Fred Alger Management, an investment management company, released its “Alger Weatherbie Specialized Growth Fund” first-quarter 2026 investor letter. A copy of the letter can be downloaded here. In the first quarter of 2026, the Class A shares of the Alger Weatherbie Specialized Growth Fund underperformed the Russell 2500 Growth Index. The Information Technology and Consumer Staples sectors contributed to the relative performance, while Health Care and Financials detracted. US equities experienced volatility in the first quarter of 2026, with the S&P 500 Index falling 4.33%. The AI disruption and the U.S.-Iran conflict altered the economic landscape during this period. The Fund focuses on identifying companies that are leveraging AI technology for task automation and workflow management. In addition, please check the Fund’s top five holdings to know its best picks in 2026.
In its first-quarter 2026 investor letter, Alger Weatherbie Specialized Growth Fund highlighted stocks like StepStone Group Inc. (NASDAQ:STEP). StepStone Group Inc. (NASDAQ:STEP) is a leading private market investment firm specializing in primary, direct, fund of funds, secondary direct, and secondary indirect investments. On May 22, 2026, StepStone Group Inc. (NASDAQ:STEP) closed at $53.74 per share. One-month return of StepStone Group Inc. (NASDAQ:STEP) was 7.65%, and its shares lost 8.48% over the past 52 weeks. StepStone Group Inc. (NASDAQ:STEP) has a market capitalization of $6.74 billion.
Alger Weatherbie Specialized Growth Fund stated the following regarding StepStone Group Inc. (NASDAQ:STEP) in its Q1 2026 investor letter:
“StepStone Group Inc. (NASDAQ:STEP) is a global private markets investment firm that provides customized investment solutions, advisory services, and data analytics to institutional investors, including pension funds, sovereign wealth funds, endowments, and family offices. The company invests across private equity, real estate, infrastructure, and private debt, offering clients access to these asset classes through commingled funds, separately managed accounts, and secondary market transactions. During the quarter, shares detracted from performance despite the company reporting record fee revenues and continued growth in assets under management. The primary headwinds were lower performance-related earnings relative to the prior year, driven by the timing of transaction closes and a significant decline in retroactive fee contributions. Broader market concerns around the pace of private market realizations and a risk-off environment for alternative asset managers further weighed on sentiment. Despite the challenging near-term backdrop, we believe StepStone’s expanding platform, growing private wealth business, and deepening client relationships position the company for durable fee-related earnings growth over time.”
StepStone Group Inc. (NASDAQ:STEP) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 57 hedge fund portfolios held StepStone Group Inc. (NASDAQ:STEP) at the end of the fourth quarter, up from 56 in the previous quarter. While we acknowledge the risk and potential of StepStone Group Inc. (NASDAQ:STEP) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than StepStone Group Inc. (NASDAQ:STEP) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered StepStone Group Inc. (NASDAQ:STEP) and shared the list of best financial stocks with the highest upside potential. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
