Baron Partners Fund Trimmed Tesla (TSLA) Despite Increased Confidence
- Finance
ThePostMaster- 0
- 5 minutes read
Baron Fund, an investment management company, released its Q4 2025 letter for “Baron Partners Fund”. A copy of the letter can be downloaded here. The Fund increased considerably in the fourth quarter, returning 19.07% (Institutional Shares). It outperformed both the Russell Midcap Growth Index (the Benchmark), which returned -3.70%, and the broader Russell 3000 Index, which returned 2.40% in the quarter. The Fund returned 24.86% in the calendar year, significantly outperforming the Russell Midcap Growth Index, which posted a return of 8.66%, and the Russell 3000 Index, which returned 17.15%. The Fund focuses on long-term investments in a non-diversified portfolio of well-managed growth businesses at attractive prices across market caps. It has consistently delivered strong absolute and relative performance over the long term. The Fund has seen substantial appreciation during good times and has preserved value during challenging periods. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Baron Partners Fund highlighted Tesla, Inc. (NASDAQ:TSLA). Tesla, Inc. (NASDAQ:TSLA) is an American company that manufactures electric vehicles and energy generation and storage systems. On February 10, 2026, Tesla, Inc. (NASDAQ:TSLA) stock closed at $425.21 per share. One-month return of Tesla, Inc. (NASDAQ:TSLA) was -3.19%, and its shares are up 26.36% over the past twelve months. Tesla, Inc. (NASDAQ:TSLA) has a market capitalization of $1.596 trillion.
Baron Partners Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its fourth quarter 2025 investor letter:
“In 2025, we exited 30.5% of our position in Tesla, Inc. (NASDAQ:TSLA). We are extremely confident in the company’s prospects and ability to become a significantly more valuable business. The Fund completed its purchase of Tesla shares in 2016 with an ending portfolio weight of 9.6% of total investments. Its average cost of all purchases in the Fund was only $14.22 per share. Due to significant appreciation in the stock, the position increased to 26.7% of the portfolio’s total investments at the end of 2025. Despite offsetting some of the volatility caused by the position’s weight with more stable and uncorrelated investments, Tesla’s stock movements caused increased variability in the entire portfolio. We entered into agreements with a large investment bank to dispose of a portion of the holdings through a redemption in-kind because, we believe, it would have minimal impact on the share price and low transaction costs. Tesla remains a top holding of the Fund. The disposition was a portfolio construction decision and not reflective of reduced confidence in the business.”
