The curated database of hedge funds that publish investor letters. Research by geography, strategy, and schools of thought.
| # | Fund | Strategy | Style | Geography | AUM | Latest Letter |
|---|---|---|---|---|---|---|
The Baird Small/Mid Cap Growth strategy returned 17.7% net in Q2 2026, underperforming the Russell 2500 Growth Index's 24.0% return primarily due to factor exposures as high volatility, high beta, high momentum stocks significantly outperformed. AI remained the dominant investment theme, with hyperscale cloud providers increasing capital spending on data centers and infrastructure, driving historic semiconductor gains. The manager actively repositioned the portfolio, adding data center infrastructure exposure through AAON, Modine, Generac, and Centuri, while increasing software exposure with Agilysys. Consumer discretionary contributed positively with strong performance from Victoria's Secret, Crocs, and Kontoor Brands. The manager added three commercial-stage therapeutics companies to healthcare exposure. While acknowledging that rapidly rising AI expectations and concentrated market leadership suggest building risk, the manager is encouraged by broadening market participation beyond semiconductors. The philosophy remains unchanged: seeking high-quality businesses with durable competitive advantages while maintaining discipline and balancing opportunity against risk to produce better long-term investment outcomes.
The Baird Small/Mid Cap Growth strategy invests in high-quality, small and mid-cap growth companies with durable competitive advantages, attractive long-term growth opportunities, and capable management teams that can create value through changing market environments, maintaining discipline by balancing opportunity against risk rather than attempting to time market tops.
The manager maintains an optimistic but cautious outlook, believing AI has potential to create substantial long-term value across many industries while acknowledging that rapidly rising expectations and concentrated market leadership suggest risk is building in certain areas. The manager is encouraged by broadening market participation beyond semiconductors and data center infrastructure, which typically creates a healthier environment where company fundamentals play a larger role in determining outcomes. The philosophy remains unchanged, continuing to seek high-quality businesses with durable competitive advantages, attractive long-term growth opportunities, and capable management teams, with daily focus on improving portfolio quality and strengthening the risk/return profile.
As of Aug 26, 2026
Jonathan Good serves as Managing Director and Senior Portfolio Manager, bringing 27 years of investment experience to the fund. Good joined Baird in 2006 after working at Gartmore Global Investments as an equity analyst for their Global Health Sciences Fund and at William Blair & Company covering Biotech, Lifesciences, Diagnostics, and Orthopedics sectors. He holds a degree in Applied and Biomedical Sciences from the University of Pennsylvania and an MBA from Northwestern University's Kellogg School of Management.
The fund employs a high-conviction portfolio approach with 45-55 stocks, emphasizing fundamental, bottom-up research to discover unique secular growth stories. Investment decisions are guided by 'PRIME' factors: Durable Profitability, Sustainable Revenue Growth, Favorable Industry Dynamics, Management Quality, and market Expectations. The strategy targets small- and mid-capitalization companies with market capitalizations between $500 million and $15 billion, seeking to provide superior-to-market returns over a 3-5 year time horizon versus the Russell 2500 Growth Index.
Lead Portfolio Manager
Moderate Conviction Bullish
Market Conviction
The letter demonstrates moderate conviction through active portfolio management with multiple named positions and specific investment theses. The manager names approximately 30+ individual holdings with varying levels of detail, discusses specific reasons for additions (Agilysys, AAON, Modine, Generac, Centuri, MDA Space, three therapeutics names) and exits (Wingstop, BJ's, multiple industrials and healthcare names), and provides clear rationales for each decision. However, the portfolio appears diversified across multiple sectors (consumer, technology, industrials, healthcare) with no single concentrated thesis. The language includes hedging ('we believe there could be a reversal' but 'timing remains difficult to predict') and multiple scenario considerations. The manager emphasizes maintaining discipline and balancing risk rather than expressing extreme conviction in any single theme. The combination of named positions with specific theses but diversified exposure and hedged language warrants a moderate conviction score in the 0.55-0.74 range, landing at 0.62.
