At a Glance

• Primary Benchmark: Russell Microcap^TM Index.
• We expect to add value primarily through stock selection, rather than industry or sector weightings.
• We generally invest in 30-60 companies.
• The market capitalization of each of our holdings generally falls, at purchase, in the capitalization range of the Russell Microcap Index (as of the latest index “reconstitution”).
• Our positions in cash and cash equivalents are not actively managed, but generally account for less than 5% of portfolio assets, though our cash position may reach up to approximately 10% during periods of active portfolio trading.

Objective

Typical Investment Guidelines

Investment Process Summary

Quantitative Screens

Fundamental Analysis

Sell Discipline

• The stock appreciates to our target price without commensurate gain in intrinsic value;
• The anticipated catalyst(s) fails to happen within a reasonable period, or
• An unanticipated event, change in fundamentals, or deterioration in intrinsic value undermines our reason for owning the stock.

Micro-capitalization companies may present risks such as lack of product diversification, potentially insufficient capital resources and greater exposure to business/economic cycles.

Representative Portfolio Characteristics (as of 9/30/2008)*

Top Ten Holdings (as of 9/30/2008)*

* Supplemental Information. Data as of 9/30/2008. Rmicro = Russell Microcap Index.

Please refer to our GIPS compliant presentation, which includes performance footnotes, fee schedules, index descriptions and disclosures. The data represent the aggregate characteristics of all securities held in the representative portfolio, an actual commission account not subject to taxation. Data is obtained from FactSet and Russell. Small capitalization companies may present risks such as lack of product diversification, potentially insufficient capital resources, and greater exposure to business and economic cycles. It should not be assumed that investments in any top ten holdings listed were or will prove to be profitable. Top ten holdings may no longer be held in client portfolios. The holdings of any particular account may vary based on any investment restrictions applicable to the account. This information is for illustrative purposes only, is subject to change at any time and should not be considered investment advice or a recommendation to buy or sell any particular security. In accordance with Rule 206(4)-1 under the Investment Advisors Act of 1940, upon request, we will furnish you with a list of all recommendations made by Brandywine within the immediately preceding twelve months. There is no guarantee that holding securities with relatively high (or low) price-to-earnings, price-to-book, or price-to-cash flow will cause the portfolio to outperform its benchmark or index.

The Russell Microcap^® and Russell Microcap^® Value Indexes are trademarks of the Frank Russell Company.

Russel™ is a trademark of the Frank Russell Company.

Representative Sector Weights (as of 9/30/2008)*

* Supplemental Information. Data as of 9/30/2008. Rmicro = Russell Microcap Index.

The data represent the aggregate characteristics of all securities held in the representative portfolio, an actual commission account not subject to taxation. Data is obtained from FactSet and Russell. Sector weights are included for informational purposes only and should not be perceived as investment recommendations. It should not be assumed that investments in any sectors listed were or will prove to be profitable. The sector weights of any particular account may vary based on any investment restrictions applicable to the account. Small capitalization companies may present risks such as lack of product diversification, potentially insufficient capital resources, and greater exposure to business and economic cycles.

The Russell Microcap^® and Russell Microcap^® Value Indexes are trademarks of the Frank Russell Company.

Russel™ is a trademark of the Frank Russell Company.

Quarterly Portfolio Manager Commentary (as of 9/30/2008)

You should not assume that investments or strategies discussed in this commentary were or will be profitable, or that the investment decisions Brandywine Global makes in the future will be profitable or equal to the investment performance discussed in this commentary. The data and information presented in a Brandywine Global commentary is believed to be accurate and reliable as of the date recorded. Brandywine Global will not undertake to update the data and information presented at a later date. This commentary may not reflect the current views of the featured speaker and may not reflect current or sudden market activity.

Annualized Composite Returns (as of 9/30/2008)

Calendar Year Composite Returns (as of 9/30/2008)

Data as of 9/30/2008. Rmicro = Russell Microcap Index, RMicroV = Russell Microcap Value Index.

