this Current Report on Form 8-K shall be deemed an admission of
the legal necessity or materiality under applicable laws of any of the
disclosures set forth herein. To the contrary, the Company specifically denies
all allegations in the Actions described above that any additional disclosure
was or is required.

On October 10, 2022, A. Rama Krishna and the Krishna Family Trust, holders of
Class B Units of PIM, LLC, filed suit against Pzena in the Delaware Court of
Chancery in a case captioned Krishna v. Pzena Investment Management, Inc., C.A.
No. 2022-0914-MTZ (Del. Ch.). Plaintiffs allege claims for breach of contract
and breach of the covenant of good faith and fair dealing relating to the PIM,
LLC Agreement. Plaintiffs seek declaratory and injunctive relief, including an
injunction requiring Pzena to establish an exchange date for Class B members of
PIM, LLC to convert their Class B Units to Class A shares of Pzena prior to the
completion of the Transaction. Plaintiffs also seek a preliminary injunction
enjoining the close of the Transaction. Pzena believes the claims asserted in
this action are without merit.

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                Supplemental Disclosures to the Proxy Statement

The following disclosures in this Current Report on Form 8-K supplement the
disclosures contained in the Proxy Statement and should be read in conjunction
with the disclosures contained in the Proxy Statement, which in turn should be
read in its entirety. All page references are to the Proxy Statement and terms
used below, unless otherwise defined, shall have the meanings ascribed to such
terms in the Proxy Statement. For clarity, new text added to the Proxy Statement
is shown in bold, underlined text, and text deleted from the Proxy Statement is
shown in stricken-through text.

The section of the Proxy Statement entitled "Summary Term Sheet" is hereby amended and supplemented as follows:

The sixteenth line on page 1 of the Proxy Statement is hereby amended and supplemented as follows:



the special committee of the Board consisting of independent and disinterested
directors Steven Galbraith as Chairman, Charles Johnson, Shavar Jeffries, and
Richard Meyerowich, collectively, as the "Special Committee";.

The section of the Proxy Statement entitled "Special Factors-Background of the Merger" is hereby amended and supplemented as follows:

The sixth paragraph on page 18 of the Proxy Statement is hereby amended and supplemented as follows:



In March 2022, in light of the Company's reduced stock price and limited
benefits of being a public company, the Board authorized the Company's
management to contact Party 2 again to see if they had an interest in
resurrecting the discussions. On March 17th, Mr. Pzena contacted Party 2 and
held a brief phone conversation on March 21st. Party 2 agreed to reconsider its
interest and signed an updated confidentiality agreement, which included a
customary standstill provision restricting Party 2 from taking certain actions
with respect to the Company and its securities unless invited in writing by the
Company. The confidentiality agreement did not prohibit Party 2 from making a
confidential request to the Company to amend or waive the standstill provision.
On April 9th, following an update of its prior analysis, Party 2 informed
Mr. Pzena of its interest in making an offer to acquire the PZN Class A common
stock.

The last paragraph on page 18 / first paragraph on page 19 of the Proxy Statement is hereby amended and supplemented as follows:



On April 13th, which was the next regularly scheduled Board meeting following
these developments, Mr. Pzena updated the Board regarding the Party 2's renewed
interest and the potential for a debt-funded acquisition of the PZN Class A
common stock by PIM, LLC. Among other things, Mr. Pzena noted the recent stock
price performance and the current state of the business, noted his view that
continuing as a public company provided little advantage given the high costs
and low levels of liquidity for the PZN Class A common stock, and suggested that
a transaction could be in the best interests of the Company's stockholders. As a
result, Mr. Pzena recommended exploring potential transactions, including the
possibility of PIM, LLC making its own proposal to acquire the PZN Class A
common stock. In light of these developments, and the differing interests that
could arise between the owners of Class B units in PIM, LLC and the unaffiliated
holders of PZN Class A common stock regardless of the form of transaction
pursued, the Board determined to create the Special Committee, whose members
were selected because of their independence and disinterestedness. The Special

--------------------------------------------------------------------------------

Committee which was directed to hire its own financial advisors and legal counsel and would be responsible for considering, negotiating and recommending any such proposals on behalf of the holders of PZN Class A common stock.

