Large Cap Growth 2Q 2019 Commentary Markets Review Performance and Attribution Summary Markets (total return) performed as follows: For the second quarter of 2019, Aristotle Atlantic’s Large Cap Growth Composite posted a total return of 6.48% gross of fees (6.23% net of fees), outperforming the 4.64% total return of the Index Returns Russell 1000 Growth Index. Since its inception on November 1, Year to Date 2019 2016, the Large Cap Growth Composite has posted a total return of 21.87% gross of fees (21.33% net of fees), while the Russell 1000 WTI Crude Oil 28.76 Growth Index has registered a total return of 19.63%. Russell 1000 Growth Index 21.49 Performance Scorecard Composite Index 21.33 Second Quarter 2019 S&P 500 Index 18.54

Russell 2000 Index 16.98 Large Cap Growth Composite, gross 6.48 Russell 1000 Value Index 16.24 Large Cap Growth Composite, net 6.23 Dow Jones Industrial Average 15.40 Russell 1000 Growth Index 4.64 Gold 9.89 Bloomberg Barclays U.S. Aggregate Index 6.11 S&P 500 Index 4.30

3-Month U.S. Treasury Bill 1.24 Russell 1000 Value Index 3.84 0510 15 20 25 30 35 Russell 2000 Index 2.10 Total Return (%) 0 5 10 Total Return (%) Source: FactSet

Past performance is not indicative of future results. Please see important disclosures at the Sources: SS&C Advent; Russell Investments; Standard & Poor’s end of this document. Past performance is not indicative of future results. Returns are presented gross and net of investment advisory fees and include the reinvestment of all income. Aristotle Atlantic Composite returns are preliminary pending final account reconciliation. Please see important U.S. equities posted positive returns during the quarter, although disclosures at the end of this document. gains were more “modest” as compared to those in the first quarter Security selection accounted for the entirety of the strategy’s of 2019. Bonds also rallied, with the Bloomberg Barclays U.S. outperformance relative to the Russell 1000 Growth Index for Aggregate Index increasing 3.08% as long-term interest rates fell. the quarter. Security selection in Health Care and Information Investors who attempted to predict the end of the U.S. equity bull Technology added the most to relative performance. Within each of market (relying on 2018’s returns as the awaited signal) were met these sectors, IDEXX Laboratories, Alteryx and Constellation Brands with yet another positive quarter, with the S&P 500 Index climbing were the main relative contributors, respectively. Conversely, security to an all-time high. Overall, the S&P 500 has gained 18.54% so far selection in Financials and Communication Services detracted from this year, which marks the best first half for the Index in 22 years. relative performance. Within each of these sectors, SVB Financial, Facebook and Alexandria Real Estate were the main relative A myriad of events gathered headlines during the quarter including, detractors, respectively. but not limited to, geopolitical tensions (i.e. Iran – U.S. following Top Five Contributors* Top Five Detractors* oil tankers’ attacks in the Persian Gulf ), potential new tariffs on IDEXX Laboratories SVB Financial Mexican imports, the U.S. decision to place significant restrictions Alteryx Facebook on Chinese telecom-equipment maker Huawei, U.S.-China trade Constellation Brands Alexandria Real Estate Equities relations and potential actions of the Federal Reserve (Fed). In terms of the U.S. and China, while they had seemed to be closer Dollar General Avery Dennison to a trade deal in April, talks broke down abruptly in May, to then Honeywell Raytheon restart again in June. The Fed held rates steady during the quarter, *Securities listed had the best or worst relative performance within the best- or worst- although market expectations for rate cuts continue to increase. performing sectors relative to the benchmark. Past performance is not indicative of future results. Please see important disclosures at the end of this document.

