Baron Technology Fund | Q1 2025

Dear Baron Technology Fund Shareholder:

During the first quarter, Baron Technology Fund^® (the Fund) fell 14.80% (Institutional Shares), underperforming the MSCI ACWI Information Technology Index (the Benchmark), which dropped 11.64%, and the S&P 500 Index, which declined 4.27%.

Markets are often driven as much by sentiment as by fundamentals, and the first quarter of 2025 proved no exception. January brought strong performance for the Fund, propelled by investor enthusiasm for long-term secular growth trends – particularly around AI and its potential to transform most consumer and business activities. Optimism was further buoyed by expectations that the new Trump administration’s policies – lower corporate tax rates, regulatory rollbacks, energy cost reductions, and government spending cuts – would accelerate economic growth. However, sentiment shifted abruptly in mid-February. Fears of tariffs, a potential global trade war, and geopolitical realignment reversed market gains, creating volatility reminiscent of the 2020 COVID crisis or the 2008-09 Great Financial Crisis.

To put it plainly, tariffs – a whirlwind of rumors, X posts, debates, and contradictory official statements – have dominated the narrative, as one observer quipped, “sucking the air out of the room.” The past 60 days saw dramatic developments: the April 2 rollout of historically high “reciprocal” tariffs stunned markets, followed by a 90-day pause announced at midnight on April 10. Near-daily rumors of trade deals, tariff exclusions, and subsequent denials have kept volatility elevated. As events unfold, uncertainty remains the prevailing mood, challenging even the most resilient investors.

We don’t believe Baron Funds shareholders are reading our quarterly letters for our analysis of tariffs or short-term calls on macro issues or market projections. But we do wish to address our high-level thinking and how we are researching, analyzing, and investing on your behalf in this environment.

Macro and Market

We have gained valuable experience from researching and investing through several different macro disruption and market-driven shocks, including the bursting of the Dot-Com bubble, the Great Financial Crisis, the COVID pandemic, and the 2022 tech “recession” and spike in interest rates. History rhymes but does not repeat. The current financial crisis is distinct from past ones. So, we are drawing on our lessons learned while adapting our approach to the unique dynamics of today.

By its executive orders and actions, the Trump administration may be attempting to usher in structural or systematic change – a new world order in terms of global trade relations and international diplomacy and alliances. We say “may be” because conditions have been changing on a dime, and no one knows the precise goals of the administration or can align conflicting policy objectives and statements by members of the administration, including the President himself. We have remained closely attuned to the current and potential measures taken by the administration and the debates and analyses of well-informed and experienced experts on all the issues at play. We have read countless reports, articles, papers, and notes, and listened to hours of interviews, podcasts, and debates. We have discussed and examined the current state of play, realistic scenarios, and potential consequences. But as Ron has steadfastly articulated for over 50 years,⁴ we do not attempt to forecast or predict macroeconomic, political, or geopolitical outcomes, and this one might be more impossible to call than all the others we have lived through or learned about.

We believe it would be misleading to downplay concerns about the current landscape or to speculate on short-term market trends. The only forecaster with a good track record of identifying market tops or bottoms–or predicting the outcome of an economic shock like the current trade war–goes by the name “20/20 hindsight.” But relative to current stock valuations, we believe our portfolio of secularly driven, competitively advantaged, cash-flow-generating businesses offers solid multi-year returns once the current volatility subsides and a broad range of new-normal scenarios emerge. We do hope the quote attributed to Winston Churchill proves prescient, even for the current cast of characters: “You can always count on Americans to do the right thing, after they’ve tried everything else.”

Investment Strategy and Tactics

In today’s volatile, headline-driven environment, we remain resolute in managing the Fund by focusing on what we can control: our long-term investment mandate, rigorous research, disciplined analysis, sound judgment, and strategic portfolio decisions. The Fund distinguishes itself through an unwavering focus on “where the world is headed, not where it’s been” – capitalizing on powerful secular technology trends that disrupt industries and drive sustained, high-impact opportunities. While past macroeconomic shocks temporarily disrupted trends like the internet, mobile, cloud computing, and digital transformation, history shows these forces prevailed. We are confident the same resilience will hold today, despite potential obstacles. Transformative secular trends – such as AI; autonomous transportation; robotics; digital commerce, media, finance; cloud computing; and advanced semiconductors – will shape the future. As highlighted at last November’s Baron Investment Conference and in recent letters, the most successful investments of the past half century thrived by harnessing technological breakthroughs and relentless secular trends that reshaped industries and transformed how we live and work.

