In this episode of CIO Perspectives, Sid Ahl and Erika Pagel speak with Lauren Taylor Wolfe, co-founder and managing partner of Impactive Capital, a $3 billion active impact investing firm. Lauren explains her journey of active investing in smaller companies, emphasizing value and sustainability. She discusses the challenges and opportunities in the small-cap space, which has been underperforming amid a market dominated by mega-cap tech stocks and AI-driven momentum. She also shares her optimism about the robust pipeline of investment opportunities in sectors like health care, consumer and industrial markets. PREVIOUS EPISODECIO Perspectives Podcast:Powering the AI Boom, Investing in Aerospace, and a Surge in Drug Innovation Listen now The views and opinions expressed in this podcast are those of the speaker(s) and do not necessarily reflect those of Brown Advisory. These views are not intended to be and should not be relied upon as investment advice and are not intended to be a forecast of future events or a guarantee of future results. The information provided in this podcast is not intended to be and should not be considered a recommendation or suggestion to engage in or refrain from a particular course of action or to make or hold a particular investment or pursue a particular investment strategy, including whether or not to buy, sell, or hold any of the securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. To the extent specific securities are mentioned, they have been selected by the author on an objective basis to illustrate views expressed in the commentary and do not represent all of the securities purchased, sold or recommended for advisory clients. The information contained herein has been prepared from sources believed reliable but is not guaranteed by us as to its timeliness or accuracy and is not a complete summary or statement of all available data. This piece is intended solely for our clients and prospective clients, is for informational purposes only, and is not individually tailored for or directed to any particular client or prospective client.Alternative Investments may be available for Qualified Purchasers and/or Accredited Investors only. ESG considerations are one of multiple informational inputs into the investment process, alongside data on traditional financial factors, and so are not the sole driver of decision-making. ESG analysis may not be performed for every holding in every strategy.ESG considerations that are material will vary by investment style, sector/industry, market trends and client objectives. Certain strategies seek to identify companies that Brown Advisory believes may have desirable ESG outcomes, but investors may differ in their views of what constitutes positive or negative ESG outcomes. As a result, certain strategies may invest in companies that do not reflect the beliefs and values of any particular investor. These strategies may also invest in companies that would otherwise be screened out of other ESG oriented funds. Security selection will be impacted by the combined focus on ESG assessments and forecasts of return and risk. Certain Strategies intend to invest in companies with measurable ESG outcomes, as determined by Brown Advisory, and seek to screen out particular companies and industries. Brown Advisory relies on third parties to provide data and screening tools. There is no assurance that this information will be accurate or complete or that it will properly exclude all applicable securities. Investments selected using these tools may perform differently than as forecasted due to the factors incorporated into the screening process, changes from historical trends, and issues in the construction and implementation of the screens (including, but not limited to, software issues and other technological issues). There is no guarantee that Brown Advisory’s use of these tools will result in effective investment decisions. The Russell 2000® Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000® Growth Index measures the performance of the small-cap growth segment of the US equity universe. The Russell 2000® Value Index measures the performance of the small- cap value segment of the U.S. equity universe. The Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell ® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data and no party may rely on any Russell Indexes and/or Russell ratings and / or underlying data contained in this communication. No further distribution of Russell data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communicationThe S&P 500® Index represents the large-cap segment of the U.S. equity markets and consists of approximately 500 leading companies in leading industries of the U.S. economy. Criteria evaluated include market capitalization, financial viability, liquidity, public float, sector representation and corporate structure. An index constituent must also be considered a U.S. company. These trademarks have been licensed to S&P Dow Jones Indices LLC. S&P, Dow Jones Indices LLC, Dow Jones, S&P and their respective affiliates (collectively "S&P Dow Jones Indices") do not sponsor, endorse, sell, or promote any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. This document does not constitute an offer of services in jurisdictions where S&P Dow Jones Indices does not have the necessary licenses. S&P Dow Jones Indices receives compensation in connection with licensing its indices to third parties.Definitions:Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is a measure of core corporate profitability. EBITDA is calculated by adding interest, tax, depreciation, and amortization expenses to net income.Free cash flow (FCF) is a company's available cash repaid to creditors and as dividends and interest to investors. Management and investors use free cash flow as a measure of a company's financial health.Free cash flow yield is a financial solvency ratio that compares the free cash flow per share a company is expected to earn against its market value per share. The ratio is calculated by taking the free cash flow per share divided by the current share price.Alpha is a measure of performance on a risk-adjusted basis. Alpha takes the volatility (price risk) of the fund and compares its risk-adjusted performance to a benchmark index.Beta represents the slope of the regression of the fund’s monthly returns vs. the benchmark. This is a measure of sensitivity to the market (benchmark). A lower number indicates a lesser reliance on market returns to generate overall fund returns.