Baron Focused Growth Fund

Space Exploration Technologies Corp. (SpaceX) designs, manufactures, and launches rockets, satellites, and spacecrafts. Its ultimate goal is to make humanity multi-planetary. Products include reusable orbital launch offerings and a broadband service leveraging its satellite constellation, Starlink.
We believe SpaceX will continue to drive down the cost of space launches and capture market share with its unique, reliable, and improving reusable launch capabilities. As costs decline, we also expect demand for access to space to increase. By leveraging its launch cost leadership, vertical integration, and innovative design approach, SpaceX has an advantage in building and operating its rapidly expanding satellite-based broadband services, creating an even more attractive growth profile for the company.

Tesla, Inc. (TSLA) manufactures electric vehicles including sedans, SUVs/CUVs, a pickup truck, and a semi-truck. The company is also ramping up internal battery cell production, energy solutions, robotics offerings such as full self-driving and humanoids, and renewable energy generation and storage solutions.
We expect Tesla to continue growing its automotive business as it benefits from the secular adoption of electric vehicles, vertical integration, technological innovation, and cost advantages. The company is also leveraging its core automotive technologies to address the rapidly growing energy storage segment. In addition, Tesla's software and AI expertise is broadening the industrial opportunity to large and profitable revenue avenues that were previously locked in the legacy vehicle architecture, such as autonomous driving, robotics, insurance, and other AI use cases.

MSCI Inc. (MSCI) provides investment decision support tools to global investment institutions.
We believe MSCI, the de facto standard for measuring global market performance, is positioned to benefit from the continuing development of emerging markets, passive investing, sustainability, and the growth of global financial assets. We believe the company's indexes remain the global standard for cross-border investing and will continue to be selected by institutions when issuing new mandates. Both its index and multi-asset portfolio and risk analytics products are mission critical and deeply embedded in client workflows.

Shopify Inc. (SHOP) is a cloud-based software provider offering an operating system for multi-channel commerce. The company serves over 3 million merchants that processed $375 billion of gross merchandise value (GMV) last year. Shopify is the second-largest e-commerce player in the U.S., as measured by GMV.
Shopify offers a scalable, end-to-end commerce platform that serves merchants of all sizes, including offline, international, and B2B businesses. Its aggregate scale, innovation, and ecosystem of partners allow merchants to run every part of their business on the Shopify platform. The company's access to real-time, transaction-level data across its merchant base strengthens its competitive position, allowing it to share the benefits of scale directly with its merchants. With less than 2% share of $25 trillion in global commerce (ex China), it has a long runway for growth.

Spotify Technology S.A. (SPOT) is the world's leading music streaming service, with approximately 40% market share. The company monetizes through several tiers of subscriptions, advertising, and miscellaneous a la carte pricing. 
With over 290 million paying subscribers, Spotify has created a two-sided marketplace where creators can monetize their work and consumers can stream music. Longer term, we expect the company to grow to over 1 billion subscribers (from 751 million today) and improve margins materially through advertising, its artist promotions marketplace, audiobooks, and improved cost discipline. We expect Spotify to continually improve its value proposition through additional features like video, and monetize this value through more optimized pricing tiers like Super Premium.

Hyatt Hotels Corporation (H) is a global hospitality company with 1,363 Hyatt-branded properties representing 326,845 keys. The company's brands include Park Hyatt, Grand Hyatt, Hyatt Regency, Hyatt, Hyatt Place, and Hyatt Summerfield Suite. It derives 90% of EBITDA from fees and 10% from owned assets.
We believe Hyatt has a significant opportunity to market more of its brands globally, given an undersupply of rooms across the world. Compared to peers, Hyatt has the lowest global brand penetration and the largest pipeline of unit growth. We believe its asset-light strategy and strong balance sheet, coupled with robust pricing for hotel assets, give Hyatt an opportunity to generate strong growth in earnings and cash flow, which the company could use for buybacks and tuck-in acquisitions.

Interactive Brokers Group, Inc. (IBKR) is an automated global electronic broker. The company provides low-cost execution, clearing, and settlement of trades for retail and institutional customers across multiple asset classes and currencies.
Interactive Brokers is gaining share due to its advanced technology, quality of execution, and low trading costs. We expect the company to continue growing rapidly through international expansion and as domestic RIAs depart traditional institutions to launch their own firms. Interactive Brokers' competitive advantage comes from automation through best-in-class software engineering, which enables it to offer industry-low costs to customers. Founder and Chairman Thomas Peterffy is well regarded and is the company's largest shareholder.

Birkenstock Holding plc (BIRK) is a global footwear brand with roots dating back to 1774. Best known for its iconic “Arizona” and “Boston” sandals, the brand has been embedded in U.S. culture since the 1960s and 1970s. Birkenstock sells more than 30 million pairs of sandals annually in more than 90 countries.
Birkenstock’s timeless brand and loyal customer base position it well to continue gaining share in the large global footwear market. The company is also poised to benefit from secular trends such as increased focus on health and wellness, the casualization of fashion, and rising consumer demand for comfort. We believe Birkenstock can grow revenue in the mid to high teens over the medium term, driven by strength in its core styles, an expanding year-round product mix, a growing number of stores, and geographic expansion.

Guidewire Software, Inc. (GWRE) is a leading provider of core systems software to the global property and casualty (P&C) insurance industry.
Guidewire is a small player in a vast addressable market and benefits from P&C insurers’ need to upgrade 30-year-old systems. The company offers best-in-class functionality, as evidenced by its growing installed base and near-100% retention rates. After a multi-year transition period, we think Guidewire’s cloud migration is largely complete, and we expect accelerating revenue, expanding margins, and improving free cash flow over the next several years. We believe recent M&A in the vertical software space supports a meaningful value creation opportunity for shareholders.

On Holding AG (ONON), a Swiss premium performance sports brand specializing in footwear (roughly 95% of revenue), is one of the fastest-growing scaled athletic wear companies in the world. The company was founded in 2010 and continues to gain market share in the athletic footwear category. 
On is an innovative lifestyle brand blending technical performance with fashion and lifestyle elements to deliver a lineup of footwear, apparel, and accessories. We believe On is still early in its lifecycle as it expands its product line and distribution network. On benefits from strong brand loyalty, its commitment to sustainability, a focus on innovation, and a highly complementary, multi-channel distribution strategy. The sportswear market is a $355 billion-and-growing opportunity, of which On has a small share, implying a long growth runway.