| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 11.8% | -4.6% | 5.0% |
| 2025 | 2024 | 2023 | 2022 | 2021 | 2020 |
|---|---|---|---|---|---|
| 5.0% | 15.1% | 23.2% | -28.0% | 6.5% | 33.0% |
Brown Advisory's Mid-Cap Growth strategy underperformed the Russell Midcap Growth Index in Q4 2025 due to stock selection, but delivered full-year performance in line with expectations. The strategy's underperformance was primarily driven by not owning Palantir Technologies, which contributed 430 basis points to the benchmark's return despite trading at extreme valuations. The strategy focuses on high-quality compounders with market caps between $2-50 billion, holding winners as they grow to over $100 billion in value. During the quarter, the team added several new positions including Amer Sports, Axon Enterprise, and Zscaler, taking advantage of market volatility to deploy capital into attractive opportunities. Key themes driving performance include AI-enabled solutions, data center infrastructure demand, and nuclear power appreciation. The strategy benefits from broadening market leadership beyond large-cap technology and expects small-cap earnings acceleration in 2026 to support mid-cap outperformance. Dollar turnover remained elevated as the team maintained discipline around price targets while capitalizing on volatility.
The Mid-Cap Growth strategy aims to generate solid risk-adjusted returns by owning high-quality compounders with fair valuations and market caps between $2 billion and $50 billion at the time of purchase, often holding winners for years as they compound to just above $100 billion in company value.
The strategy remains committed to achieving attractive, risk-adjusted returns over a full market cycle by owning a diversified portfolio of companies that can grow significantly larger over time. The manager expects the broadening of market drivers beyond large-cap tech to continue benefiting small- and mid-caps, with small-cap earnings growth expected to accelerate in 2026.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jan 26 2026 | 2025 Q4 | AS, AXON, CPNG, CSGP, CVNA, EFX, EXPE, FICO, HWM, INSM, IOT, MDLN, NTRA, PLTR, PSN, PSTG, RKLB, ULTA, VEEV, ZS | AI, energy, growth, healthcare, industrials, mid cap, semiconductors, technology | - | Several portfolio companies are generating meaningful revenue from GenAI-enabled products, with Axon leading through DraftOne and related offerings that drove over $500 million in bookings.… |
| Oct 16 2025 | 2025 Q3 | ALNY, CAH, CMG, CVNA, DKNG, DXCM, FIG, FIX, MDB, NTSK, OS, PSN, RBLX, TTD, VRSK, WST, ZS | Artificial Intelligence, Biotechnology, cybersecurity, Data centers, healthcare |
PSN NTSK CVNA |
Brown Advisory sees strong tailwinds from AI and data center infrastructure fueling select mid-cap growth opportunities, including semiconductors, software, and cybersecurity. The fund also focuses… |
| Aug 27 2025 | 2025 Q2 | ENTG, GWRE, MRVL, NET, PINS, RBLX, TECH, VOYG, VST | AI Infrastructure, fundamentals, Mid Cap Growth, secular growth, valuation | - | The letter focuses on mid-cap growth companies benefiting from secular trends such as AI infrastructure, data centers, and industrial services. Volatility created by tariffs and… |
| 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 |
CybersecurityDemand for security increased following the recent NPM supply chain attack. JFrog's security add-on which secures open-source packages before organizations onboard them has seen significant pipeline growth, highlighting the critical need for software supply chain security. |
Cybersecurity Software Security Enterprise Technology | |
Data CentersComfort Systems USA benefited from robust demand for data centers and AI-related infrastructure, with the company reporting stronger-than-expected revenue driven by this demand. |
Infrastructure Technology Construction AI Revenue | |
EnergyCanadian energy sector positioned to benefit from regulatory reform and government cooperation with Alberta. US military action in Venezuela aimed at accessing oil sector, with administration asking US energy companies to invest $100 billion in Venezuelan infrastructure. |
Oil Gas Regulatory Reform Alberta Venezuela | |
HealthcareFund focuses exclusively on healthcare sector with concentrated portfolio of small-cap companies. Investment approach targets special situations within healthcare including spin-offs, asset sales, business model pivots, and new product launches. Portfolio includes pharmaceutical, medical device, biotechnology, and healthcare IT companies. |
Pharmaceuticals Medical Devices Biotechnology Healthcare IT Special Situations | |
SemiconductorsTaiwan Semiconductor represents the dominant manufacturer for leading fabless chip designers including NVIDIA, Apple, and Broadcom. The global arms race to develop artificial general intelligence will support multiple years of robust growth for foundries with leading-edge capabilities. |
Foundries Advanced Process AI Chips Manufacturing Technology Leadership | |
| 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 |
HealthcareFund focuses exclusively on healthcare sector with concentrated portfolio of small-cap companies. Investment approach targets special situations within healthcare including spin-offs, asset sales, business model pivots, and new product launches. Portfolio includes pharmaceutical, medical device, biotechnology, and healthcare IT companies. |
Pharmaceuticals Medical Devices Biotechnology Healthcare IT Special Situations | |
| 2025 Q2 |
Growth |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 16, 2025 | Fund Letters | GEORGE SAKELLARIS | PSN | Parsons Corp. | Information Technology | Aerospace & Defense | Bull | NYSE | Contracts, cybersecurity, Defense, Government, growth, infrastructure | Login |
| Oct 16, 2025 | Fund Letters | GEORGE SAKELLARIS | NTSK | NetSkope Inc. | Information Technology | Cybersecurity | Bull | - | AI, cloud, cybersecurity, growth, IPO, Software, technology | Login |
| Oct 16, 2025 | Fund Letters | GEORGE SAKELLARIS | CVNA | Carvana Co. | Consumer Discretionary | Internet & Direct Marketing Retail | Bull | NASDAQ | Autos, Digital, e-commerce, growth, Margins, retail, Scalability | Login |
| TICKER | COMMENTARY |
|---|---|