The third full paragraph on page 19 of the Proxy Statement is hereby amended and supplemented as follows:



On May 18th, Mr. Pzena and Jessica Doran, Chief Financial Officer of the
Company, presented management's long-range forecast to the Board, including the
members serving on the Special Committee, and updated the Board on industry
conditions and on its outlook. Mr. Pzena explained the material assumptions used
to prepare the long-range forecast, including the forecast of assets under
management. Mr. Pzena further explained that those material assumptions included
known inflows expected from new accounts, such as $2 billion expected from an
additional sub-advisory mandate that would expand the firm's relationship with
Vanguard. The Board reviewed this forecast and authorized Ardea to share the
forecast with Party 2 and PIM, LLC to share the forecast with a potential debt
financing source in connection with PIM, LLC's formulation of a proposal to the
Company regarding a potential transaction.

The section of the Proxy Statement entitled "Special Factors-Opinions of the
Company's Financial Advisors-Opinion of Ardea Partners LP-Summary of Financial
Analyses" is hereby amended and supplemented as follows:

The first full paragraph on page 33 of the Proxy Statement is hereby amended and supplemented as follows:



Unless the context indicates otherwise, for purposes of the financial analyses
and reviews described below, Ardea calculated enterprise value (which we refer
to as "EV"), as the relevant company's common equity value, plus book value of
preferred stock and debt, less cash and cash equivalents (which we refer to as
"net debt"), plus, where applicable, adjusting for the book value of other
debt-like items and non-controlling interests and equity investments, of the
relevant company, based on (a) for each target company included in the selected
change-of-control transactions, (i)(A) the implied value of the relevant target
company's common equity using the implied purchase price paid for such target
company's common equity in the relevant transaction and (B) the relevant target
company's net debt and other balance sheet items as of such target company's
most recently reported quarter end immediately prior to announcement of the
relevant transaction (in the case of transactions involving the acquisition of
public companies) or otherwise (ii) the publicly announced EV for the target
business at the time of announcement of the relevant transaction, (b) for each
public company, (i) the market value of the relevant public company's diluted
equity, using closing stock prices on July 22, 2022 and (ii) the relevant
company's net debt and other balance sheet items as of such company's most
recently reported quarter end, and (c) for the Company, (i) diluted shares
outstanding as of June 30, 2022, calculated using the treasury stock method;
(provided that PIM Class B-1 units were treated as equivalent to PIM Class B
units), of approximately 87.9 million (based on the merger consideration of
$9.60) and (ii) net debt and other balance sheet items as of June 30, 2022,
which in the case of net debt was $(3) million, as adjusted per the guidance of
the Company's management as to excess cash and investments of approximately
$3 million and $19 million, respectively, as well as adjusted to reflect the
present value of projected future tax savings of approximately $2 million
resulting from the tax receivable agreement, dated as October 30, 2007, by and
among the Company, PIM, LLC and the members named therein (which we refer to as
the "tax receivable agreement"). Unless the context indicates otherwise,
references to (i) "EBITDA" are references to earnings before interest, taxes,
depreciation and amortization and for each public company, and (ii) "LTM" are
references to the latest twelve month period for which financial information was
publicly available.

--------------------------------------------------------------------------------
The section of the Proxy Statement entitled "Special Factors-Opinions of the
Company's Financial Advisors-Opinion of Ardea Partners LP-Discounted Cash Flow
Analysis" is hereby amended and supplemented as follows:

The third full paragraph on page 33 of the Proxy Statement is hereby amended and supplemented as follows:



Ardea derived a range of implied equity values for the Company by discounting to
present value as of June 30, 2022, (i) projected unlevered after tax net income
from July 1, 2022 to December 31, 2027, discounted back to June 30, 2022, and
(ii) a range of implied terminal values for the Company as of December 31, 2027,
calculated by applying terminal multiples ranging from 8.0x to 12.0x to the
estimate of the Company's terminal year unlevered net income. For purposes of
discounting to present value, Ardea used a range of discount rates from 9.5% to
11.0%, reflecting the Company's estimated weighted average cost of capital using
the capital asset pricing model (which we refer to as "CAPM") and Ardea's
professional judgment and experience. Ardea then calculated a reference range of
implied values per share of PZN Class A common stock using the net debt and
other balance sheet items (as adjusted) and diluted share information described
above, which resulted in an implied per share value of PZN Class A common stock
ranging from $7.51 to $9.85, as compared to the closing stock price of PZN
Class A common stock on July 22, 2022 of $6.84 and the merger consideration of
$9.60.