New York | Los Angeles | Newport Beach | Boston 1 2Q 2019 Large Cap Growth Commentary Aristotle Atlantic Partners, LLC

Total Contribution to Relative Return by Sector growth opportunities. Alteryx continues to highlight a $23.5 billion versus Russell 1000 Growth Index TAM (total addressable market) while winning new customers from Second Quarter 2019 old legacy business intelligence providers. Management raised 2019 revenue guidance to a range of 40%-42% growth. Communication Services -0.04 Consumer Discretionary 0.16 A user conference day hosted by Alteryx, along with the announced Consumer Staples 0.23 acquisition of Tableau Software by Salesforce.com, also helped drive Energy 0.06 the stock higher. On June 10th, Salesforce.com announced a deal to Financials -0.12 acquire Tableau. This deal highlights the attractive assets in the data Health Care 0.92 management and analytics business. At the Alteryx investor day, Industrials 0.13 also in June, the company outlined its longer term (four- to six-year) Information Technology 0.71 operating margin target of 35%-40%, several new product feature Materials 0.08 additions and customer testimonials. The customer discussions outlined initial use cases by customers and plans to expand the Real Estate 0.04 number of seats based on satisfaction levels. Utilities 0.00 Cash -0.19 Bottom Detractors -0.5 0.0 0.5 1.0 SVB Financial Group Total Contribution to Relative Return (%) SVB Financial delivered strong overall first quarter 2019 results, with Source: FactSet a solid EPS beat driven by better-than-expected fee income growth, Past performance is not indicative of future results. Attribution results are based on sector solid loan and deposit growth, and strong gains from VC and warrant returns, which are gross of investment advisory fees and include the reinvestment of all income. investments. VC funding activity is expected to remain strong in Please see important disclosures at the end of this document. 2019, and the IPO pipeline remains very solid. Leerink (recently acquired health care-focused investment bank) was profitable in Top Contributors its first full quarter under SVB Financial. Management provided IDEXX Labs updated fiscal year 2019 guidance that included lowered NII/NIM expectations but higher fee income growth (based largely on the IDEXX Labs delivered strong quarterly earnings with 10% organic strong first quarter and strong investment environment). Despite revenue at the company level. The Companion Animal Diagnostic the strong report and outlook, shares of SVB underperformed as business delivered 12% organic growth in recurring revenue, driven investors focused on the lowered NII/NIM outlook, which is largely by strong instrument placements. Over 77% of company revenues driven by lower short-term rates, a flatter yield curve and the Fed are derived from recurring sources (consumables, ref lab, services, seemingly on hold. The sharp decline in Treasury rates during the etc.) so the share’s premium valuation is somewhat supported by quarter fed into these concerns. Due to the decline, SVB shares the annuity-like nature of these revenues. Most importantly, global traded at a discount to peers, but we think a premium seems more Catalyst instrument installed base was up 24% year over year, appropriate given better loan/fee growth, higher profitability and a implying more room to keep growing consumable/service pull moat-like niche focus on the innovation economy. through. International sales force expansion is on track and slightly ahead of expectations, and ramp-up of newer reps should continue Facebook, Inc. to provide an additional revenue tailwind for the company going Fundamentals remained strong for Facebook, as the company forward, in our view. delivered a solid first quarter 2019 earnings report that helped Alteryx, Inc. diminish “worst-case scenario” investor fears about privacy concerns, potentially slowing growth of the mature Facebook platform, Alteryx once again led the way in positive performance contribution and concerns about the future business-mix shift as the company to the portfolio during the second quarter. This was largely driven increases focus on payments and e-commerce. The earnings beat by the first quarter reported revenue that increased 51% year- was driven by improved user growth and engagement metrics, as over-year, well ahead of expectations for a 42% increase. There well as lower-than-expected expenses. Instagram Stories delivered was notable growth in large enterprise customer accounts of 82% another quarter of impressive growth as more users and businesses year-over-year, led by international customers that now account for adopt the platform, which is expected to become a more meaningful 30% of total revenues. The company continues to expand existing contributor to mobile ad growth going forward. Despite the strong relationships, with a 134% net expansion rate. Alteryx finished the quarterly results, shares of Facebook declined sharply at the end of quarter with 4,973 customers, an increase of 277 in the quarter. We the second quarter, in our view largely as a result of an overall risk- have some concerns about potential competitive threats but, based off trade in the market in response to increased investor concerns on the most recent quarterly results, this is not impacting current about slowing global growth.

