| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 17.7% | 19.0% | 24.6% |
| 2025 |
|---|
| 24.6% |
Baron Partners Fund delivered exceptional performance in Q4 2025, returning 19.07% versus the Russell Midcap Growth Index decline of 3.70%. For the full year, the fund returned 24.86%, significantly outpacing its benchmark's 8.66% return. The fund's concentrated approach focuses on businesses that can double in value within five to six years, with top 10 positions representing 88.3% of total investments. Performance was driven primarily by Disruptive Growth holdings, including private companies SpaceX and X.AI Holdings, which more than doubled in value. Tesla remains the largest position despite trimming 30.5% for portfolio construction purposes. While some holdings face near-term headwinds from AI disruption concerns and reinvestment cycles, the managers express increasing confidence that these depressed investments will contribute meaningfully as earnings investments are realized and sentiment shifts. The fund maintains diversification across categories including Disruptive Growth, Core Growth, Financials, and Real/Irreplaceable Assets, with leverage at 12.3%.
The fund seeks to invest in businesses that can double in value within five or six years by focusing on appropriately capitalized, well-managed growth businesses with sustainable competitive advantages and strong long-term growth opportunities across market capitalizations.
The fund feels increasingly confident that depressed investments will contribute to performance in the coming years once investments that are penalizing earnings are realized and negative sentiment shifts. The managers expect growth trends to improve as public sector headwinds abate and sales force productivity improves across portfolio companies.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 8 2026 | 2025 Q4 | ACGL, BIRK, CHH, CSGP, FDS, GLPI, GWRE, H, HEI, IDXX, IRDM, IT, LLY, MSCI, MTN, RRR, SCHW, SPOT, TSLA | AI, Concentration, Disruptive Growth, Electric Vehicles, growth, mid cap, Space, technology |
H CSGP SPOT GWRE IT FDS SCHW IDXX RRR |
The fund holds X.AI Holdings Corp., formed through merger of X and xAI, which developed the Grok AI model. xAI rapidly deployed data centers with… |
| Nov 8 2025 | 2025 Q3 | FDS, IDXX, IT, RRR, STUB, TSLA | AI, Autonomy, Data, disruption, Robotics | ANET | The fund emphasizes AI as a major driver of both market sentiment and company fundamentals, highlighted by Teslas rapid autonomous-driving progress and humanoid robotics roadmap.… |
| Aug 18 2025 | 2025 Q2 | ACGL, GLPI, IDXX, MTN, SCHW, SPOT, TSLA | Compounding, Concentration, growth, innovation, volatility | - | The letter emphasizes long-duration growth investing focused on a concentrated set of companies with large addressable markets and durable competitive advantages. Management highlights innovation-driven earnings… |
| Mar 31 2025 | 2025 Q1 | ACGL, CSGP, GWRE, H, HEI, IT, TSLA | - | - | - |
| Dec 31 2024 | 2024 Q4 | ACGL, CSGP, IDXX, SCHW, TSLA | - | - | - |
| Sep 30 2024 | 2024 Q3 | ARCH, BIRK, GWRE, MTN, SCHW, TSLA | - | - | - |
| Jul 27 2024 | 2024 Q2 | ARCH, CSGP, IDXX, MTN, TSLA | - | - | - |
| Apr 15 2024 | 2024 Q1 | ACGL, CSGP, FDS, H, IRDM, TSLA | - | - | - |
| Feb 20 2024 | 2023 Q4 | ACGL, IDXX, IRMD, IT, NEOG, TSLA, XRX | - | - | - |
| Sep 30 2023 | 2023 Q3 | ARCH, CSGP, FDS, GWRE, IRDM, MSCI, TSLA | - | - | - |
| Jun 30 2023 | 2023 Q2 | ACGL, CSGP, FDS, IBKR, MSCI, SCHW, TSLA | - | - | - |
| Mar 31 2023 | 2023 Q1 | ACGL, CSGP, DEI, H, IDXX, ILMN, IRDM, MSCI, SCHW, TSLA | - | - | - |
| Dec 31 2022 | 2022 Q4 | ACGL, CSGP, FIGS, IDXX, SCHW, SPOT, TSLA, VLD, XFCH | - | - | - |
| Sep 30 2022 | 2022 Q3 | ACGL, CSGP, DEI, FIGS, GWRE, H, IRDM, SCHW, TSLA | - | - | - |
| Jun 30 2022 | 2022 Q2 | GLPI, H, IDXX, SCHW, SPOT, TSLA | - | - | - |
| Mar 31 2022 | 2022 Q1 | ACGL, CSGP, IDXX, IRDM, MTN, SCHW, SHOP, SPOT, TSLA | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIAI has become a dominant theme across major equity indices, with Nvidia leading the S&P 500, ASML dominating MSCI EAFE, and TSMC leading emerging markets. The fund benefited from AI-related dynamics, particularly through Samsung's memory products experiencing substantial price increases due to DRAM shortages driven by AI demand. |
