The curated database of hedge funds that publish investor letters. Research by geography, strategy, and schools of thought.
| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
The Aristotle Small/Mid Cap Equity Fund returned 9.89% in Q2 2026, underperforming the Russell 2500 Index's 20.26% return as the small/mid-cap market delivered its strongest quarterly performance since 2020. The fund's underperformance was driven primarily by security selection in information technology, where the fund owned Everforth but did not own high-flying names like SanDisk or quantum computing and non-earning SaaS companies that rallied sharply. Overweight allocations to materials and energy also detracted. Contributors included MACOM Technology Solutions and Mercury Systems, both benefiting from strong demand in data center, defense, and 5G end markets. The fund added three new positions during the quarter: Jones Lang LaSalle in commercial real estate services, and regional banks UMB Financial and WesBanco. The manager remains constructive on the long-term outlook for small/mid-caps, citing attractive valuations near multi-decade lows relative to large caps and expectations for earnings growth to surpass large caps by late 2026/early 2027. Near-term caution is warranted given geopolitical risks and election uncertainty, though longer-term tailwinds include increasing M&A activity, reshoring, infrastructure investment, and favorable regulatory changes.
The Aristotle Small/Mid Cap Equity Fund employs a bottom-up, quality-focused approach to identify attractively valued small and mid-cap companies with durable competitive advantages and long-term growth potential, maintaining a patient, low-turnover investment strategy focused on long-term business fundamentals rather than short-term market movements.
The manager remains constructive on the long-term outlook for the small/mid-cap segment, citing attractive valuations with the Russell 2500 Index trading near multi-decade lows relative to large caps and reaccelerating earnings. Near-term caution is warranted due to geopolitical risks including the Iran conflict and mid-term election uncertainty, though the latter has historically given way to durable small cap recoveries. Longer-term tailwinds include increasing M&A activity, reshoring, infrastructure investment, and a more favorable regulatory and tariff backdrop.
As of Aug 10, 2026
Howard Gleicher, CFA, serves as CEO and Chief Investment Officer with over 40 years of investment experience beginning in 1985. He holds Bachelor's and Master's degrees in Electrical Engineering from Stanford University and an MBA from Harvard University. Gleicher co-founded Metropolitan West Capital Management where he served as CEO/CIO, and previously held roles as Principal/Portfolio Manager at Palley-Needelman Asset Management and Equity Portfolio Manager at PIMCO. The leadership team has worked together for over 25 years with portfolio managers averaging 28 years of investment experience.
Quality Value / Growth
Lead Portfolio Manager
Moderate Conviction Bullish
Market Conviction
The fund holds a diversified portfolio with top 10 holdings representing only 19.09% of assets, suggesting 50+ total positions. Individual positions are discussed with specific theses and the manager provides detailed rationale for holdings like MACOM, Mercury Systems, and the three new bank/real estate additions. However, the language includes hedging ('we believe,' 'should continue,' 'may contribute') and the manager explicitly states they were 'unable to identify compelling opportunities' in consumer discretionary and industrials. The combination of a diversified portfolio, named positions with clear theses, but hedged language and acknowledged selectivity challenges places this in the moderate conviction range.
Growth Outlook
The manager expresses constructive optimism about small/mid cap markets, citing compelling valuations relative to large caps, improving earnings momentum, and structural tailwinds from onshoring and infrastructure investment. However, this is tempered by near-term caution regarding geopolitical risks and election uncertainty.
Risk Appetite
The fund maintains selective positioning with overweights in information technology and materials based on bottom-up views, while remaining underweight consumer discretionary and real estate due to specific risk concerns. The manager is actively adding new positions like Casella and Envista while trimming others like Ciena for better risk/reward opportunities.
Capital Deployment
The fund added three new positions (Jones Lang LaSalle, UMB Financial, WesBanco) and exited two positions (Americold Realty Trust, Verra Mobility) during the quarter. This represents capital rotation rather than net deployment, as proceeds from sales funded new purchases. No cash level data is provided to confirm net deployment or de-risking. The manager's language about 'adding selectively' and sector positioning 'generally not changing significantly' suggests limited net activity. This rotation activity with no evidence of meaningful cash deployment or reduction warrants a score slightly above neutral.
Forward Guidance
The manager plans to take advantage of periods of volatility by adding selectively to certain companies when appropriate, but emphasizes patience and low turnover. The approach is cautious deployment rather than aggressive capital commitment, with positioning driven by bottom-up security selection rather than top-down timing.
Language Signal
The letter contains a mix of directional language. Bullish terms include 'constructive,' 'attractive valuations,' 'reaccelerating earnings,' 'tailwinds,' 'improving,' 'strong demand,' and 'opportunities.' Bearish or cautious language includes 'underperformed,' 'detracted,' 'cautious,' 'risks,' 'elevated volatility,' 'uncertainty,' and 'unable to identify compelling opportunities' in certain sectors. The balance tilts moderately toward constructive language, particularly in the market outlook section, but the significant discussion of risks and the fund's underperformance temper this, resulting in a mildly positive score.
Perceived Risk
The manager identifies specific macro risks including geopolitical tensions from the Iran conflict, related inflationary spillovers, and mid-term election uncertainty. These risks are discussed with meaningful detail and acknowledged as potential sources of elevated volatility, though not characterized as systemic threats.
Opportunity Density
The manager expresses a mixed view on opportunity density. On one hand, they describe the small/mid-cap opportunity set as 'constructive' with 'attractive valuations' and added three new positions. On the other hand, they explicitly state they have been 'unable to identify compelling long-term opportunities' in consumer discretionary and 'unable to identify more compelling long-term opportunities' in industrials that fit their discipline. The language emphasizes selectivity and patience, with opportunities existing but requiring careful screening. This selective environment with pockets of opportunity but acknowledged difficulty in certain sectors warrants a score just below neutral.
Time Horizon
The manager emphasizes 'long-term business fundamentals,' 'patient investment approach,' and 'low turnover' multiple times throughout the letter. They describe holding Mercury Systems through a 'multi-year operational reset' and discuss 'long-term earnings growth and shareholder value' for multiple positions. The manager explicitly states that 'sector positioning generally does not change significantly from quarter to quarter' due to their focus on long-term fundamentals. However, they also discuss near-term catalysts like earnings growth expected by 'late 2026/early 2027' and quarterly monitoring. The emphasis on multi-year theses with some catalyst awareness places this in the multi-year horizon range.
Top Conviction Themes
Key Catalysts
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