Organization: Brandywine Global Investment Management, LLC (the "Firm") is a wholly owned, independently operated, subsidiary of Legg Mason, Inc. The Firm has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®). For the periods July 1, 2000 through June 30, 2005, the Firm has been verified by Kreischer Miller. A verification includes assessing whether the Firm (1) complied with the composite construction requirements of the GIPS standards on a firm-wide basis, and (2) designed its processes and procedures to calculate and present performance results in compliance with the GIPS standards. Copies of the verification reports are available upon request. Composite Description: The Domestic MicroCap Equity Composite (the "Composite") inception date is January 1, 2006. The Composite creation date is January 1, 2006. The Composite includes discretionary accounts invested in the firm's Domestic Microcap Equity strategy. This strategy invests in microcap stocks (typically consistent with the capitalization range of the Russell Microcap Index) that are considered undervalued and attractive by the team based on a combination of quantitative and fundamental factors typically represents 30 - 60 different holdings. The Composite returns are benchmarked to the Russell Microcap® Index. The Russell Microcap Index measures performance of the microcap segment, representing less than 3% of the U.S. equity market. The Russell Microcap Index includes the smallest 1,000 securities in the small-cap Russell 2000 Index plus the next 1,000 securities. Performance Calculation: Portfolios are valued daily on a trade date basis and include dividends and interest as well as all realized and unrealized capital gains and losses. Return calculations at the portfolio level are time-weighted to account for periodic contributions and withdrawals. Performance results are calculated on a before tax, total return basis. Prior to July 1, 2007, portfolios were included in the Composite beginning with the first full quarter of performance through the last full quarter of performance. After July 1, 2007, portfolios are included in the Composite beginning with the first full month of performance through the last full month of performance. The Composite returns consist of size-weighted portfolio returns using beginning of period values to weight the portfolio returns. Monthly linking of interim performance results is used to calculate quarterly and annual returns. Composite's valuations and returns are computed in U.S. Dollars ("USD"). The results are presented in USD or in other currencies (to accommodate overseas investors), the latter by converting monthly USD returns into other currency returns using the appropriate currency returns. Gross returns reflect the deduction of trading expenses. Net of fee returns reflect the deduction of trading expenses and the highest investment management fees charged within the composite membership as stated in the following fee schedule. Preliminary data, if so noted, reflects unreconciled data for the most recent reporting period. Composite dispersion is calculated using the asset-weighted standard deviation method for all portfolios that were in the Composite for the entire year. Composite dispersion is not presented for periods with five or fewer portfolios. The number of accounts and market values are as of the end of the period. Past performance is no guarantee of future results. A complete list describing the Firm's composites as well as any additional information regarding the Firm's policies for calculating and reporting performance results is available upon request. Fee Schedule: Institutional Client Separate Account Management Fee Schedule (minimum initial investment: $10 million): 1.500% flat fee on all assets. Institutional Client Commingled Account Management Investment Trust Fee Schedule (minimum initial investment: $1 million): 1.500% flat fee on all assets, or a 1.000% Base fee on market value plus a Performance fee equal to the Performance return minus the Benchmark return times 10%. Additional information on the Firm's fee schedule can be found in Form ADV Part II which is available upon request.

Portfolio Team

Edward A. Trumpbour
Managing Director & Portfolio Manager

Ed is portfolio manager for the Absolute Value Equity portfolios. He joined the firm in 1996, bringing 15 years of industry experience with him. Previously, Ed was with Delaware Investment Advisors, a subsidiary of Delaware Management Holdings, as vice president and senior portfolio manager with the firm's institutional large cap value team. Also while at Delaware, he launched the Delaware Value Fund (renamed Delaware Small Cap Value Fund), a Morningstar Five-Star rated fund investing in small and mid capitalization equities (1985-1996). Additionally, Ed served as an analyst with Gabelli Asset Management (1984-1985). He earned an M.B.A. in Finance from the Wharton School of the University of Pennsylvania and a B.S.B.A. in Finance from Georgetown University. Ed is a member of Brandywine Global's Executive Board.

