iMGP Global Partner, an investment management company, released its fourth quarter 2025 investor letter for the “iMGP Small Company Fund”. A copy of the letter can be downloaded here. The Fund returned 1.33% in the fourth quarter compared to the Russell 2000 Index’s 2.19% return. The Fund’s returns were flat at 0.01% in 2025, compared to a 12.81 return for the Index. In many respects, the market situation returned to normal in the fourth quarter. The Fund’s poor performance in the fourth quarter was caused by the biotech businesses’ impressive performance, which increased by more than 25%. The Fund generally avoids biotech stocks due to their extremely binary character. The majority of the year’s underperformance happened in the third quarter due to style-related factors. Moving forward to 2026, the Fund hoped to continue to refine its process and improve its performance with a commitment to invest in high-quality, growing firms. Please review the Fund’s top five holdings to gain insights into their key selections for 2025.
In its fourth-quarter 2025 investor letter, iMGP Small Company Fund highlighted stocks like AppFolio, Inc. (NASDAQ:APPF). AppFolio, Inc. (NASDAQ:APPF) is a US-based technology company that provides cloud-based platform for the real estate industry. On March 06, 2026, AppFolio, Inc. (NASDAQ:APPF) stock closed at $191.17 per share. One-month return of AppFolio, Inc. (NASDAQ:APPF) was 4.02%, and its shares lost 11.34% over the past 52 weeks. AppFolio, Inc. (NASDAQ:APPF) has a market capitalization of $6.88 billion.
iMGP Small Company Fund stated the following regarding AppFolio, Inc. (NASDAQ:APPF) in its fourth quarter 2025 investor letter:
“AppFolio, Inc. (NASDAQ:APPF) is a cloud-based software, data, and services provider to the real estate industry with a focus on small to medium-sized property managers. Results in the quarter were negatively impacted by a bonus accrual impact that caused margins to contract in 2025. This was a surprise. Our understanding is that this bonus accrual was partly driven by new units added. Long-term, this is a good problem to have. Every new customer APPF adds should have an extremely high lifetime value. We attended APPF’s Investor Day intra quarter and came away more confident in APPF’s ability to add solutions that further build that lifetime value. We view APPF management as disciplined operators and would argue that appropriately compensating employees for new business is important. We suspect that the stock was also negatively impacted by concerns around AI. APPF has a direct AI native competitor for certain modules – EliseAI. APPF is introducing comparable solutions in 2026. We’re positive on AI for APPF long-term as APPF controls their own destiny as a system of record, serves SMBs, already has unit-based pricing rather than seat-based pricing, and has generally executed well on product, including AI.”
AppFolio, Inc. (NASDAQ:APPF) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 33 hedge fund portfolios held AppFolio, Inc. (NASDAQ:APPF) at the end of the fourth quarter, compared to 40 in the previous quarter. In Q4 2025, AppFolio, Inc. (NASDAQ:APPF) revenue reached $248 million, marking a 22% year-over-year increase. While we acknowledge the risk and potential of AppFolio, Inc. (NASDAQ:APPF) 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 AppFolio, Inc. (NASDAQ:APPF) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered AppFolio, Inc. (NASDAQ:APPF) and shared a list of best 52-week low technology stocks to buy. 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.