We acknowledge that proposed tariffs and trade restrictions may pose short-term challenges for many of our portfolio companies. For instance, as we drafted this letter, the administration barred NVIDIA Corporation from selling its H20 chip – a lower-power, export-compliant version of its previous-generation technology – to China.⁵ Tactically, we are rigorously assessing the resilience of our investments against tariffs, trade barriers, and the growth headwinds stemming from this uncertainty. We prioritize companies that combine macroeconomic resilience with enduring long-term growth and competitive advantages, particularly those poised to accelerate once the current uncertainty resolves, and new trade and geopolitical frameworks emerge.

We are actively engaging with our portfolio companies, asking our core long-term questions – spanning growth opportunities, competitive differentiation, product-market fit, go-to-market strategies, profitability, and capital allocation – while also probing potential tariff impacts, macroeconomic risks, and management contingency plans. Most management teams and companies reporting earnings acknowledge the prevailing uncertainty but note that current business trends remain stable, with tariff impacts deemed “too soon to assess.”

We are actively refining our financial modeling and price target analysis, rigorously evaluating revenue projections, their translation to profits and cash flow, and testing conservative and downside scenarios as appropriate. We are testing scenarios discounting near-term growth over the next 12-18 months but projecting reaccelerating growth afterwards. We employ a “double math” approach for most portfolio companies, assessing the revenue growth, margins, and valuation multiples required for stocks to double in value over four to five years. In setting price targets, we are using more conservative financial projections and lower-end valuation multiples, while also calculating downside risks. This disciplined process aims to identify stocks with compelling risk/reward and upside/downside profiles. This work informs stock selection and portfolio construction.

Ultimately, we remain committed to investing in long-term secular winners with resilient products, revenue models, and management strategies, ensuring durability and growth through evolving market conditions.

AI

Given the importance of AI as (1) “the most powerful technology platform shift and secular growth driver since the advent of the internet itself,”⁶ and (2) the predominant driver of stock leadership over the last two years, we would like to share a few high-level thoughts.

• The Trump administration’s words and actions – including initiatives like Project Stargate and Taiwan Semiconductor Manufacturing Company Limited’s (TSMC) $100 million investment in U.S. advanced semiconductor manufacturing, alongside restrictions such as the H20 China ban – underscore a commitment to prioritizing AI for national and economic security and a broader goal of maintaining U.S. AI leadership. Heightened uncertainty persists, however, due to potential new tariffs and trade restrictions, particularly in relation to U.S.-China dynamics, which could either isolate and restrain China’s AI development or lead to a comprehensive bilateral agreement. This uncertainty has negatively influenced the valuations of AI industry leaders like NVIDIA, Broadcom Inc., and TSMC. While near-term challenges may impact growth and earnings, we believe the long-term trajectory of AI as a transformative force remains enduring and will ultimately be supported by policies aimed at sustaining U.S. dominance in the sector.
• The quarter began with intense market speculation about DeepSeek and its potential to reshape AI development. To address this, we hosted a Thought Leadership Forum webinar, “DeepSeek Disillusion: Evaluating the Future of AI,” on February 3, 2025, and published a related Baron Insights article in April.⁷ Our perspective, as outlined in these works, remains unchanged. Key points include: (1) the market’s response to DeepSeek was significantly overstated; (2) the arms race toward artificial general intelligence and artificial super intelligence continues unabated, with well-funded Western leaders like OpenAI, xAI, Anthropic, Alphabet (Google), Meta, Microsoft Corporation, and Amazon.com, Inc. leading the field, as none can afford to sit on the sidelines of this critical contest; (3) AI scaling laws remain robust, further strengthened by advancements in reasoning and long-thinking models; and (4) beyond consumer applications, like ChatGPT or Grok, innovations in agentic AI and physical AI are driving increased investment in the sector.
• Amid tariff uncertainty, some investors worry about a pause or digestion period in AI capital investment. However, public statements from management teams and our private discussions confirm robust AI capital investment plans for 2025, with strong demand projected through 2026. For instance, TSMC, a global leader in advanced AI semiconductor manufacturing, stated on its recent earnings call: “robust AI-related demand from our customers throughout 2025,” “revenue from AI accelerators [will] double in 2025,” “[r]ecent developments are also positive to AI’s long-term demand outlook,” and its capacity builds are “[s]till fully…for 2026,” though its CEO noted he “cannot say the number.” Moreover, xAI has been open regarding its plans to build the world’s largest coherent AI training cluster at over 1 million H100 GPU equivalents, five times the size of its Colossus data center; and Sam Altman posted on X in February that OpenAI has “been growing a lot and are out of GPUs” and that “hundreds of thousands coming soon, and I’m pretty sure y’all will use every one we can rack up.”
• Concerns about AI’s return on investment persist among some investors, but industry leaders remain unfazed. NVIDIA CEO Jensen Huang declared on his latest earnings call: “No technology has ever had the opportunity to address a larger part of the world’s GDP than AI.” We believe this vision will prove true. Of the $110 trillion global GDP, tech spending accounts for just 5% – about $5.5 trillion – while human labor still represents about 45% to 50%. AI is the cornerstone of productivity-driven digital transformation. With advancements in agentic and physical AI gaining momentum, Microsoft CEO Satya Nadella’s repeated prediction that tech spending should double over the foreseeable future appears to be a relatively easy target, with 15% to 20% of GDP not out of reach down the line. Five percent of global GDP is $5.5 trillion and 10% is $11 trillion – prize money no business race has ever rivaled.

