Baron Asset Fund

Gartner, Inc. (IT) is the leading independent provider of research and advisory services for IT, HR, sales, finance, and marketing leaders.
Gartner has a vast addressable market, which management estimates exceeds $70 billion annually, implying a penetration rate of less than 3%. IT is rapidly changing and growing in strategic importance, leading users to turn to third-party providers for insight into trends. Gartner enjoys retention rates of more than 100%, driven by the low price of its research relative to value. We think consistent execution in Global Technology Sales and improvements in Global Business Sales will help accelerate Research growth into the low double digits.

Guidewire Software, Inc. (GWRE) is a leading provider of core systems software to the global P&C insurance industry.
Guidewire is a small player in a vast addressable market and has been benefiting from the need for P&C insurers 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. The company has passed the midpoint of its cloud transition, and we expect to see accelerating revenue, expanding margins, and improving free cash flow over the next several years. We believe that recent M&A in the vertical software space supports a meaningful value creation opportunity for shareholders.

IDEXX Laboratories, Inc. (IDXX) is the leading provider of diagnostics to the veterinary industry.
IDEXX has benefited from secular growth spending on pets due to a growing human-animal bond, favorable demographics, increased use of diagnostics, and enhanced focus on preventative care. We think IDEXX has the best menu of diagnostics, which it continuously improves by spending six times more on R&D annually than all its competitors combined. The company's products are sold via a razor/razorblade model, which creates high retention rates and incremental margins. IDEXX generates strong cash flow, which it has returned to shareholders via repurchases.

Verisk Analytics, Inc. (VRSK) provides risk information to insurance companies that enables them to better understand and manage risks and optimize decision-making processes.
We believe Verisk has a unique competitive position. The company is investing in the expansion of its product set in insurance and has divested its financial services and energy segments. We think the pure-play focus on insurance offers an attractive financial profile with mid- to high-single-digit organic growth, robust margins (with room for expansion), and strong free cash flow generation.

Space Exploration Technologies Corp. (SPACEX.A) 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.

Arch Capital Group Ltd. (ACGL) is a Bermuda-based insurance company providing property & casualty insurance, reinsurance, and mortgage insurance.
Arch is led by an experienced management team with a successful track record across insurance cycles. The company excels at underwriting specialized policies and can nimbly shift its business mix to target the most profitable lines as market conditions change. It operates in a large global market and benefits from favorable pricing trends across many of its product lines. Management has demonstrated strong underwriting discipline and capital stewardship, allowing Arch to maintain industry-leading returns on equity with less volatility.

CoStar Group, Inc. (CSGP) is the leading provider of information and marketing services to the commercial real estate industry.
CoStar has built a proprietary database through data collection over a 20-year period, creating high barriers to entry. We think CoStar's suite should grow at mid-teens rates, and we believe its Loopnet marketing platform can grow even faster. Its Apartments.com platform is the dominant multi-family internet listing service and should grow revenue by more than 20%. CoStar is starting to expand into residential, creating additional significant growth opportunities. Its balance sheet and cash generation create M&A optionality.

Fair Isaac Corporation (FICO) is a data and analytics company focused on predicting consumer behavior through resellable algorithms (FICO Scores) and software (Applications and Decision Management Software).
We believe FICO has meaningful growth opportunities across all its business lines. In FICO Scores, special pricing initiatives in business-to-business seem likely to continue. In Software, years of substantial investment are bearing fruit and should lead to notable margin expansion over the next several years. Management has a shareholder-friendly capital allocation strategy with nearly all free cash flow used for share repurchases.

Roper Technologies, Inc. (ROP) operates market-leading businesses that design and develop vertical software and technology-enabled products for a variety of defensible niche markets.
Roper owns a portfolio of high-quality niche businesses that have generated substantial cash flow due to high margins and low capital requirements. The company seeks growth in sales and earnings by emphasizing continuous improvement in the operating performance of the core business. Roper has been using the cash generated and a modest amount of leverage to make acquisitions consistent with its investment thesis and make the business larger and more capital light. The company has a long-term track record of compounding cash flow.

Amphenol Corporation (APH) is one of the world's largest providers of high-technology interconnect, sensor, and antenna solutions.
Amphenol has a strong history of shareholder value creation. The company benefits from diverse end-market exposure as well as its decentralized operating culture, which allows for balanced performance among economic and market cycles. Amphenol creates value by deploying around 50% of cash flow toward acquisitions in the fragmented sensor and connector space and returning the other 50% to shareholders through dividends and share buybacks. We think the secular trend of electronification is a major tailwind for Amphenol.