Semiconductors Memory DRAM Technology Nvidia |
CloudSnowflake was added as the leading player in cloud data storage, providing comprehensive data warehousing services for large businesses. The company's cloud-native platform helps companies store, analyze and share data across organizations, crucial for AI infrastructure upgrades. |
Data Storage Infrastructure Platform Enterprise | |
Electric VehiclesEV tax incentives were curtailed by July's One Big Beautiful Bill, causing a surge in Q3 sales followed by a sharp Q4 drop. However, EV charging infrastructure remained consistent with over 230,000 publicly available chargers deployed in the US for the first time. |
EV Charging Charging Networks Auto Policy Infrastructure | |
SpaceSpaceX is generating significant value with rapid expansion of Starlink broadband service, deploying vast satellite constellation with substantial user growth. The company has established itself as leading launch provider with reusable technology and is making tremendous progress on Starship rocket. SpaceX represents the fund's largest position at 19.2% of net assets. |
Satellites Launch Starlink Starship Reusable | |
StreamingNetflix has built a durable economic moat around its globally-scaled streaming business. With more than 300 million members, Netflix enjoys the lowest content cost per subscriber in the industry, enabling it to profitably outspend rivals and accelerate its competitive flywheel. |
Content Global Scale Subscription Competitive Moat Media | |
| 2025 Q3 |
AIAI has become a dominant theme across major equity indices, with Nvidia leading the S&P 500, ASML dominating MSCI EAFE, and TSMC leading emerging markets. The fund benefited from AI-related dynamics, particularly through Samsung's memory products experiencing substantial price increases due to DRAM shortages driven by AI demand. |
Semiconductors Memory DRAM Technology Nvidia |
| 2025 Q2 |
Growth |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Nov 8, 2025 | Fund Letters | Ronald Baron, Michael Baron | ANET | Arista Networks, Inc. | Information Technology | Cloud data center networking | Bull | NYSE | AI infrastructure, buybacks, Cloud networking, Ethernet switches, Free Cash Flow, hyperscalers, Margins, secular growth | Login |
| Feb 8, 2026 | Fund Letters | Ronald Baron | H | Hyatt Hotels Corporation | Consumer Discretionary | Hotels, Restaurants & Leisure | Bull | New York Stock Exchange | AssetLight, buybacks, Hotels, Loyalty, RevPAR | Login |
| Feb 8, 2026 | Fund Letters | Ronald Baron | CSGP | CoStar Group, Inc. | Real Estate | Real Estate Management & Development | Bull | NASDAQ | Marketplaces, Optionality, productivity, Real Estate, Salesforce | Login |
| Feb 8, 2026 | Fund Letters | Ronald Baron | SPOT | Spotify Technology S.A. | Communication Services | Interactive Media & Services | Bull | New York Stock Exchange | ARPU, Audio, Margins, Streaming, Subscriptions | Login |
| Feb 8, 2026 | Fund Letters | Ronald Baron | GWRE | Guidewire Software, Inc. | Information Technology | Application Software | Bull | New York Stock Exchange | ARR, cloud, Insurance, Margins, migration | Login |
| Feb 8, 2026 | Fund Letters | Ronald Baron | IT | Gartner, Inc. | Information Technology | IT Consulting & Other Services | Bull | New York Stock Exchange | AI, buybacks, productivity, research, Subscriptions | Login |
| Feb 8, 2026 | Fund Letters | Ronald Baron | FDS | FactSet Research Systems Inc. | Financials | Financial Exchanges & Data | Bull | New York Stock Exchange | AI, analytics, buybacks, Data, Margins, monetization, Recurring, Retention, Workflow | Login |
| Feb 8, 2026 | Fund Letters | Ronald Baron | SCHW | The Charles Schwab Corporation | Financials | Investment Banking & Brokerage | Bull | New York Stock Exchange | Asset flows, Brokerage, Deposits, Funding, guidance, Integration, leverage, NIM, Revisions | Login |
