Trailer: Who is Aristotle?

Host: Alex Warren, CFA, CAIA

Guest: Catalina Llinás, CFA & Robert Womack

December 6, 2022

Episode Length: 17:00

In the inaugural episode of Aristotle Capital’s “The Power of Patience”, we speak with Catalina Llinás, CFA, Co-Chief Investment Officer of Aristotle Capital and chair of Aristotle’s Investment Risk Committee, and Robert Womack, the Chief Innovation Officer at Aristotle Capital. Catalina and Robert discuss the history of Aristotle, provide a broad overview of the organization and introduce Aristotle’s upcoming podcast series.

We learn more about the long history together of Aristotle’s founders’ and Aristotle’s growth into a family of four independent registered investment advisors, specializing in equity and fixed income portfolio management for institutional and advisory clients worldwide. We also discuss the firm’s mission to help our clients reach their long-term financial goals through active portfolio management using our research-driven investment framework. Finally, we discuss what Catalina and Robert believe has led to the firm’s success in recent years as well as what they believe the future holds for Aristotle.

  • Disclosures (00:00 – 00:30)
  • Episode introduction (00:31 – 01:21)
  • Introduction to the episode’s guests: Catalina Llinás and Robert Womack (01:22 – 03:20)
  • History of Aristotle’s organization (03:21 – 05:54)
  • Aristotle’s purpose and what makes the firm unique (05:55 – 09:25)
  • Keys to Aristotle’s growth and success (09:26 – 11:15)
  • What the future holds for Aristotle (11:16 – 12:52)
  • Preview of upcoming Power of Patience episodes (12:53 – 13:55)
  • Aristotle’s continued growth of Aristotle with the agreement to purchase Pacific Asset Management (13:56 – 16:20)
  • Conclusion (16:21 – 17:00)

Alex Warren: The term Aristotle is used to represent a family of affiliates, which is comprised of Aristotle Capital Management, Aristotle Capital Boston, Aristotle Credit Partners, and Aristotle Atlantic Partners, which collectively operate under a unified platform known as Aristotle. Each firm is an independent investment advisor registered under the Investment Advisors Act of 1940 as amended. Welcome to the Power of Patience, Aristotle’s podcast where we share our views on topics actively explored by investment teams and across our organization. I’m Alex Warren, product specialist at Aristotle Capital, and I’ll be your host today. Coming up on today’s episode, we’ll be speaking with two senior members of the organization, Catalina Llinas, Co-chief Investment Officer, and Rob Womack, Chief Innovation Officer. Both are also members of Aristotle’s operating committee. If you enjoy this podcast, please like and share it on LinkedIn to help us spread the word. Today on the show, we’ll discuss the history of Aristotle, how it’s evolved over the past decade, what makes the firm unique and the future of Aristotle. Without further ado, let’s welcome Catalina and Rob to the show.

Catalina Llinás: Thank you for that introduction. My name is Catalina Llinas and I am Co-Chief Investment Officer. In my role, I wear a few different hats, and so I am the head of the client portfolio management team. I chair our investment risk committee. I also lead our sustainability efforts. For those of you that may be wondering where that accent is from, which I haven’t been able to get rid of, not that I want to, but I was born in Colombia. I grew up there and then I lived for many years in Spain before moving to the U.S. to pursue an MBA in Georgetown University, and that’s where the founders of Aristotle hired me from at my prior firm. So, I have been working with them ever since, pretty much almost 20 years and pretty much my entire career.

Robert Womack: Thanks Alex. It’s a true honor to be part of the inaugural episode of the series. I’m Rob Womack. I’m the Chief Innovation Officer. I’m also a member of the operating committee. I’ve spent my entire career in the financial services industry. My original vision was that I wanted to be solely focused on research in portfolio management. However, during my career, I went down different paths. I’ve held many different titles: portfolio manager, chief lending and operations officer. I headed up institutional client services for a previous entity as well. And ultimately, I started to realize that my passion was people, creating efficiencies, working effectively together and attempting to create a culture in which people work together to create and achieve common success. Here at Aristotle, I focus on ensuring the shared service platform meets the needs of the company, the affiliates, the clients. I hope that I can create a culture of innovation, process improvements, best practices. I’ve worked with the senior leadership team here for an extended period of time, much like Catalina. I’ve been with the group in affiliated entities and prior entities totaling more than 25 years, and I’ve known members of the leadership team for more than 30 years.

Alex Warren: Wonderful. Thank you both. Now, Catalina, you mentioned you’ve been working with the firm’s founder since 2005. Can you elaborate on Aristotle’s history?

Catalina Llinás: Yes. Aristotle Capital Management was founded in 2010, but the same process and philosophy has been implemented for over 20 years, like I mentioned, at a prior firm. And so, what we’ve done is we look at companies managing investments with a quality focus and a long-term perspective. And that’s the way in which we have invested in equities across a global, international and U.S. strategies. Now over the years, we added to our team by selecting wonderful investment team. So, I guess in 2014 is when we were very lucky to get the Aristotle Credit team. That same year we had our Aristotle Boston team, which specializes in small cap, and that was followed a couple years later by the Aristotle Atlantic team, which focuses on growth and core strategies. And so, if you think about it, we have a family of independent affiliates, independent investment teams with their own process, their own philosophy, but they get supported by this shared services platform. And I know that Rob loves our shared services model and he loves the shared services platform. So, I will not steal his standard because he’s looking at me like he wants to talk to us about that part.