Below is a partial list of the secular megatrends we focus on:

• Cloud computing
• Software-as-a-service
• AI
• Mobile
• Semiconductors
• Digital media/entertainment
• E-commerce
• Cybersecurity
• Electric vehicles (EVs)/autonomous driving
• Electronic payments
• Robotics
• Targeted digital advertising

We continue to run a high-conviction portfolio, with an emphasis on the secular megatrends cited and listed. Among others, during the fourth quarter we initiated or increased positions in the following names:

• Financial technology: LPL Financial Holdings Inc.
• Software: Atlassian Corporation Plc, Samsara Inc., PAR Technology Corporation, Cloudflare, Inc., Datadog, Inc., GitLab Inc., Shopify Inc., and Snowflake Inc.
• Digital advertising: The Trade Desk and Reddit, Inc.
• Public safety technology: Axon Enterprise, Inc.
• Semiconductors & semiconductor equipment: NVIDIA Corporation, Broadcom Inc., Nova Ltd., Monolithic Power Systems, Inc., Taiwan Semiconductor Manufacturing Company Limited, Park Systems Corporation, and HPSP Co., Ltd.
• Networking technology: Arista Networks, Inc.
• Data center infrastructure: Vertiv Holdings Co

Spotify Technology S.A. is the leading global digital music platform, offering on-demand audio streaming through both paid premium subscriptions and an ad-supported tier. Shares of Spotify rose following another strong quarterly result, marked by a significant gross margin beat and healthy expansion in operating margins. The company’s compelling value proposition has allowed it to begin flexing pricing power, introducing additional price increases across various global markets. Notably, user growth remains robust despite these hikes, underscoring the strength of the platform. We believe Spotify will continue to leverage its pricing power as it enhances its offering with new features such as audiobooks, AI-driven personalization, a forthcoming “Super Premium” tier, and potentially an education-focused product. In addition to a solid top line and improving margins, the company generated a record $2.3 billion in free cash flow in 2024, reflecting growing scale and discipline in execution. Looking ahead, we see a path toward 35% gross margins, driven by continued growth in high-margin areas including its marketplace, advertising, podcasts, and audiobooks. Operating efficiency remains a strategic focus. Compared to many other consumer discretionary and tech names, Spotify has traded more defensively, aided by the platform’s strong consumer retention and resilient financial characteristics. We expect the company to sustain positive earnings growth, supported by both company-specific drivers and broader industry tailwinds. The launch of the Super Premium tier – expected this year in North America and globally – should be materially accretive to profitability and free cash flow over time. We continue to view Spotify as a long-term winner in music and audio streaming, with the potential to scale to over 1 billion monthly active users.