| Feb 8, 2026 | Fund Letters | Ronald Baron | IDXX | IDEXX Laboratories, Inc. | Health Care | Health Care Supplies | Bull | NASDAQ | compounding, diagnostics, franchise, growth, innovation, Margins, Pricing, Secular, Utilization | Login |
| Feb 8, 2026 | Fund Letters | Ronald Baron | RRR | Red Rock Resorts, Inc. | Consumer Discretionary | Casinos & Gaming | Bull | NASDAQ | CapEx, development, Durango, EBITDA, Gaming, Locals, Margins, Roi, Visitation | Login |
| TICKER | COMMENTARY |
|---|---|
| ACGL | Arch's stock rose on strong earnings results and active capital management. Third quarter earnings per share beat Street expectations due to improved underwriting margins and very low catastrophe losses, as there were no landfall hurricanes in the U.S. this season for the first time since 2015. |
| BIRK | Birkenstock Holding plc 3.4 (9.56) (0.39) |
| CHH | Choice Hotels International (CHH) is a leading hotel franchisor with a predominantly asset-light model. |
| CSGP | CoStar Group is a premier information services provider to the commercial and residential real estate industries. For the last few years, we have watched the core businesses under the CoStar umbrella enjoy solid double-digit revenue growth along with consistent margin expansion. However, at the enterprise level, margins have contracted significantly due to the company's large and persistent investment in Homes.com. The results of the company's residential efforts have fallen dramatically short of its long-term expectations. |
| FDS | FactSet provides financial information, data and analytics to the global investment industry through its subscription-based software. While the market is competitive, FactSet boasts over 95% recurring revenue, including deep relationships with fund managers, brokers and wealth management businesses. In 2025, FactSet posted its 45th year of consecutive revenue growth; however, its stock has sold down significantly on fears of potential AI disruption to the business model and demand from a potentially shrinking client base of investment analysts. Management has announced major investments in data and AI infrastructure in 2026, which will come at the expense of short-term margins. We believe this is the right decision. We note the business continues to grow organically, client retention exceeds 95% and senior leadership have been buying shares on-market. The Fund continues to hold shares in FactSet. |
| GWRE | Guidewire is a market leader in next-generation property and casualty insurance software. The company has delivered a strong profit cycle for several years, driven by insurance carrier modernization, and this quarter was consistent with that trend. After outperforming a lagging software sector in the first three quarters, the stock lost some momentum in Q4. We trimmed the position into strength during the year, in line with our valuation discipline, and continue to hold a medium-sized Crop position as valuation assumptions have become more reasonable. |
| H | Shares of global hotelier Hyatt Hotels Corporation increased during the quarter as the company delivered strong revenue per available room and unit growth despite concerns around a weakening macroeconomic environment. Hyatt also reached an agreement with Chase to extend its credit card partnership on improved economic terms, reflecting continued growth in World of Hyatt membership. The company continues to sell owned assets at accretive rates and is redeploying the proceeds through share repurchases. Hyatt maintains an investment-grade balance sheet, and approximately 90% of earnings are generated from fees. Yet the stock trades at a discount to peers despite a comparable growth profile and business mix. We believe this valuation gap should narrow over time as investors gain greater confidence in the durability and resilience of Hyatt's business model. |
| HEI | We've held HEI since early 2021. It's one of those quietly excellent family businesses. The Mendelsons have run it for decades, they own a meaningful stake, and they've built durable niches in aerospace parts and defense electronics. HEI was up 36% in 2025, hitting new highs on strong results across both their Flight Support and Electronic Technologies divisions. They keep doing what they do: disciplined acquisitions, high returns on capital, strong cash generation. |