Robert Womack: Well, no, I think this is where Catalina and I compliment ourselves very well. We’re very passionate and excited about the business and walking in each day to attempt to make this firm better. And so yeah, our shared service platform consists of all of those other functions other than research that support the organization. Those include compliance, risk, trading, distribution, marketing, IT, corporate administration, every other function other than research. And our effort is to ensure that our affiliate research teams can focus on what they do best, which is focusing on their strategies. Over the past 12 years, we’ve continued to look at reinvesting back into our shared services group. We are proactive and mindful around bringing talent onto the infrastructure. In the last three years, we’ve hired a number of different individuals, whether it be a chief technology officer or managing director of investment operations and director of risk. We’ve established cybersecurity vertical sleeves. We’ve done much proactive reinvestment back into our business to focus on making sure that we can provide the best possible service that we can for our clients.

Alex Warren: Thank you, Rob and Catalina. And Catalina, this question is for you. What is Aristotle’s purpose and what do you believe makes the firm unique?

Catalina Llinás: The reason why we’re unique, it truly goes to a couple of things. So, let’s think from a research perspective. Each of our teams is true to their philosophies and investment processes. We have geopolitical change, market volatility, but we are true to what we do and we’re not changing because of changing market conditions. I think that’s one, and that really allows us to achieve that purpose that we talked about and allow our clients to achieve over the long term their individual missions. And the other thing is think about that our frame is actually quite young. And so, we started in 2010, back then with a couple hundred million. We have grown assets substantially, but in terms of employees, we had… Rob, what was it when we started? I’m forgetting that.

Robert Womack: Less than 30.

Catalina Llinás: Less than 30 people, and now we have more than 150.

Alex Warren: Wow.

Catalina Llinás: And so, you have to balance two things when you have all these number of employees joining. First is you need to be able to be open to new ideas. And employees bring such diversity of thought, and so you have to be open to that. But at the same time, we are who we are because we have always stayed true to our values. And so, reinforcing those values has been one of the things we’ve tried to do as employees have joined the firm. And so, our values start with we place our clients’ interests first. First and foremost is the client, and we should ask that question every day: “Is this in the best interest of our clients?” Number two is to act always with integrity, which sounds very obvious, but it’s good to remind everybody. Our integrity, we cannot ever compromise it. Then we achieve excellence through collaboration and this is important. We want our different areas to work with each other, not to point figures. And so, collaboration and accountability. We will make mistakes. Let’s say, yes, we made a mistake, how can we get better to move on? The other value is we want to empower our employees to bring new ideas, innovation and be open to that. And then obviously being respectful with each other. And last but not least, truly valuing our community. And so, making sure that we continuously emphasize these values, I think it also will be key as we continue to grow forward.

Robert Womack: And we want to make sure that that DNA is held in every person across that organization regardless of what their role is. Our focus is knowing that our effort is to enable our clients to achieve their individual missions, as Catalina has talked about, and our focus is on the clients. We have a fiduciary responsibility to them. We’re continuing to assess and build our infrastructure. We are open to continuing to evolve and create best practices to best serve our clients in the organization. We proactively work to make changes not get complacent. We feel we want to compete with ourselves internally to seek to raise the bar every day to become better. Another area that we’re very focused on is recruiting, developing and retaining outstanding talent. We’re very mindful about the job recs that we post. We’re very diligent in processing and evaluating those people. We have a number of different people across the organization interview them before they become part of our family, and our focus there is ensuring that they share our common values too. That they’re comfortable stepping into the gray and speaking about what they bring to Aristotle from their previous experiences and ways to implement that to help improve the client experience.

Alex Warren: Absolutely. No, that makes sense. Now, Rob, if you don’t mind me asking, what do you believe has been key to Aristotle’s growth and success over the years?

Robert Womack: A consistent answer I’ve given in a lot of questions that you’ve asked and a lot of topics that we’ve talked about is the people. And it’s lots of different groups of people. We have a leadership team that’s been together for an extended period of time through market cycles. They’ve been instrumental in helping us build this sustainable long-term business through numerous types of cycles. This has allowed our affiliates to focus on their long-term strategic goals rather than short-term trends. We invest in our organization; we invest in our employees and our people. And from that perspective, we know that our work isn’t done. We are very proud of our shared service infrastructure. More than 50% of our employees within shared service are represented by women and minorities, but our work’s not yet done. We have a DEI council that we established a few years ago. They’re committed to promoting a diverse, equitable and inclusive culture here at our firm, and we believe in those diverse experiences helping us make better decisions and helping us better support our clients.