The fourth full paragraph on page 33 of the Proxy Statement is hereby amended and supplemented as follows:



Ardea also performed the discounted cash flow analysis described above, but
using the treasury stock method for calculating outstanding PIM Class B-1 units,
as opposed to treating PIM Class B-1 units as equivalent to PIM Class B units.
This alternative method (which we refer to as the "Class B-1 Treasury Stock
Method"), resulted in an implied per share value of PZN Class A common stock
ranging from $8.24 to $10.65, based on diluted shares outstanding as of June 30,
2022 of approximately 79.7 million (based on the merger consideration of $9.60).

The section of the Proxy Statement entitled "Special Factors-Opinions of the
Company's Financial Advisors-Opinion of Ardea Partners LP-Present Value of
Future Stock Price and Dividends Analysis" is hereby amended and supplemented as
follows:

The first paragraph on page 34 of the Proxy Statement is hereby amended and supplemented as follows:



Ardea derived a range of implied future values per share for shares of PZN
Class A common stock at year end 2022, 2023, 2024, 2025, 2026 and 2027 by
applying a range of implied multiples of price to earnings per share (which we
refer to as "EPS"), of 8.0x to 12.0x, to the estimates of EPS (on a diluted
basis) of PZN Class A common stock for 2022, 2023, 2024, 2025, 2026 and 2027,
respectively, as reflected in the Projections. By applying discount rates of
10.0% and 11.0%, respectively, reflecting an estimate of the range of the
Company's cost of equity using CAPM and Ardea's professional judgment and
experience, Ardea discounted to present value, as of June 30, 2022, each of
(i) the implied future values per share it derived for PZN Class A common stock
described above, and (ii) the estimated distributions to be paid per share of
PZN Class A common stock (assumed to be paid at year end each year) for each of
2022, 2023, 2024, 2025, 2026 and 2027, which estimated distributions were
assumed to be 65% of estimated EPS of PZN Class A common stock for each
respective year, based on PZN

--------------------------------------------------------------------------------
management's targeted cash dividend payout ratio of between 60% and 70% of
estimated EPS of PZN Class A common stock for each respective year, as reflected
in the Projections (except for 2022, which estimated distribution was reduced by
$0.03, reflecting the dividend per share of PZN Class A common stock paid on
May 20, 2022). This analysis resulted in an implied per share value of PZN
Class A common stock ranging from $5.97 to $9.53, as compared to the closing
stock price of PZN Class A common stock on July 22, 2022 of $6.84 and the merger
consideration of $9.60.

The section of the Proxy Statement entitled "Special Factors-Opinions of the
Company's Financial Advisors-Opinion of Ardea Partners LP-General" is hereby
amended and supplemented as follows:

The fifth paragraph on page 39 of the Proxy Statement is hereby amended and supplemented as follows:



Ardea is engaged in underwriting services, private placements of securities,
merger and acquisition advisory services, investment banking and other financial
and non-financial activities and services for various persons and entities.
Ardea and its employees and affiliates, and funds or other entities they manage
or in which they invest or have other economic interests or with which they
co-invest, may at any time purchase, sell, hold or vote long or short positions
and investments in securities, derivatives, loans, commodities, currencies,
credit default swaps and other financial instruments of the Company, PIM, LLC
and any of their affiliates, or any currency or commodity that may be involved
in the merger. Pursuant to the Ardea engagement letter, Ardea was engaged to
serve as financial advisor to the Special Committee in connection with the sale,
transfer or other disposition of all or a majority of the outstanding PZN
Class A common stock of the Company. The Ardea engagement letter provides for a
transaction fee that is estimated, based on the information available as of the
date of announcement, to be approximately $3.14 million, all of which is payable
upon consummation of the merger. In addition, the Company agreed to reimburse
Ardea for certain expenses and to indemnify Ardea and related persons against
certain liabilities that may arise out of Ardea's engagement. In the two years
preceding the date of Ardea's opinion, Ardea did not receive any compensation in
respect of any investment banking services provided to the Company, PIM, LLC,
Richard S. Pzena, John P. Goetz or William L. Lipsey, nor is any such
compensation currently understood to be contemplated. Ardea may in the future
provide investment banking services, financial advisory, underwriting and/or
other financial and non-financial services to the Company, PIM, LLC and their
affiliates for which Ardea may receive compensation.