New York | Los Angeles | Newport Beach | Boston 2 2Q 2019 Large Cap Growth Commentary Aristotle Atlantic Partners, LLC

Recent Portfolio Activity semiconductors and logic devices. In addition to Philips, NXP's customers include Apple, Bosch, Delphi, Ericsson, Nokia, Panasonic, The table below shows all buys and sells completed during the Samsung and Sony. Customers in China account for about a third quarter, followed by a brief rationale. of sales. Buys Sells With over 40% of sales derived from the automotive industry, we Zoom Video Communications Avery Dennison expect NXP to benefit from increasing semiconductor content in NXP Semiconductors cars, potentially growing the business segment’s revenue by 7%-10%, Buys well ahead of overall global auto sales growth in the low single digits. NXP’s end-market diversification provides solid valuation support, Zoom Video Communications, Inc. in our opinion, as NXP Secure Interface and Infrastructure segment Zoom Video Communications develops a people-centric cloud (20% of business) benefits from growth in 5G infrastructure service that transforms real-time collaboration experience. The deployment and IoT product proliferation. Management reiterated company offers a unified meeting experience, a cloud service that achieving 55% gross margins by year-end 2019, a 200 basis point provides a 3-in-1 meeting platform with HD video conferencing, improvement over fourth quarter 2018 results, driven by the mobility and web meetings. Zoom Video Communications serves company’s focus on cost management and improving product mix. customers worldwide. NXP should deliver strong free cash flow, with a focus on returning capital to shareholders. This provides investor support, with We believe Zoom offers access to a large estimated total addressable management committed to return all excess cash to shareholders market of $40 billion for video and telephony communications. The through buybacks and dividends, with buybacks expected to ramp continued shift to mobile and decentralized workforces supports to $2 billion per year. significant multi-year growth opportunities for the current annual revenue run rate of ~$500 million. Zoom’s cloud architecture and Sells technology are a unique competitive advantage, providing higher- Avery Dennison Corporation quality video, built-in security protocols and interoperability among We sold Avery to reduce the portfolio’s weighting in Materials existing equipment; Zoom’s technology should provide years of a competitive moat. The company deploys a multi-pronged ahead of the Russell rebalance at the end of June. We used the marketing strategy that incorporates a “freemium” version, direct proceeds to initiate the position in Zoom Video Communications sales force and channel partners proving effective at driving low- and increase our weight in Information Technology, which is seeing cost adoption. A big advantage of the Zoom offering is ease of use a sector weight increase from the Russell rebalance. We continue and viral user adoption, making video conferencing usage grow and to like the return and growth characteristics of the Information facilitating uptake of product across businesses. Zoom Phone, a new Technology sector, with a focus on software companies. subscription offering launched in January 2019 and not factored into the 2019 outlook, is already seeing strong uptake. Outlook NXP Semiconductors N.V. The equity rally in the second quarter was largely fueled by NXP Semiconductors operates as a global semiconductor company. expectations for an easing cycle by the Fed. Trade tensions continue The company designs semiconductors and software for mobile to be highly unpredictable, with any near-term resolution becoming communications, consumer electronics, security applications, in- increasingly unlikely. U.S. equities have recovered all the lost car entertainment and networking. NXP offers its products to the ground that occurred in the fourth quarter. Since global economies automotive, identification, wireless infrastructure, lighting, mobile continue to exhibit anemic growth, we believe any equity market and computing applications. NXP Semiconductors has a full menu appreciation will largely reflect price-to-earnings multiple expansion of semiconductor chips to choose from. Analog and mixed-signal due to accommodative central bank policy. The U.S. fiscal outlook integrated circuits (ICs) from the unit’s huge product portfolio continues to be hampered by sizable annual deficits, even in periods are used in everything from car radios and automotive networking of full employment and moderately expanding economic activity. systems to notebook computers and wireless base stations. The These uncertainties and increased geopolitical tensions should result company also makes numerous types of general-purpose discrete in a more volatile period for equities.

