Baron Capital, an investment management company, released its Q4 2025 letter for its “Baron Real Estate Income Fund”. A copy of the letter can be downloaded here. In 2025, the Fund appreciated 3.74% (Institutional Shares), exceeding the 1.68% gain for the MSCI US REIT Index (the REIT Index). In Q4 2025, the Fund declined modestly by 0.40%, outperforming the Index’s 1.99% decline. In contrast to the substantial double-digit growth delivered in 2023 and 2024, the Fund’s modest performance in 2025 can be attributed to a variety of factors, such as stronger relative growth in several sectors outside of real estate, ongoing interest rate headwinds, and specific REIT subcategory headwinds. As of December 31, 2025, the Fund’s net assets are as follows: REITs (71.2%), non-REIT real estate companies (25.0%), and cash and cash equivalents (3.8%). Also, the Fund currently has investments in 13 REIT categories. Heading into 2026, the Firm is optimistic about the prospects for the stock market and the Baron Real Estate Income Fund. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, Baron Real Estate Income Fund highlighted stocks such as American Tower Corporation (NYSE:AMT). American Tower Corporation (NYSE:AMT) is a leading independent multitenant communications real estate operator. On April 2, 2026, American Tower Corporation (NYSE:AMT) closed at $173.73 per share. One-month return of American Tower Corporation (NYSE:AMT) was -7.88%, and its shares lost 21.09% over the past 52 weeks. American Tower Corporation (NYSE:AMT) has a market capitalization of $81.33 billion.
Baron Real Estate Income Fund stated the following regarding American Tower Corporation (NYSE:AMT) in its fourth quarter 2025 investor letter:
“Shares of American Tower Corporation (NYSE:AMT) underperformed during the fourth quarter and lagged REITs broadly. While reported results were strong, growing investor concerns about the contractual commitments of a small customer (DISH) and associated potential churn timing/impacts after EchoStar divested its U.S. spectrum came to the forefront during the quarter. Along with its quarterly release, American Tower disclosed that it received a letter from DISH stating their view that they were absolved from any remaining contractual payments after its spectrum divestiture. American Tower subsequently filed a lawsuit to enforce its contractual rights. While DISH is only 2% of overall revenues, growth will likely be impacted in the near term and it make take some time to reach a final resolution (likely resulting in a “one-time” termination payment).
American Tower is a global owner of 150,000 wireless tower communication sites with a heavy emphasis on developed markets. We acknowledge the market’s concern regarding lack of growth clarity for what is typically a highly predictable infrastructure business and the case for the shares to be range bound for a period. Notwithstanding, American Tower remains attractively valued on an absolute basis and relative to other data infrastructure companies, the company’s business is underpinned by the continued secular growth in mobile data, bookings activity is improving, and we believe the company will be able to deliver consistent mid-digit underlying per share organic earnings growth with optionality around capital allocation levers such as share repurchases on top of a growing 4% current dividend yield.”
American Tower Corporation (NYSE:AMT) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 71 hedge fund portfolios held American Tower Corporation (NYSE:AMT) at the end of the fourth quarter, compared to 75 in the previous quarter. While we acknowledge the risk and potential of American Tower Corporation (NYSE:AMT) 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 American Tower Corporation (NYSE:AMT) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered American Tower Corporation (NYSE:AMT) and shared the list of most profitable real estate stocks. In addition, please check out our hedge fund investor letters Q4 2025 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.