Rastislav Berlansky, CFA
Portfolio Manager

Rasto is a portfolio manager and securities analyst for the Absolute Value Equity portfolios. His experience in private equity proves valuable in the estimation of the intrinsic value of a business enterprise, and he is particularly adept at interpreting complex accounting structures. Rasto joined the firm in 2003. Previously, he was an analyst with LLR Partners, Inc., a leading private equity firm (2000-2003), and a senior associate for PricewaterhouseCoopers, LLP (1998-2000) in its corporate valuation group. Rasto is a CFA charterholder and earned a B.S. in Business Administration from Villanova University in 1998, graduating summa cum laude.

Gregory P. Manley, CFA
Portfolio Manager/Research Analyst

Greg is a portfolio manager for our Domestic Microcap strategy and provides research support for the other Absolute Value Equity portfolios. He uses a blend of fundamental and quantitative analysis to identify undervalued assets and businesses that have the potential to return to a more appropriate valuation. During his career at Brandywine Global, Greg has served as a fundamental and quantitative analyst as well as the lead trader for the Diversified Value Equity portfolios. This diverse experience has helped him develop a unique skill set and a fresh approach to value investing. Greg joined the firm in 2000. Previously, he was with Trinity Investment Management as a securities trader (1996-2000). Greg holds the Chartered Financial Analyst designation and earned a B.A. in Accounting from Pennsylvania State University. He is a member of the CFA Society of Philadelphia and the CFA Institute.

William M. Roach
Group Product Specialist

Bill is the group product specialist for the firm's Absolute Value Equity portfolios. As an investment professional in this role, he is the primary point of contact for selected accounts and provides administrative support to the investment team. Bill joined the firm in 2003, bringing with him 24 years of industry experience. Previously, he was a senior investment analyst for The Vanguard Group (2000-2003); senior equity analyst for DuPont Capital Management (1996-1999); partner/portfolio manager/analyst & director of marketing for Cashman, Farrell & Associates (1990-1996); portfolio manager & vice president for Smith Affiliated Capital Corp. (1989-1990); senior portfolio manager and vice president of marketing for Hutton Capital Management (1986-1989); account executive for Merrill Lynch, Pierce, Fenner and Smith & Thomson McKinnon Securities (1982-1986), and controller for Bill Rodgers & Co. (1979-1982). Bill graduated cum laude with a B.A. in Political Science from Boston College.

Eric S. Jacobson
Research Analyst

Eric serves as a research analyst for our Absolute Value Equity portfolios. His approach can best be described as contrarian, searching for companies with long track records that are trading at a discount to their intrinsic value. Eric joined the firm in August 2005. Previously, he was with Franklin Templeton Investments as an analyst (2001-2005); Decision Resources, Inc. as an analyst and research program manager (1997-1999), and Caro Research, Inc. as a research assistant (1996-1997). Eric earned an M.B.A. in Finance and Health Care Management from the Wharton School at the University of Pennsylvania and a B.A. in both Economics and History from Washington University.

Michael W. Shergalis
Research Analyst

Mike serves as a research analyst for our Absolute Value Equity portfolios. His investment approach reflects his background in private market analysis, assessing the value of a business to a strategic or financial buyer. Based on this approach, Mike surveys the investment landscape looking for significant market misjudgment while always seeking a margin of safety. He joined the firm in June 2005, bringing with him 13 years of industry experience. Previously, Mike was a founding member of Dunmore Advisors, LLC (2002-2005); an equity research analyst with Iridian Asset Management LLC (2000-2002); manager of corporate valuations with Pricewaterhouse Coopers LLC (1998-2000); a senior associate with Coopers & Lybrand LLP (1994-1998), and a financial analyst with MAC Financial Valuation/MAC Advisors, Inc. (1993-1994). He earned a B.A. in Economics from the University of Pennsylvania.

John R. Edelman
Equity Trader

John is the lead trader for the firm's Absolute Value Equity portfolios and a primary trader for the Wealth Management Group channel. He is also responsible for providing support to the Diversified Value Equity portfolios. John joined the firm in 1999, bringing with him nine years of industry experience. Previously, he was with Southcoast Capital as an institutional equity trader (1996-1999), and PNC Bank as a financial analyst (1989-1996). John earned an M.B.A. in Finance from St. Joseph's University and a B.A. in Finance and Accounting from Lehigh University.