New York | Los Angeles | Newport Beach | Boston 3 2Q 2019 Large Cap Growth Commentary Aristotle Atlantic Partners, LLC

Aristotle Large Cap Growth Composite Performance All Periods Ended June 30, 2019

30 27.50 27.07

25 21.49 21.87 21.33 19.63 20 16.32 15.68 15 11.56

Total Return (%) Return Total 10 6.48 6.23 4.64 5

0 2Q19 YTD 1 Year Since Inception (11/1/2016)

Large Cap Growth Composite (Gross) Large Cap Growth Composite (Net) Russell 1000 Growth Index

Large Cap Growth Composite Large Cap Growth Composite Russell 1000 Year (Gross %) (Net %) Growth Index (%) 2019 YTD 27.50 27.07 21.49 2018 -0.93 -1.34 -1.51 2017 29.53 28.99 30.21 11/1/16 - 12/31/16 3.49 3.49 3.44

Composite returns for all periods ended June 30, 2019 are preliminary pending fi nal account reconciliation. The opinions expressed herein are those of Aristotle Atlantic Partners, LLC (Aristotle Atlantic) and are subject to change without notice. Past performance is not a guarantee or indicator of future results. This material is not financial advice or an offer to purchase or sell any product. You should not assume that any of the securities transactions, sectors or holdings discussed in this report are or will be profitable, or that recommendations Aristotle Atlantic makes in the future will be profitable or equal the performance of the securities listed in this report. The portfolio characteristics shown relate to the Aristotle Atlantic Large Cap Growth strategy. Not every client’s account will have these characteristics. Aristotle Atlantic reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. There is no assurance that any securities discussed herein will remain in an account’s portfolio at the time you receive this report or that securities sold have not been repurchased. The securities discussed may not represent an account’s entire portfolio and in the aggregate may represent only a small percentage of an account’s portfolio holdings. For a full list of all holdings since the strategy’s inception at Aristotle Atlantic, please contact us at (212) 652-4150. Returns are presented gross and net of investment advisory fees and include the reinvestment of all income. Gross returns will be reduced by fees and other expenses that may be incurred in the management of the account. For example, a 0.5% annual fee deducted quarterly (0.125%) from an account with a ten-year annualized growth rate of 5.0% will produce a net result of 4.4%. Actual performance results will vary from this example. The Russell 1000® Growth Index measures the performance of the large cap growth segment of the U.S. equity universe. It includes those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. This index has been selected as the benchmark and is used for comparison purposes only. The Russell 1000® Value Index measures the performance of the large cap value segment of the U.S. equity universe. It includes those Russell 1000 companies with lower price-to-book ratios and lower expected growth values. The S&P 500® Index is the Standard & Poor’s Composite Index of 500 stocks and is a widely recognized, unmanaged index of common stock prices. The Russell 2000® Index measures the performance of the small cap segment of the U.S. equity universe. The Russell 2000 Index is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2,000 of the smallest securities based on a combination of their market cap and current index membership. The Dow Jones Industrial Average® is a price-weighted measure of 30 U.S. blue-chip companies. The Index covers all industries except transportation and utilities. The NASDAQ Composite Index measures all NASDAQ domestic and international based common type stocks listed on The NASDAQ Stock Market. The NASDAQ Composite includes over 3,000 companies, more than most other stock market indexes. The Bloomberg Barclays U.S. Aggregate Index is an unmanaged index of domestic investment grade bonds, including corporate, government and mortgage-backed securities. The WTI Crude Oil Index is a major trading classification of sweet light crude oil that serves as a major benchmark price for oil consumed in the . The 3-Month U.S. Treasury Bill is a short-term debt obligation backed by the U.S. Treasury Department with a maturity of three months. While stock selection is not governed by quantitative rules, a stock typically is added only if the company has an excellent reputation, demonstrates sustained growth and is of interest to a large number of investors. It is not possible to invest directly in these indices. The volatility (beta) of the Composite may be greater or less than its respective benchmarks. Aristotle Atlantic Partners, LLC is an independent registered investment adviser under the Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Aristotle Atlantic, including our investment strategies, fees and objectives, can be found in our Form ADV Part 2, which is available upon request. AAP-1907-8

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