| 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 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
CloudCloud computing remains a core portfolio theme with strong positioning in hyperscale providers and infrastructure companies. Microsoft Azure showed 39% growth while Google Cloud exceeded 30% growth, both supported by AI workload adoption. The fund sees continued multi-year demand for cloud infrastructure and services as enterprises accelerate digital transformation. |
Azure Infrastructure Hyperscale Enterprise Growth | |
Electric VehiclesRivian represents maybe the most exciting position in the portfolio, with the company developing its own autonomy platform and in-house chip (RAP1). The R2 model represents a pivotal moment, and partnerships with Volkswagen and Amazon have strengthened the balance sheet while expanding strategic options. |
Autonomy Manufacturing Technology Partnerships Scale | |
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 represents the fund's exposure to global streaming entertainment, despite near-term headwinds from subscriber growth concerns and content spending. The fund continues to view Netflix as the dominant global streaming platform with durable competitive advantages through its content library, technology infrastructure, and growing advertising business. |
Content Global Advertising Platform Entertainment | |
| 2025 Q3 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
| 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 | Shares of specialty insurer Arch Capital Group Ltd. 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 | The biggest laggard in the Consumer Discretionary sector was footwear manufacturer Birkenstock, which provided guidance for fiscal year 2026 that was below expectations, despite reporting a strong third quarter that exceeded both top- and bottom-line estimates. The company cited production constraints, which would limit volume growth to ~10%, and a shift to selling through wholesalers, as customers now prefer buying in-store versus online. We believe the softer Q3 guidance will prove to be conservative and the stock is set up for a solid 2026. |
| CHH | CHH is an asset-light, high-margin (60%+ EBITDA margin on revenue ex-pass-through costs) hotel franchisor trading at a distressed multiple due to cyclical top-line headwinds and KPI deterioration experienced in 2025, namely U.S. RevPAR declines and lack of U.S. room growth. The market has severely punished the stock—down from $154 in early 2025 to $106 today—now pricing in structural decline fears. However, the business is still growing earnings, is highly cash-generative, and may have the ability to unlock a significant amount of cash on the balance sheet to buy back shares at these historically low levels. CHH is currently trading around the bottom 2.5% of its historical valuation range over the past ten years at 10.7x EBITDA. If the stock reverts to its 20-year median valuation of 14x forward EBITDA (which would still be a 3-6x EBITDA discount to Hyatt, Hilton, and Marriott), the stock has ~50% upside. |
| CSGP | The shares of CoStar Group, Inc., the global leader in digitizing real estate, declined in the fourth quarter, due to concerns that the company's residential Homes.com platform will continue to require significant capital investment and competitive worries that Google's new real estate advertisement format and Zillow's OpenAI partnership could divert traffic from Homes.com in the years ahead. |
| FDS | By looking at their Rnancials, FactSet, PayPal, Adobe, and Salesforce seem to be doing Rne. The market, however, is reading subdued revenue growth as a sign of increased competition on their core oSerings. These companies' outlooks look more di'cult than their past. |
| GWRE | Shares of P&C insurance software vendor Guidewire Software, Inc. declined during the quarter following strong gains earlier in the year, as the broader software sector came under pressure. After a multi-year transition period, we think Guidewire's cloud migration is largely complete. We believe cloud will be the sole path forward, with annual recurring revenue benefiting from new customer wins and migrations of existing customers to InsuranceSuite Cloud. |
| H | The shares of Hyatt Hotels Corporation, a global hospitality company that focuses on serving high-end travelers, performed well in the most recent quarter due to solid quarterly results and the market's realization that its valuation multiple was too low relative to its growth rate and peers. We remain optimistic about the prospects for Hyatt because the company offers industry-leading 6% to 7% net unit growth at a two to four multiple point valuation discount relative to industry peers. |
| 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 | Veterinary diagnostics leader IDEXX Laboratories, Inc. contributed to performance after again reporting better-than-expected financial results. Foot traffic to veterinary clinics in the U.S. remains modestly negative but is poised to recover over the next several years. Even so, IDEXX's excellent execution has enabled the company to continue delivering robust performance. |
| 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 | Eli Lilly shares were a top performer in 4Q25 after delivering strong Q3 2025 earnings in October. Revenue rose 54% year-over-year to $17.6 billion, and adjusted EPS of $7.02 beat consensus of $6.02. Growth was driven by its GLP-1 franchises, Mounjaro and Zepbound, where sales more than doubled year-over-year, alongside strength in other therapeutic areas. Management raised full-year guidance for both revenue and earnings, reinforcing investor confidence in the company's growth outlook. |
| MSCI | MSCI Inc. 4.3 1.40 (0.02) |
| MTN | Vail Resorts operates mountain resorts and ski lodging, with the majority of revenue derived from US properties. It probably goes without saying that one can't ski without snow. Unfavorable weather conditions throughout 2025 dragged on visitations and skier spending. In addition, rising labor and operational costs have further pressured margins, and management has failed to reassure investors. We believe that Vail's challenges are more cyclical than structural, and if/when snowfall averages revert, an undemanding valuation could help underpin an increase in the stock price. |
| 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 | We also added to The Charles Schwab Corporation, which is benefiting from positive earnings revisions, expanding margins, and higher capital returns after having repaid nearly all of its high cost funding. |
| 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 | Under the previous system, companies that produced only electric vehicles—most notably Tesla—generated large quantities of credits that could then be sold to manufacturers falling short of their EV production targets, allowing them to avoid regulatory penalties. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||
