TimesSquare Capital Management, an equity investment management company, released its “U.S. Focus Growth Strategy” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. The strategy returned -3.55% (gross) and -3.76% (net) in the fourth quarter compared to a -3.70% return for the Russell Midcap Growth Index. In 2025, the strategy returned 14.84% (gross) and 13.88% (net) compared to 8.66% for the index. Global equity markets ended the quarter on a positive note, with Europe leading, followed by Emerging Markets. In most markets, large caps outperformed small caps. The trade truce between the United States and China was prolonged for an additional year, but global geopolitical concerns, whether related to tariffs or not, persisted. Third-quarter GDP exceeded expectations, but consumer caution persists due to ongoing labor-market softening, influencing the Fed’s decision on interest rate cuts. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, TimesSquare Capital U.S. Focus Growth Strategy highlighted its latest purchase, Karman Holdings Inc. (NYSE:KRMN). Karman Holdings Inc. (NYSE:KRMN) is an American defense technology company that engages in the design and manufacturing of mission-critical systems. On February 19, 2026, Karman Holdings Inc. (NYSE:KRMN) stock closed at $105.95 per share. One-month return of Karman Holdings Inc. (NYSE:KRMN) was 29.81% and gained 203.23% over the past 52 weeks. Karman Holdings Inc. (NYSE:KRMN) has a market capitalization of $14.02 billion.
TimesSquare Capital U.S. Focus Growth Strategy stated the following regarding Karman Holdings Inc. (NYSE:KRMN) in its fourth quarter 2025 investor letter:
“Many of our Industrial positions provide necessary business-to-business operational services, highly technical components, equipment enabling automation & efficiency improvements, or essential infrastructure services. During the quarter we initiated a position in Karman Holdings Inc. (NYSE:KRMN), a missile systems design and manufacturing specialist. Despite good third quarter results, its share price experienced weakness amid a broader sell-off in space and defense stocks, which provided a good entry point. We believe Karman remains well-positioned as a vital picks-and-shovels provider in the defense and commercial space industries. As a critical enabler across the sector, the company supports the replenishment of defense stockpiles, the expansion of commercial satellite constellations like Starlink and Amazon Kuiper, and major Department of Defense investments in hypersonic and air defense systems.”
Karman Holdings Inc. (NYSE:KRMN) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 36 hedge fund portfolios held Karman Holdings Inc. (NYSE:KRMN) at the end of the fourth quarter, up from 34 in the previous quarter. While we acknowledge the risk and potential of Karman Holdings Inc. (NYSE:KRMN) 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 Karman Holdings Inc. (NYSE:KRMN) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Karman Holdings Inc. (NYSE:KRMN) and shared a list of best space exploration stocks to buy according to analysts. Conestoga Capital Advisors added a position in Karman Holdings Inc. (NYSE:KRMN) during Q4 2025, due to its strong organic growth and resilient revenue streams. 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.
