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 |
|---|---|---|---|---|---|---|
As of Aug 14, 2026
Baron Generational Growth Fund declined 2.51% in Q2 2026, trailing the Russell 2000 Growth Index which gained 25.71%, as portfolio-level earnings grew at mid-teens rates but were offset by severe valuation compression. Investors rotated from high-quality stocks into riskier businesses in a historically notable shift, with the Earnings Quality factor performance in the 98th percentile since 1975. The portfolio, concentrated in founder-led businesses with recurring revenue and strong competitive advantages, now trades at a 25% discount to its 5-year average valuation and 36% discount to its 10-year average despite profitability being meaningfully above historical levels. Key headwinds included P&C insurance market softening affecting Arch Capital and Kinsale Capital, and AI disruption fears compressing valuations of information services holdings by 43% despite 22% profit growth. Management teams have responded by more than doubling share repurchases. The manager views current valuations as extremely attractive and expects the combination of continued earnings growth and multiple expansion to drive strong future returns as the market recognizes the quality embedded in the portfolio.
The Fund invests in high-quality, founder-led businesses with sustainable competitive advantages, recurring revenue, strong margins, and excellent free cash flow conversion that are currently experiencing severe valuation compression despite mid-teens earnings growth, creating an exceptional long-term buying opportunity.
The manager is confident that the market will ultimately recognize the dramatic divergence between the quality growth prospects embedded in the portfolio and its compelling valuation. They expect investments to benefit from the combination of earnings growth and multiple expansion as stock prices again trade closer to fundamentals. The portfolio is viewed as extremely attractively valued, trading at significant discounts to historical averages despite profitability, cash generation, and returns on capital being meaningfully above historical levels.
High Conviction Bullish
Market Conviction
Growth Outlook
Risk Appetite
Capital Deployment
Forward Guidance
Language Signal
Perceived Risk
Opportunity Density
Time Horizon
Top Conviction Themes
Key Catalysts
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