CoStar Group, Inc. is the leading provider of information and marketing services to the commercial and residential real estate industry. Shares rose on an increase in the productivity of CoStar’s sales force and signs of a start to the recovery of the commercial real estate market. Mixed results around net new sales following CoStar’s significant investment in residential product Homes.com had pressured shares. We remain encouraged by growth in both traffic and brand awareness for the new product and are optimistic that the build out of a dedicated sales team as well as the potential benefits of changes in Multiple Listing Service practices will improve residential sales momentum. We also believe growth in CoStar’s non-residential business is poised to accelerate. Sales productivity has begun to improve as salespeople return to exclusively selling their core product, and we expect this to be amplified as the sales force expands by 20% or more in 2025. We believe the value of CoStar’s core non-residential business exceeds the share price, implying that investors ascribe negative value to the residential opportunity.

GDS Holdings Limited is a leading data center operator in Tier 1 cities in China, with a growing presence across Asia through its now de-consolidated international business, DayOne. Shares performed well in February, driven by early signs of AI-related demand – highlighted by a major 152-megawatt deal with a leading cloud hyperscaler, Alibaba – and optimism around accelerating growth in its international business. Investor sentiment was further supported by stronger-than-expected capex from Alibaba, signaling a potential rebound in hyperscale demand, and by the monetization of select assets at premium valuations through a REIT transaction anchored by one of China’s largest life insurers. However, shares gave back gains in March as concerns resurfaced around potential elevated capital needs to serve a higher level of demand, as well as broader macro risks. Specifically, investors grew increasingly wary of renewed threats on further NVIDIA chip restrictions, overall tightening trade restrictions, and the uncertain trajectory of U.S. – China geopolitical relations. Despite near-term volatility, we remain constructive on the stock and fundamentals. GDS trades at an undemanding valuation, with clear catalysts ahead: accelerating revenue, progress toward deleveraging, and significant embedded value in its international operations. With durable secular tailwinds in cloud computing and AI infrastructure, and deep relationships with leading technology firms in China and the U.S., GDS remains well positioned for long-term value creation.

Broadcom Inc. is a leading fabless semiconductor and enterprise software company, with approximately 60% of revenue generated from semiconductors and 40% from software. The company’s focus on high-performance AI compute and networking solutions, coupled with its disciplined execution in software, positions it as a strategic leader in critical technology markets. Broadcom delivered a strong quarter, beating expectations for both semiconductors and software. AI remained the key growth engine – reaching a $4.1 billion quarterly run rate, up 77% year-over-year – driving a solid ramp in semiconductor revenue, even as non-AI segments like wireless and industrial declined. Software surged, fueled by VMware integration and a shift to subscriptions. Management projected continued AI momentum and steady software execution, with a more pronounced AI ramp expected in the second half. Despite strong quarterly results, the stock retreated amid the same AI-related skepticism as NVIDIA, but primarily due to the broad market pullback on tariff and trade-relations concerns. We remain confident Broadcom is on track to win with its three custom AI accelerator customers and will capture the majority share in the custom-compute space. Broadcom’s lead customer, Google, just rolled out its 7th generation TPU, nicknamed Ironwood, and as Broadcom’s two unnamed (but well speculated) non-Google customers gain traction, confidence in the broader pipeline of four additional partners should strengthen, supporting continued growth in Broadcom’s AI business. We spent two hours with Broadcom’s CEO Hock Tan in March, and he told us in no uncertain terms that “all of them will aggressively ramp and push custom accelerators.”

NVIDIA Corporation is a semiconductor and systems company specializing in compute and networking systems for accelerated computing. Its unmatched leadership in AI infrastructure, spanning GPUs, systems, software and networking solutions, continues to drive robust performance. However, NVIDIA’s stock came under pressure during the quarter, as media and investor narratives shifted toward skepticism, ranging from concerns over slower AI adoption to DeepSeek-related fears that future AI training and inference workloads may become more compute-efficient, reducing demand of accelerated computing systems. As discussed above, we believe these concerns are premature. Training cluster buildouts are progressing in line with expectations, while inference will progressively and steadily scale with usage as enterprises integrate AI into real-world workflows and consumers continue to adopt AI applications, such as ChatGPT, Grok, and Perplexity, to name just a few. Moreover, as we shift from standard Gen 1 (“gut based”) AI models to reasoning Gen 2 (long thinking) models, the query response can demand about 100 times more inference compute to provide a better answer. In contrast to these skeptical narratives, NVIDIA delivered a strong January 2025 quarter, which exceeded Street expectations, driven by data center compute revenues growing 93% year over year to $35.6 billion, with $11 billion of revenue from NVIDIA’s new Blackwell architecture, the fastest product ramp in the company’s history. On the February earnings call and at the GTC conference in March, CEO Jensen Huang reiterated a number of NVIDA growth drivers, including: (1) accelerated (GPU-based) computing architectures replacing legacy (CPU-based) computing architectures; (2) multiple generative AI scaling laws, including pre-training (more data, more compute, smarter models), post-training using reinforcement learning from human and AI feedback, and inference with test-time, long-reasoning compute; (3) agentic AI (autonomous, non-human workers); and (4) physical AI (robots, EVs, etc.).