| IDXX | IDXX continued to demonstrate its high-quality, defensive growth characteristics, posting robust quarterly results driven by consistent demand in its veterinary diagnostics business. |
| IT | Gartner is a global leader in research services, with a long history of delivering valuable insights and data to business and technology leaders. In our view, the company has the best brand in IT research, supported by its scale and a compelling customer value proposition. These advantages have driven a long history of strong organic growth and robust free-cash-flow conversion. The stock price has declined meaningfully from recent highs due to investor concerns surrounding AI-related disruption. We believe these concerns are overstated. In our view, Gartner is well-positioned to reaccelerate organic growth due to continued high customer engagement and the large opportunity to sell to new and existing customers. We took advantage of the opportunity to buy shares in this well-managed company at a bargain price. |
| LLY | Healthcare added meaningfully through Eli Lilly following a deal the company did with the US administration to reduce the price of its GLP-1 drugs in exchange for tariff relief. |
| MSCI | MSCI Inc. 4.3 1.40 (0.02) |
| MTN | Our new largest position, Vail Resorts, is probably the best example of this. I started buying in February, when the stock was in the upper $150s. Unfortunately the stock is now trading at $133 (which I think is an incredible opportunity on the flip side) - I bought more as it fell, but our cost basis is around ~$148, so we are still down a decent bit here. Vail deserves it own write up entirely, but the quick thesis on it is that Vail owns irreplaceable assets with very limited new competition, and is cheap on almost any metric you want to use. |
| RRR | Red Rock Resorts, Inc., a casino owner and operator focused on the Las Vegas Locals market, spent over $800 million developing a new elite property, Durango, for this market. It successfully completed Durango and is now generating robust returns alongside strengthening performance across six core Las Vegas Locals casinos. The company continues to report strong visitation and robust slot and table game play, along with improving activity from uncarded and non-rewards customers. The company's initiative of opening its Durango property is generating robust returns, and performance across the company's six core casinos has strengthened as the Las Vegas Locals market absorbs Durango's extra supply. Given the strength of the market, management continues to ramp up capital investment, which we believe should support ongoing revenue and EBITDA growth over the next several years. The stock appreciated 39.4% in 2025. |
| SCHW | One of the things that works for us is taking ideas we found from other investors – Charles Schwab (SCHW) |
| SPOT | Spotify is the world's leading audio streaming platform. Third-quarter results showed continued operating progress, with users increasing 11% to 713 million and subscribers growing 12% to 281 million. Meanwhile, operating income expanded to a mid-teens margin, alongside a record quarterly free cash flow. Despite the momentum, the shares weakened as investors reset near-term margin expectations. Spotify has been a top contributor to long-term Fund performance, and we remain confident that pricing, product innovation, advertising efficiency, and an expanding ecosystem can continue to widen margins over time, as reinforced this quarter by the launch of Spotify recommendations within ChatGPT. |
| TSLA | The largest 10 companies, by market capitalization, had reached 40.7% of the S&P 500 by the end of 2025, up from roughly 30% at the end of 2021. At the top of this list are Nvidia (NVDA), Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), Broadcom (AVGO), Meta (META), and Tesla (TSLA). |
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