Catalina Llinás: When I first joined this organization from a prior firm, I remember thinking… And at that time, I moved to Newport Beach, California, which is a little bit more suburban than… It’s not L.A and… I remember thinking it was a small firm of individuals, but I remember telling the amount of languages we spoke or represented in terms of nationalities and it was over 10. I’m like, oh, here we have 30 people or so back in 2005, and there’s all these languages. And I love languages, and so I’m always thinking about the world and I don’t know, exposure to different cultures. So that’s fun, something we continue to do and do better.

Alex Warren: Absolutely. That makes sense. What do you believe the future holds for Aristotle?

Catalina Llinás: The future is bright. I’m excited. We continue to hire this amazing talent, individuals that are joining and making our organization better and allowing our investment teams to focus on research by everybody else taking care of the rest. Rob was talking about cybersecurity. We didn’t have a cybersecurity team. We all had to be in charge and we still are. We all have to be careful about cybersecurity, but now we have a whole team of cybersecurity. Our operations team has grown substantially. We have really invested in the depth of those areas that will ultimately allow our investment teams to continue focusing on research so that we can give our clients best possible service and also enable them to achieve, as I said, their individual mission. So, I am excited. I think we are just getting started.

Robert Womack: I think obviously these last few years, it’s been a constant change in terms of how people work, how they interact, how they connect with clients. And from our standpoint, we’ve been very proactive in making changes to the way we do things to continue to best service our clients. We’re very proud of the longstanding relationship we have with many of our clients. We have clients that have continued to reinvest and commit additional proceeds to Aristotle across other affiliates and other strategies, and we’re very proud of those long-term relationships. We feel that as long as we focus on our fiduciary responsibility to our clients, that will resonate in the marketplace and they’ll appreciate that approach and we can continue to grow together.

Alex Warren: Now Catalina, this podcast is the beginning of a series of interviews across the organization. Can you tell us about some of the topics Aristotle plans to dive into?

Catalina Llinás: Yes, but we’re not going to give you too much details. Don’t want to ruin the surprise, but this is exciting. We’re going to have experts from our shared services department sharing… And we talked a lot about cybersecurity. Well, that is going to be one of the topics. We’re going to talk to compliance and others covering topics that are relevant to the industry. And from our research perspective, we have really exciting topics such as the energy transition, electric vehicles versus combustion vehicles, cloud computing, and much more. And so, it’ll be really great to show the world what our analysts and investment teams are thinking from a long-term perspective,

Robert Womack: And I don’t know if we’ve said it yet, but certainly we feel we are a family. Our office is about our Aristotle family. So, I think it’s exceptional that the others will be able to gain an appreciation for what we believe are fabulous people that we have here that are all rowing in the same direction to help achieve success for our client.

Alex Warren: Rob, I have one last question for you. I understand Aristotle is growing. Can you talk about the purchase of Pacific Asset Management?

Robert Womack: Sure. First, let me start by saying Aristotle is very careful in evaluating and looking at opportunities out in the marketplace. We’re very mindful of that. No different than the way we look to bring on additional team members to our firm. We look at it in the same manner of strategic acquisitions or affiliate startups. We’re looking at making sure there’s a strong cultural fit. So yes, as we approached the end of 2022, we were very happy to announce our planned acquisition of Pacific Life’s third-party credit asset management firm, Pacific Asset Management, whose clients include the Pacific Funds. As part of that transaction, Pacific Life also is going to be a partner within Aristotle moving forward, a strategic partner for us in helping all of us achieve our common goals. Ultimately, when this acquisition closes, which we hope is in the early part of 2023, Pacific Asset Management will be known as Aristotle Pacific Capital as we move forward. But I think the huge focus of PAM, we were so surprised when we started meeting the executive management team and then ultimately meeting everybody within the organization, how there was such commonality behind what they believed in. They believe themselves as being a fiduciary, focusing on clients, culture, principles, all of these things that were very complimentary with what we had built. A number of the executive management team has known members of Pacific Asset Management for an extended period of time. We’ve respected and admired what they’ve built since the late… I think it was 2008 is when they began. And so, it was very complimentary when we started looking at what they’ve created versus what we have. And certainly this helps move us forward in terms of diversifying our asset base, but it’s really all about what it provides to the clients. And it provides us a broadened menu of products that we feel are exciting and appropriate for the marketplace.

Catalina Llinás: I would say over the last years, we’ve been known as an equity manager that has some fixed income capabilities, but now Aristotle is going to be known as equity and fixed income manager, and that’s going to be great because our clients will be able to get probably all of their needs met by us. So, it’s exciting.

Alex Warren: That brings us to the end of this episode. Thank you so much Catalina and Rob for joining us today. We hope you enjoyed it and learned more about Aristotle. Thank for listening to the Power of Patience. To learn more about Aristotle, please visit www.aristotlecap.com, or follow the link to the show notes. If you enjoyed the show, please rate and review us on Spotify and Apple Podcasts. Be sure to come back next time for a discussion on why quality matters in an inflationary environment with Aristotle Capital Managing Director, Aylon Ben-Shlomo. Until then, this is Alex Warren, and thank you for listening.


For additional disclosures please refer to www.aristotlecap.com