Aristotle Capital Boston, LLC, a reputable investment advisor, has released its Q2 2026 investor letter for its ‘Small Cap Equity Fund’. The Fund’s performance during the second quarter of 2026 was impressive, with a return of 13.69%. Despite trailing the Russell 2000 Index’s 21.49% gain, the Fund’s security selection in information technology and industrials had a significant impact on performance.

Top contributors to the Fund’s performance included MACOM Technology Solutions and Mercury Systems, which benefited from strong demand in the semiconductor, aerospace, and defense markets. On the other hand, Alamos Gold and Huron Consulting Group detracted from the Fund’s performance due to operational challenges, weaker gold prices, and investor concerns surrounding artificial intelligence disruption.

During the quarter, the fund initiated positions in IPG Photonics and UMB Financial, citing opportunities tied to advanced manufacturing, automation, reshoring trends, and diversified financial services. The fund also exited Americold Realty Trust, Byline Bancorp, and Verra Mobility, a provider of automated enforcement, tolling, and parking technologies and solutions.

Why Verra Mobility’s Customer Contract Loss Changed the Investment Case

The fund exited its position in Verra Mobility after the loss of a significant customer contract, which materially changed the investment thesis. This loss reduced confidence in the company’s long-term earnings and growth outlook. The proceeds from the exited position were redeployed into higher-conviction opportunities.

Verra Mobility provides smart mobility technology and transportation solutions for commercial fleets, government programs, and parking management. The company’s stock has shown significant fluctuations over the last 52 weeks, trading between $3.4000 and $25.56500. As of August 19, 2026, Verra Mobility’s stock closed at approximately $4.500 per share, with a market capitalization of about $709.74 million.

Aristotle Small Cap Equity Fund remains constructive on U.S. small-cap equities, noting that valuations remain attractive relative to large caps. The fund expects earnings growth to accelerate into late 2026 and 2027, driven by factors such as increased merger and acquisition activity, improving domestic manufacturing due to reshoring and infrastructure investments, and a favorable regulatory environment.