| AS | Amer Sports (AS) – the company behind the Arc'teryx, Salomon, and Wilson brands – is gaining share across outdoor categories as double-digit revenue growth, combined with margin expansion, sets the stage for multi-year earnings growth. We initiated the position after it became clear the company had moved past a prior marketing misstep in China and that all three core brands were delivering robust growth despite a challenging macro backdrop. |
| AXON | Axon Enterprise Inc. develops and produces Taser weapons and body cameras for law enforcement agencies. Investors have grown accustomed to big beats and raises from Axon. A slight beat to third-quarter projections and mixed fourth-quarter guidance triggered a -21% decline. We added to the position due to solid customer growth and retention. There are also numerous growth drivers for their business including Taser 10, bodycam 4, and their artificial intelligence software bundle. |
| CPNG | Coupang is South Korea's largest ecommerce platform by market share. Shares declined in response to higher-than-expected investment in its Taiwan expansion, and the selloff was exacerbated by a data breach that affected nearly all of its 33 million customers. We believe the market reaction is overdone. Coupang's increased spending in Taiwan reflects conviction in the opportunity and a long-term commitment to the market. |
| 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. |
| CVNA | Carvana is one of the largest used car retailers in the US and operates a national e-commerce platform that provides broader selection, lower costs and a more convenient customer experience than traditional dealerships. We view the company as a differentiated, vertically integrated operator with strong advantages in sourcing, logistics, fulfillment and financing that create meaningful barriers to entry. With a small share of a large market, we believe Carvana has a long runway for growth as it scales nationally and captures efficiencies from its acquisition of ADESA's US physical auction business, which adds a national network of wholesale vehicle auction facilities and supports improved unit economics. |
| EFX | We divested our position in Equifax during the quarter following a strategic shift by FICO, a leading provider of credit scores to the mortgage industry. FICO announced plans to sell its credit scores directly to mortgage underwriters, bypassing the credit bureaus and thereby pressuring the economics that EFX has historically captured in the credit-scoring value chain. |
| EXPE | Expedia, which was a recent purchase, also posted strong results and raised the outlook going forward. We added to our exposure to Expedia and continue to hold both stocks in the Fund. |
| FICO | Notable performance detractors over the same period included Timee, Fair Isaac Corporation, and Uber Technologies. |
| HWM | RTX and Howmet extended gains as commercial aerospace demand remained strong and defense spending stayed elevated amid ongoing geopolitical uncertainty, supporting backlog strength and long-cycle earnings durability |
| INSM | Insmed Inc., a biopharmaceutical company focused on developing and commercializing therapies for patients with rare diseases, advanced 21% over the quarter. We have been pleased with the launch of Brensocatib, a first-in-class oral medication that treats non-cystic fibrosis bronchiectasis. The reception has been positive from physicians, patients, and payers. |
| IOT | Samsara Inc. 1.5 (4.55) (0.01) |
| NTRA | Not owning Natera, Inc. (NTRA) detracted from performance. The stock rose after its earnings announcement, signaling a strong revenue beat. |
| PLTR | AI-enabled surveillance company Palantir trades at over 100 times sales. |
| PSN | Parsons is a technology-driven engineering firm serving the defense, intelligence and infrastructure markets, with strengths in cybersecurity, missile defense and infrastructure protection. Shares fell in Q4 after losing out on winning a $12.5 billion Federal Aviation Administration (FAA) air traffic control modernization contract, interrupting a recovery from earlier cost-cutting pressures tied to the Department of Government Efficiency initiatives. Despite not being selected as the prime integrator, we remain invested, as Parsons' long-standing relationship with the FAA positions it to capture meaningful portions of the program. |
| PSTG | During the fourth quarter, we found several opportunities to lean back into holdings that we trimmed or sold earlier in the year due to valuation, including Pure Storage (PSTG). In fact, the large swings in PSTG's share price illustrate why dollar-based turnover has been elevated. The all-flash storage array maker enjoyed accelerating sales growth the last few quarters as more enterprises and hyperscalers adopted its superior storage solutions. Fundamentals have been in-line or better than our expectations. Nonetheless, despite consistently solid results, PSTG's share price, as shown below, has taken a wild ride. |
| RKLB | Shares of Rocket Lab Corp appreciated during the quarter, supported by multiple launch agreements, better-than-expected third-quarter results, and the largest contract in the company's history—an $816 million agreement to provide 18 missile warning, tracking, and defense satellites in low earth orbit for the Proliferated Warfighter Space Architecture, with launches expected to begin in fiscal year 2029. |
| VEEV | Veeva Systems Inc. provides industry cloud solutions to the global life sciences industry. The company delivered solid fiscal third-quarter results and issued guidance above the Street. Veeva management reiterated confidence in achieving its 2030 financial targets, maintaining that the current focus on competitive dynamics with Salesforce.com in the customer relationship management (CRM) market (20% of Veeva's total revenues) does not undermine its long-term trajectory. Despite these positives, the stock sold off by -25% on competitive concerns in the CRM market as Veeva projected lower Vault CRM customer versus its initial expectations. |
| ZS | Zscaler was among the top 5 largest detractors with significant price declines. We wrote a new investment memo on Zscaler during the quarter. |
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