The section of the Proxy Statement entitled "Special Factors-Opinions of the Company's Financial Advisors-Opinion of CastleOak Securities L.P.-Selected Comparable Company Analysis" is hereby amended and supplemented as follows:

The third full paragraph on page 43 of the Proxy Statement is hereby amended and supplemented as follows:



As part of its selected comparable company analysis, CastleOak calculated and
analyzed certain ratios and multiples, including: (1) total enterprise value
(calculated as the equity value based on fully diluted shares outstanding using
the treasury stock method, plus debt and less cash and cash equivalents, after
giving effect to certain adjustments for non-controlling interests and equity
investments) ( which we refer to as "TEV") as a multiple of EBITDA for the
trailing 12 months ended March 31, 2022 and fiscal years ending in 2022 and 2023
(which we refer to as "TEV / EBITDA") and (2) the price to earnings multiples
for the trailing twelve months ended March 31, 2022 and fiscal years ending in
2022 and 2023 (which we refer to as "P / E"). The TEV / EBITDA multiple of each
of the selected comparable companies included in the analysis for the trailing
twelve month period ended March 31, 2022 was

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4.6x, 5.5x, 6.7x, 5.6x, 3.9x, 5.6x, 6.0x, 6.6x, 3.4x, 3.1x, 3.2x, and 9.1x,
respectively. The P / E multiple of each of the selected comparable companies
included in the analysis for the trailing twelve month period ended March 31,
2022 was 18.3x, 12.3x, 8.5x, 12.1x, 7.6x, 6.0x, 9.2x, 6.5x, 5.9x, 7.9x, 12.5x,
and 6.1x, respectively.

The section of the Proxy Statement entitled "Special Factors-Opinions of the Company's Financial Advisors-Opinion of CastleOak Securities L.P.-Selected Precedent Merger Analysis" is hereby amended and supplemented as follows:

The fourth paragraph on page 44 of the Proxy Statement is hereby amended and supplemented as follows:

CastleOak reviewed, to the extent publicly available, and analyzed the valuation
and financial metrics relating to the following four selected transactions
involving companies in the asset management industry, which CastleOak in its
professional judgment considered generally relevant for comparative purposes.
The peer group that is included in CastleOak's precedent transaction analysis is
comprised of Callodine Group's acquisition of Manning & Napier in 2022, Pendal's
acquisition of TSW in 2021, Macquarie's acquisition of Waddell & Reed in 2020,
and Perpetual's acquisition of Barrow Hanley in 2020:

The fifth paragraph on page 44 of the Proxy Statement is hereby amended and supplemented as follows:



For each precedent transaction, CastleOak reviewed the TEV of the target company
in the transaction based upon the consideration payable in the transaction as a
multiple of the target company's pro forma EBITDA (which we refer to as "TEV /
Pro Forma EBITDA"). The Total Enterprise Value for each of the selected
precedent transactions was $238 million, $320 million, $1.7 billion, and
$425 million, respectively. The Target AUM for each of the selected precedent
transactions was $20.8 billion, $23.6 billion, $131.0 billion, and
$44.1 billion, respectively. Estimated financial data of the selected
transactions were based on publicly available information.

The first full paragraph on page 45 of the Proxy Statement is hereby amended and supplemented as follows:



After reviewing the above analyses, CastleOak selected a TEV / Pro Forma EBITDA
multiple range of 6.0x to 8.0x, and applied such range to the Company's
estimated fiscal year 2022 EBITDA based on the Projections, added the Company's
estimated net excess cash as of June 30, 2022 and present value of certain net
tax savings and divided the result by the Company's implied fully diluted share
count using the treasury method based on the fully diluted shares outstanding as
of June 30, 2022, all as provided by management of the Company, to calculate a
range of implied values of $6.95 to $9.05 per share. The TEV / Pro Forma EBITDA
multiple for each of the selected precedent transactions was 6.7x, 7.6x, 6.0x,
and 8.0x, respectively.

--------------------------------------------------------------------------------
The section of the Proxy Statement entitled "Special Factors-Opinions of the
Company's Financial Advisors-Opinion of CastleOak Securities L.P.-General" is
hereby amended and supplemented as follows:

The second paragraph on page 47 of the Proxy Statement is hereby amended and supplemented as follows:



In the ordinary course of CastleOak's businesses, CastleOak may provide
investment banking and other financial services to the Company, the PIM, LLC, or
their respective affiliates, and may receive compensation for the rendering of
these services. During the two years preceding the date of its written opinion,
CastleOak has did not received receive fees for any such services from the
Company or PIM, LLC for any such services, or Mr. Pzena, Mr. Goetz or Mr. Lipsey
in their individual capacities, or to CastleOak's knowledge, any of their
related persons or affiliates. Other than as previously disclosed, CastleOak
will not receive any other significant payment or compensation contingent upon
the successful consummation of the merger. In the ordinary course of business,
CastleOak and its clients may transact in the securities of the Company or their
affiliates or related entities. Prior to and may at any time as of the date of
CastleOak's written opinion delivered to the Special Committee dated July 26,
2022, CastleOak did not hold any long or short positions in such securities for
its own account.

