This week, we speak with legendary fund manager Ron Baron of Baron Funds. Founded in 1982, the firm is known for long-term, fundamental, active approach to growth investing, and has $49 billion in AUM. 16 of 17 Baron Funds, representing 98.3% of assets outperformed their passive benchmark since inception; the Baron Partners Fund was up +148% in 2020.
We discuss how as a broker in the 1970s, Baron was buying small cap companies such as Disney and Hyatt and International Gaming — they were considered small cap back then. He would flip them for doubles and triples, only to watch them rise another 30X. The impact of this on Baron was to turn him into a super long-term holder of equities.
He explains how he has owned Charles Schwab since 1992, Choice Hotels since 1996, Veil Resorts since 1997. His current turnover ratio ranges from 3-7% depending on the fund. Compare this with mutual funds that have turnover ratios of 50%, 100% even 200% per year.
A transcript of our conversation is available here Monday.
You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Stitcher, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here.
Be sure to check out our Masters in Business next week with Kevin Landis, Firsthand Funds