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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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Buyside Digest is not affiliated with, and does not endorse, TimesSquare Capital Management U.S. Small Cap Growth Strategy. This analysis is provided for institutional research purposes only and is not investment advice.
"TimesSquare's small cap growth strategy delivered 23.92% net in 2Q 2026, powered by AI infrastructure demand driving semiconductor and connectivity holdings up 70-190%. Data center buildouts created powerful tailwinds while consumer retailers, energy, and private credit faced headwinds from tariff uncertainty, commodity price reversals, and redemption concerns."
TimesSquare's U.S. Small Cap Growth strategy returned 23.92% net in 2Q 2026, trailing the Russell 2000 Growth Index's 25.71% return. The quarter was dominated by AI infrastructure capital expenditure driving exceptional performance in semiconductor and connectivity holdings, with several positions surging 70-190% on hyperscaler demand for data center buildouts. Information Technology was the largest positive contributor, while Health Care, Financials, and Energy lagged. The portfolio benefited from positions in high-speed connectivity, precision timing semiconductors, and power infrastructure for data centers. Detractors included consumer-oriented retailers facing tariff uncertainty and record-low sentiment, energy holdings as commodity prices reversed from conflict-driven highs, and private markets solutions amid redemption concerns. The manager trimmed outperformers, exited positions lacking growth visibility, and increased Biopharma exposure following Russell reconstitution. Looking forward, the manager sees AI-driven capital expenditure and regional self-reliance as dominant forces creating pricing dislocations for their bottom-up, fundamental approach to exploit through identifying disciplined management teams compounding intrinsic value.
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