Baron Partners Fund

Tesla, Inc. (TSLA) manufactures electric vehicles, including a sedan, CUV, pickup truck, and 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 will continue to grow its automotive business as it benefits from the secular adoption of electric vehicles, its vertical integration, technological innovation, and cost advantage. Tesla 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.

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 and 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. Arch 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.

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.

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. The company's 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. Strong cash generation and a solid balance sheet also provide meaningful M&A optionality.

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 by investing significantly more in R&D each year than its competitors. 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.

The Charles Schwab Corporation (SCHW) is a discount brokerage firm offering securities brokerage and other financial services to individual investors directly and through independent financial advisors. The company has over $11 trillion in assets under custody.
Schwab’s emphasis on customer trust has made it a sterling brand in financial services. We believe its investor services division is well positioned to take share from traditional brokerages. Its institutional business has continued to gain RIA relationships. The company has made acquisitions that broaden its product offering and bring new customers onto the platform. We think Schwab is well positioned to retain clients and lower its industry-leading cost per client asset.

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.

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.

FactSet Research Systems Inc. (FDS) provides financial information to the global investment community.
FactSet serves only a small part of the addressable market, which we estimate at over $20 billion annually. The company offers broader datasets and more advanced portfolio analytics than peers and has a highly regarded customer service model. FactSet has also been expanding into the fixed income and wealth management markets. The company's products are sticky, leading to retention rates of over 95% and high visibility. FactSet generates robust free cash flow, which it has returned to shareholders via share repurchases and dividends.