Growth Outlook
Manager acknowledges macro backdrop is clearly more complex with geopolitical risk, uncertain interest rates, and expects further volatility. However, maintains constructive view on using volatility opportunistically and sees attractive risk/reward in current holdings.
Risk Appetite
Portfolio remains fully invested with active position additions across multiple sectors. Added 12 new positions during the quarter while maintaining diversified exposure. No indication of defensive positioning or cash raising despite macro concerns.
Capital Deployment
The manager engaged in significant capital rotation during Q2 2026, with multiple position exits (Wingstop, BJ's, Comfort Systems, EMCOR, Kratos, Kadant, Watsco, Hubbell, Insmed, TransMedics, Bio-Techne) funding multiple new position additions (Ollie's, Crocs, Agilysys, Centuri, AAON, Modine, Generac, MDA Space, Ascendis Pharma, Axsome Therapeutics, Alkermes). The manager also trimmed a winner (Vita Coco). However, there is no explicit discussion of cash level changes or net exposure changes. The activity described appears to be capital rotation—selling positions to fund new ideas—rather than net deployment of cash or net de-risking. The phrase 'replacing that capital with new ideas' explicitly indicates rotation. Without evidence of cash levels declining or net exposure increasing, this activity scores in the neutral to mildly positive range at 0.25, reflecting active rebalancing but not net new capital deployment.
Forward Guidance
Manager expresses goal to use periods of volatility opportunistically to enhance portfolio fundamentals. Forward-looking language is constructive but measured, acknowledging complexity while maintaining deployment bias.
Language Signal
The letter contains balanced directional language with both bullish and bearish elements. Bullish language includes 'attractive opportunity,' 'improving revenue growth prospects,' 'promising growth potential,' 'positioned to benefit,' 'structural expansion,' and 'healthier environment.' Bearish language includes 'risk is building,' 'rapidly rising expectations,' 'increasingly concentrated market leadership,' 'weakened investment thesis,' 'rising competitive concerns,' and 'difficult to predict.' The manager uses cautious framing around AI speculation and market concentration while expressing optimism about specific company opportunities. The net balance leans slightly positive given the active addition of new positions and constructive framing of broadening market participation, but the significant risk language prevents a higher score.
Perceived Risk
Manager identifies multiple specific risks including geopolitical conflict, oil price spikes, inflation concerns, and uncertain interest rate path. Expects further volatility and significant stock price swings. Risk discussion is meaningful but not alarmist.
Opportunity Density
The manager demonstrates a selective but reasonably abundant opportunity set. The letter describes adding 11+ new positions across multiple sectors (data center infrastructure, software, space, therapeutics, consumer) with specific investment theses for each. The manager states 'performance has begun to broaden beyond the narrow group of semiconductor and data center infrastructure companies' and that 'a broader market typically creates a healthier environment' where 'company fundamentals play a larger role.' However, the manager also emphasizes 'maintaining discipline' and 'balancing opportunity against risk,' suggesting selectivity is required. The combination of multiple new ideas across diverse sectors with emphasis on selectivity and discipline indicates a moderately abundant opportunity set in defined areas, warranting a score in the 0.55-0.79 range at 0.65.
Time Horizon
The manager demonstrates a multi-year investment horizon with limited near-term catalyst dependency. The letter emphasizes 'long-term value,' 'long-term growth opportunities,' 'attractive long-term returns,' and 'better long-term investment outcomes' throughout. For Crocs, the manager expects 'double-digit earnings growth over the next several years.' For data center infrastructure, the manager discusses 'long-term increase in demand' and 'duration and magnitude of demand.' For MDA Space, the manager describes 'structural expansion in the space economy' as a long-term theme. The manager explicitly states 'we are not attempting to identify a market top' and focuses on 'maintaining discipline' for long-term outcomes rather than trading near-term events. However, the letter also discusses quarterly results, factor exposures, and some catalyst-driven positioning (e.g., Centuri's 'record backlog points to earnings growth well above current expectations'). The combination of explicit multi-year language with some quarterly monitoring warrants a score in the 0.65-0.84 range at 0.70, reflecting a multi-year thesis with moderate catalyst awareness.
Top Conviction Themes
Key Catalysts
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