Earnest Partners reviews small‑to‑mid‑cap strategy, says firm remains employee‑owned after 20 years managing plan assets

Trey Greer, a partner with Earnest Partners, updated the board of the Oklahoma City Employees Retirement System on May 8, 2025, saying Earnest has managed the plan's small‑to‑mid‑cap allocation since February 2003 and oversees roughly $50,000,000—about 5% of the system's overall portfolio.

Greer said Earnest remains an employee‑owned firm and emphasized that ownership affects how the firm manages risk and staff incentives. "We're an employee owned firm, which we think brings with it a lot of advantages in terms of just overall motivation of the employees and stakeholders," he said. He described Earnest's investment approach as a bottom‑up, fundamental stock‑picking process designed for long horizons: "We really are investors, not traders," he said, noting typical portfolio turnover of about 20% and a 10‑person investment team.

Greer told trustees that small‑cap and small‑to‑mid‑cap equities have lagged larger peers amid market uncertainty and tariff‑driven volatility. He said small caps are trading at a notable discount versus historical norms—"about 20 or 25% on most metrics"—and that the current cycle has produced an extended period of underperformance. He added the strategy seeks roughly 60 undervalued companies in a diversified portfolio and that recent turnover was below average, about 15% in the past year.

On recent performance, Greer said the portfolio slightly outperformed its Russell 2500 Value benchmark for the first quarter and was modestly ahead year‑to‑date through the day before the meeting. He reiterated the firm's emphasis on managing downside risk: "When you outperform over the long term, a lot of what drives outperformance is not necessarily the things you do really well, but it's the things you avoid."

Trustees asked no substantive follow‑up questions about the portfolio, and no board action was required. Chair thanked Greer for the presentation.