Longtime CEO George Davis stepped away from this role in 2021, making way for new CEO Scott McBride. Despite McBride’s nearly two decades at the firm, he continues to hone his strategic vision for this institutionally minded investment boutique and its equity and high-yield mandates. Collaboration and manager retention stand out, in large part because of the team’s high level of firm ownership. It has a team-oriented approach, and its senior leaders are also portfolio managers; this reduces key-person risk. However, its head trader’s specialized expertise introduces moderate key-person dependency.
Hotchkis takes a measured approach to expansion. Although the firm isn't straying from its signature value-investing competency, it is seeking new opportunities to leverage its capabilities, including in collective investment trusts, through model portfolios, and in non-U.S. markets. And the firm’s willingness to protect the integrity of its processes by closing strategies, such as Small Cap Value, shows a commitment to investors’ best interests. Fees don’t stand out for good or ill versus other research-intensive boutiques. Although the firm’s deep-value nature means performance can be volatile at times, patient investors are well served.