Amazon.com, Inc. is the world’s largest retailer and cloud services provider. Shares declined during the quarter after management guided to higher-than-expected capital expenditures of $105 billion for 2025, largely driven by AI investments. Most recently, investor sentiment has been weighed down by renewed concerns around tariffs and U.S.–China trade tensions. If implemented, these could lead to higher retail input costs – particularly as over 30% of Amazon’s third-party sellers are based in China – and potentially dampen consumer spending. In the cloud business, macro uncertainty could delay enterprise IT spending and elongate sales cycles for Amazon Web Services (AWS). Despite short-term uncertainties, we remain confident in Amazon’s long-term positioning. The company has repeatedly proven its ability to navigate complex environments and emerge stronger. Amazon continues to deliver solid operating results across its core segments. Profitability in North American retail, AWS, and international retail has improved, supported by disciplined cost management and operational efficiencies. We expect the company to continue to gain share in e-commerce, supported by unmatched logistics scale and infrastructure, while AWS is well positioned to be a long-term leader in generative AI given its technical capabilities and cloud footprint.

We invest in companies of any market capitalization that we believe will deliver durable growth from the development, advancement, and/or use of technology. We invest principally in U.S. securities but may invest up to 35% in non-U.S. securities.

At the end of the first quarter, the largest market cap holding in the Fund was $3.3 trillion and the smallest was $424 million. The median market cap of the Fund was $30.7 billion and the weighted average market cap was $910.4 billion.

We had investments in 43 unique companies. Our top 10 positions accounted for 56.2% of net assets.

To end the quarter, the Fund had $50.4 million in net assets. Despite the market backdrop, Fund flows were modestly positive to begin the year.

* Individual weights may not sum to the displayed total due to rounding.

Regarding NVIDIA Corporation and Broadcom Inc., please see the write-ups in the detractor section.

We added to the Fund’s position in Atlassian Corporation Plc, a mission-driven software company redefining how modern teams collaborate, build, and support software. Atlassian is best known for its developer tools – Jira, Confluence, and Jira Service Management – but we believe it is entering a new phase of platform growth driven by AI, deeper enterprise monetization, and a powerful cloud migration cycle. Despite a roughly $60 billion market cap and over 300,000 customers, the company’s long-term opportunity remains underappreciated. Fewer than 600 customers today generate over $1 million in annual contract value, suggesting substantial whitespace across the installed base. As Atlassian moves upmarket and transforms into a platform powering the full software development lifecycle, we believe this can be a multi-year compounder. Our thesis is premised on the following drivers:

1. AI-Led Product Reinvention: Atlassian is embedding AI deeply across its product suite as a core part of the user experience. Its new AI platform, Rovo, acts as a connective tissue across Atlassian tools, providing semantic search, intelligent summarization, auto-generated documentation, and proactive support-ticket triage. Combined with Atlassian Intelligence, which powers task automation and decision support, the company is delivering tangible productivity gains to both technical and non-technical users. While Rovo is still early, it has the potential to transform how teams discover knowledge, coordinate work, and automate support – making Atlassian a true AI-native enterprise software platform. We expect monetization scale as AI capabilities and consumption expands, particularly within large enterprises.
2. Cloud Migration and Monetization Tailwind: Atlassian is still transitioning its large customers from on-premises deployments to the cloud – a move that brings better pricing leverage, increased cross-sell potential, and more seamless product integration. While migrations have been lumpy to date, the final enterprise blockers (security, compliance, scale) have now been addressed. The company has rolled out three distinct cloud architectures: multi-tenant, government-compliant, and isolated environments for regulated industries. We expect a meaningful acceleration in large-scale migrations beginning in the second half of 2025 and continuing through 2026. Based on our customer checks, Atlassian per user pricing is quite low against the value provided, a dynamic that should enable the company to drive meaningful pricing leverage as cloud and AI modules penetrate the user base.
3. Structural Growth Reacceleration: After a transition year in fiscal year 2024, we believe revenue growth is poised to reaccelerate to the 20% or higher level, driven by continued cloud migrations, AI adoption, penetration of non-technical users, and cross-sell and upsell opportunities.

