Baron Funds, an investment management company, released its “Baron Fifth Avenue Growth Fund” first quarter 2025 investor letter. A copy of the letter can be downloaded here. The fund declined 13.4% (Institutional Shares) in the first quarter compared to a 10.0% decline for the Russell 1000 Growth Index and a 4.3% decrease for the S&P 500 Index. The Fund focuses on investing in Big Ideas, which often trade and can be considered long-duration assets. As a result, the portfolio frequently experiences significant stock price fluctuations, particularly in the short term and during periods of extreme market volatility, while the intrinsic values of businesses remain much more stable. Nevertheless, Q1 was a challenging first quarter. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2025.
In its first-quarter 2025 investor letter, Baron Fifth Avenue Growth Fund highlighted stocks such as KKR & Co. Inc. (NYSE:KKR). KKR & Co. Inc. (NYSE:KKR) is an equity and real estate investment firm. The one-month return of KKR & Co. Inc. (NYSE:KKR) was 3.57%, and its shares gained 11.24% of their value over the last 52 weeks. On June 18, 2025, KKR & Co. Inc. (NYSE:KKR) stock closed at $122.42 per share, with a market capitalization of $113.264 billion.
Baron Fifth Avenue Growth Fund stated the following regarding KKR & Co. Inc. (NYSE:KKR) in its Q1 2025 investor letter:
“Our second largest addition in the quarter was to the alternative asset manager, KKR & Co. Inc. (NYSE:KKR). Similarly to Samsara, we took advantage of the volatility in the stock market to add to this great business. While investors are concerned about the potential near-term slowdown in realizations, capital markets activity, and carry (performance fees), we remain focused on the long term. Various secular tailwinds that benefited KKR thus far continue – this includes the growing allocation to alternatives, its diversified asset class exposure, its successful track record of performance, and its significant exposure to the growth of private credit through its ownership of Global Atlantic, which has a differentiated positioning thanks to the structural match in duration between the asset side and the liability side.”
A modern looking financial adviser sitting in front of a trading monitor, gesturing to a group of investors.
KKR & Co. Inc. (NYSE:KKR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 88 hedge fund portfolios held KKR & Co. Inc. (NYSE:KKR) at the end of the first quarter, which was 83 in the previous quarter. While we acknowledge the potential of KKR & Co. Inc. (NYSE:KKR) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. KKR & Co. Inc. (NYSE:KKR) detracted from Baron FinTech Fund’s performance in the first quarter, amid heightened macroeconomic uncertainty and volatile policy shifts. While we acknowledge the potential of KKR & Co. Inc. (NYSE:KKR) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
