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 |
|---|---|---|---|---|---|---|
Next Century Growth Investors delivered exceptional Q2 2026 performance across all five strategies, with the Large Cap Growth strategy up 27.78% net versus 16.74% for the Russell 1000 Growth Index, driven by concentrated exposure to AI infrastructure, semiconductors, and data center buildout. Technology holdings returned 90-120% in aggregate across smaller cap strategies, with the Philadelphia Semiconductor Index posting its best quarter on record as roughly $700 billion of hyperscaler capex commitments restored investor conviction. Small caps posted their strongest first half since 1991, benefiting from accelerating earnings growth in semiconductors, defense, and reshored manufacturing. Following the sharp rally, the manager trimmed AI-exposed positions after valuations expanded considerably and redeployed capital into health care, industrials, financials, and software at more attractive valuations. The firm maintains high conviction in small cap opportunities where fundamentals are accelerating and relative valuations remain reasonable despite recent outperformance. Key risks include elevated inflation pressures, potential Fed rate hikes, and stretched valuations in mega-cap AI names requiring sustained earnings delivery to justify current multiples.
Next Century Growth Investors focuses on high-quality growth businesses with durable competitive advantages, strong balance sheets, and long-term earnings power, emphasizing multi-year investment cycles in AI infrastructure, semiconductors, data centers, onshoring, and defense spending, with particular conviction in small cap opportunities where accelerating fundamentals and attractive valuations create a compelling multi-year setup.
The investment backdrop remains constructive for high-quality growth investing. The U.S. economy has proven resilient, corporate earnings are on pace to deliver strong growth in 2026, and capital spending tied to AI infrastructure and re-industrialization continues to accelerate. The surge in earnings has compressed forward valuation multiples for many segments, providing a healthier fundamental foundation. Conditions remain especially favorable for continued market broadening in favor of small cap stocks, which still trade at attractive relative valuations despite the rally. The manager expects a more selective environment for large cap growth investors, which suits their concentrated, research-driven approach. They believe environments marked by shifting leadership, dispersion, and rapid capital reallocation tend to reward disciplined, fundamentally driven active managers.
As of Jul 22, 2026
Next Century Growth Investors was founded in November 1998 by Tom Press and has maintained consistent leadership with an experienced team managing the Large Cap Growth Strategy since January 1, 1999. The firm is led by Tom Press (Chairman/Founder), Bob Scott (CEO who joined in 2000), Peter Capouch (President who joined in 2003), and portfolio managers Kaj Doerring (28 years experience) and Tom Dignard. The team has over 100 years combined investment experience working together at NCG, with education from prestigious institutions including Harvard, Yale, and University of Minnesota. The firm is 80% owned by active portfolio manager partners, ensuring independence and alignment of interests. Operations are supported by Kelly McNulty as VP and Chief Compliance Officer with over 30 years of industry experience.
Next Century Growth Investors' philosophy has remained consistently focused on investing in high growth companies to create value for clients. The firm seeks to invest in the fastest growing and highest quality companies in America. For the Large Cap Growth Strategy specifically, they seek to generate long-term capital appreciation by investing in the fastest-growing and highest-quality companies in the US large cap growth universe. The firm believes the market inefficiently values high-quality companies with long-term growth opportunities, and that if portfolio companies execute as expected, they can compound stock value faster than the overall market. The investment approach is grounded in the belief that a portfolio consisting of high-quality growth companies, combined with a strong sell discipline, will lead to both compounding of portfolio value and better performance than the unmanaged index over the long-term.
Lead Portfolio Manager
Moderate Conviction Bullish
Market Conviction
The manager demonstrates moderate-high conviction through concentrated sector positioning (55% technology, 23% industrials in large cap) and specific named positions with clear performance attribution (AMD, AMAT, NVDA as top contributors). They articulate multi-year thematic conviction in AI infrastructure, semiconductors, data centers, onshoring, and small caps with specific catalysts. However, the trimming activity after the rally, diversified portfolio across multiple sectors, and hedged language around large cap mega-caps ('will increasingly depend on earnings delivery') prevents this from reaching high conviction territory. The explanation states clear positioning but acknowledges valuation sensitivity and active rebalancing, consistent with a 0.68 score.
Growth Outlook
The manager expresses cautious optimism about the market outlook. While acknowledging near-term uncertainties from geopolitical risks and inflation concerns, they believe U.S. economic growth remains resilient and conditions favor continued market broadening. They see opportunities in high-quality growth businesses despite elevated volatility.
Risk Appetite
The portfolio shows selective risk appetite with strategic positioning changes. The manager reduced software exposure due to AI disruption concerns while maintaining overweight positions in industrials and adding new technology positions. Cash remains low at 2%, indicating continued deployment but with increased selectivity.
Capital Deployment
Cash increased to 5% as of quarter-end from an implied lower level earlier in the quarter. The manager explicitly trimmed technology positions after the April-May rally, stating they 'felt it was prudent to trim exposure' after valuations expanded. While they are redeploying into other sectors (health care, industrials, financials, software), this represents rotation rather than net new deployment. The net effect is a modest de-risking move with cash raised and exposure trimmed in the highest-performing area, scoring slightly negative.
Forward Guidance
The manager expresses constructive forward guidance, stating they believe conditions remain favorable for continued market broadening and see opportunities in their investment approach. They emphasize the value of active management during periods of volatility and expect their philosophy to benefit from shifting market dynamics.
Language Signal
The letter is dominated by positive directional language: 'exceptional,' 'strongest,' 'meaningfully outperformed,' 'compelling multi-year setup,' 'constructive,' 'favorable,' 'accelerating fundamentals,' 'attractive valuations,' and 'healthy growth prospects.' Risk language is present but balanced and not alarmist: 'risks worth respecting,' 'periods of volatility,' and 'more complicated' on policy. The net balance tilts meaningfully toward bullish language, though not overwhelmingly so given the acknowledgment of valuation concerns in mega-cap AI and inflation risks.
Perceived Risk
The manager perceives elevated risk levels, extensively discussing geopolitical tensions, energy supply disruptions, inflation concerns, and valuation pressures on mega-cap growth stocks. They specifically mention ongoing instability in the Middle East, oil price volatility, and heightened market volatility as key risk factors affecting the investment environment.
Opportunity Density
The manager sees abundant opportunities across multiple areas. They describe small caps as having 'a compelling multi-year setup' with 'accelerating fundamentals, improving breadth, and reasonable valuations.' They are actively adding to health care, industrials, financials, and software, indicating multiple attractive areas for deployment. The letter describes 'shifting leadership, dispersion, and rapid capital reallocation' as creating opportunities that 'tend to reward disciplined, fundamentally driven active managers.' While they note large cap mega-caps face 'elevated scrutiny' and will be 'more selective,' the overall characterization is of a rich opportunity set across small caps and selective large cap areas.
Time Horizon
The manager explicitly describes their focus on 'durable, multi-year investment cycles' and states that small caps have 'a compelling multi-year setup.' They emphasize 'long-term earnings power' and 'multi-year growth drivers' in AI infrastructure. The letter discusses 'since-inception investment results' and references their approach as focused on 'compounding of portfolio value and market outperformance over time.' However, the active trimming after a single quarter's rally and redeployment activity suggests some catalyst sensitivity and shorter-term tactical adjustments within the longer-term framework. This is consistent with a 2-4 year multi-year thesis rather than a permanent capital, decade-plus horizon.
Top Conviction Themes
Key Catalysts
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