The section of the Proxy Statement entitled "Unaudited Prospective Financial Information of the Company" is hereby amended and supplemented as follows:

The projections chart on page 51 of the Proxy Statement is hereby amended and supplemented as follows:



Projections

The following table presents a summary of the Projections:



($ in thousands, except Average AUM unless
otherwise noted)                               2022E          2023E

2024E 2025E 2026E 2027E Beginning AUM ($ in millions)

$  52,521      $  52,163

$ 55,734 $ 58,222 $ 60,612 $ 62,886 New Sales(1)

                                     4,800          3,307

2,400 2,500 2,600 2,700 Net Flows from Existing Clients

                 (1,733 )       (2,330 )       (2,685 )       (3,008 )       (3,343 )       (3,688 )
Performance                                     (3,425 )        2,594          2,773          2,897          3,017          3,131
Ending AUM ($ in millions)                   $  52,163      $  55,734      $  58,222      $  60,612      $  62,886      $  65,028
Average AUM ($ in millions)                  $  51,009      $  53,949      $  56,978      $  59,417      $  61,749      $  63,957
Weighted Average Fee Rates                       0.390 %        0.385 %        0.380 %        0.375 %        0.370 %        0.365 %
Revenue                                      $ 204,080      $ 211,924      $ 219,729      $ 222,890      $ 228,471      $ 233,442
Compensation & Benefits                      $  83,923      $  88,554

$ 93,601 $ 95,296 $ 98,108 $ 100,324 General & Administrative Expenses

               25,308         25,999         27,405         28,592         29,435         30,493
Total Expenses                               $ 109,231      $ 114,533      $ 121,006      $ 123,888      $ 127,544      $ 130,817
EBITDA                                       $  96,132      $  98,655      $ 100,006      $ 100,285      $ 102,210      $ 103,909
Depreciation                                    (1,284 )       (1,284 )       (1,284 )       (1,284 )       (1,284 )       (1,284 )
Operating Income                                94,849         97,371         98,723         99,001        100,927        102,626
Interest Income                                    177            154            171            193            208            233
Investment G/L                                    (288 )        2,250          2,500          2,750          3,000          3,250
UBT (4% effective rate)                         (9,690 )       (3,991 )

(4,056 ) (4,078 ) (4,165 ) (4,244 ) Corporation Tax (25.7% effective rate) (21,858 ) (24,617 )


 (25,016 )      (25,152 )      (25,692 )      (26,179 )
Net Income                                   $  63,192      $  71,168      $  72,322      $  72,715      $  74,277      $  75,685
Earnings per Share                           $    0.74      $    0.83      $    0.83      $    0.81      $    0.82      $    0.82

(1) 2022 estimate for "New Sales" includes the approximately $2 billion expected

from an additional sub-advisory mandate from Vanguard that was expected to be

funded in the third quarter of 2022.

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The section of the Proxy Statement entitled "Special Factors-Unaudited Prospective Financial Information of the Company-Treatment of Company Equity Awards" is hereby amended and supplemented as follows:

The second paragraph on page 52 of the Proxy Statement is hereby amended and supplemented as follows:



Pursuant to the merger agreement, at the effective time of the merger: (1) each
outstanding restricted share of PZN Class A common stock held by a non-employee
director will fully vest and be entitled to receive the merger consideration;
and (2) each outstanding deferred stock unit corresponding to a share of PZN
Class A common stock held by a non-employee director will vest (to the extent
unvested) and will be converted into the right to receive the merger
consideration, with settlement to occur in accordance with the original election
of such director. The estimated aggregate value of the unvested restricted
shares of PZN Class A common stock held by the Company's non-employee directors
is $24,086, the estimated aggregate value of the vested deferred stock units
corresponding to a share of PZN Class A common stock held by the Company's
non-employee directors is $6,139,402, and the estimated aggregate value of the
unvested deferred stock units corresponding to a share of PZN Class A common
stock held by the Company's non-employee directors is $107,8946,271,382.

Forward-Looking Statements

Certain statements and information contained in this communication may be considered "forward-looking statements," such as statements relating to . . .

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