The Trade Desk is the leading demand-side platform (DSP) in internet advertising, enabling agencies and brands to efficiently plan, buy, and measure digital advertising across desktop, mobile, online video, and connected TV (CTV). Shares declined meaningfully during the quarter following the company’s first earnings miss in 33 quarters as a public company, along with forward guidance that came in slightly below investor expectations. The company cited several factors contributing to the softer outlook, including delays in the rollout of its next-generation Kokai platform, which advertisers use to manage their campaigns, as well as a strategic realignment of the sales organization to improve focus on the world’s largest advertisers.

Investor concerns were compounded by fears that Amazon may become a more aggressive competitor and by broader macroeconomic uncertainty leading to lower advertising spend. In response to these developments and the meaningful stock price move, we conducted a deep re-examination of Trade Desk’s business and our investment case, dedicating significant resources to reevaluate the company’s long-term growth potential, profitability trajectory, competitive positioning, business model, and valuation. Our work included conversations with customers, competitors, venture capital investors, and other industry participants. Based on this research, we reached several conclusions:

1. Kokai Rollout Progress: The Kokai platform is now on track to achieve 90% adoption by year-end, in line with company targets. Advertiser feedback has been notably positive, with many citing high incremental returns on ad spend, which we expect will lead to increased client budgets over time. Deployment bottlenecks are resolving more quickly, and customers are moving onto the platform at an accelerating pace.
2. Enterprise Sales Focus Gaining Traction: The strategic pivot to focus on large global advertisers is already producing early results. This customer segment offers greater long-term revenue potential and a stronger pipeline of campaigns for the second half of the year.
3. Competitive Landscape Remains Favorable: While Amazon’s push into the DSP space has raised concerns, we view the threat in a similar light to prior moves by Google, which offered free or discounted tools to entice advertisers. In both cases, the market has shown a strong preference for independent and objective platforms that are not vertically integrated with media owners. We believe large advertisers will continue to value Trade Desk’s independence, transparency, and neutrality – critical differentiators in a fragmented and complex ecosystem.
4. Short-term Macro versus Long-term Opportunity: The most tangible and immediate headwind is the macroeconomic environment, particularly the potential for softer ad budgets in the near term. This may cause shares to remain under pressure in the short run. However, we believe the long-term opportunity remains compelling, and valuation is now attractive relative to the company’s intrinsic value and market position. As such, we added to our position during the quarter and may look to add further should the stock retrace again.

Despite near-term uncertainty, we remain confident in Trade Desk’s structural advantages. The company is uniquely positioned to benefit from secular tailwinds in CTV advertising, driven by the ongoing shift from linear TV to streaming. As more households cut the cord and as platforms like Netflix, Spotify, and Pinterest open their inventory to programmatic buying, Trade Desk stands to gain incremental demand through these partnerships. Over the long term, we continue to view Trade Desk as one of the most differentiated platforms in digital advertising, supported by its proprietary technology, scaled infrastructure, and a roughly 10% share of the $100 billion and growing programmatic market – a segment that remains a small but expanding portion of the $700 billion global advertising landscape.

In the software space, we trimmed our Microsoft Corporation position and exited our Cadence Design Systems, Inc. holdings to spread investments around our favorite growth software names, including, Atlassian Corporation plc, The Trade Desk, Samsara Inc., PAR Technology Corporation, Cloudflare, Inc., Shopify Inc., and GitLab Inc., when their stocks retreated during the quarter.

In the semiconductor equipment space, we sold ASML Holding N.V. and redeployed some of that capital into initiating an investment in Nova Ltd., a company Baron Discovery Fund has been an investor in for many years, and which has long been on our watch list.

We also trimmed positions in Apple Inc. and GDS Holdings Limited, and utilized that cash to add to our exposure in semiconductors and software as discussed above.

Looking ahead, our focus is unwavering: owning category-defining technology businesses that sit at the heart of durable, secular growth trends. Led by visionary, execution-driven management teams, these companies convert breakthrough innovation into expanding free cash flow. We believe this combination uniquely positions the Fund to compound our investors’ capital over the long term.

Sincerely,