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Billionaire Ron Baron’s Long-Term Investments Bring Consistent Returns

fund guru Ron Baron


Seated in his 49th floor office in Manhattan’s 50-story General Motors building on Fifth Avenue, 71-year-old financial guru Ron Baron seems to relish expounding on his own Horatio Alger story and the growth of the investment management company he launched 32 years ago, the Asbury Park Press (APP) said.

Baron is a one-percenter who hasn’t forgotten his roots, growing up in and around Asbury Park, New Jersey. He is the founder, chairman, CEO and largest shareholder of Baron Capital Group. Baron Capital manages 13 mutual funds with investments in 450 companies, assets of $26 billion and a million investors, the report said.

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An article in Fortune magazine describes him as “the Warren Buffett of small and mid cap stocks, ” and Forbes magazine lists him among 400 of the richest Americans, estimating his net worth at $2.1 billion.”That’s Forbes’ estimate, ” Baron said, “not mine.”

His GM building headquarters and its 131 employees also take up all of the 48th floor plus the 49th and half of the 47th. Carl Icahn, the activist investor, and the Icahn Enterprises staff occupy the other half of the 47th floor, the report said.

Baron is known as a perennial optimist and as a doting grandfather who has breakfast twice a week with his two grandsons.

“We think the stock market could about double in the next 10 years and double again in the following 10 years” appears to be his stock answer to interviewer queries, APP said.

“I was 14 when I bought my first stock, the Monmouth County Bank, ” he explained. “I talked my father into letting me invest $1, 000, money I’d saved and gotten as Bar Mitzvah gifts.

“Everyday after school I went home to look up the quote on the list of local over-the-counter stocks in the Asbury Park Press. By the time I went to college that investment was worth $4, 000, enhanced by the acquisition of the bank by a larger institution. “Nothing to this, I thought, and I was hooked. Studying and following the market became an obsession.”

Baron Capital investment strategy isn’t very complicated. It looks for small companies with smart, innovative management and significant potential to meet future societal and/or demographic need, takes a position in them, then hangs in for the long haul, 5, 10 maybe even 15 years, and cashes in when the stock takes off, APP said.

On a scale of 1 to 5, Morningstar rates Baron mutual funds an above-average high 3.

The Baron Partners Fund is one of the mutual funds that can be counted on for consistent returns, said.

For decades, Ron Baron’s eponymous fund has made his clients richer by taking a long-term approach to investing in fast-growing small and midsize companies. The fund, which Baron himself runs, has returned 14.4% annualized, beating the Russell Midcap index by an average of 1.7 percentage points per year, the website said.

Baron’s fund can invest in companies of any size, but most of its stocks have market values of less than $10 billion. To find investments, Ron Baron relies on hands-on research that the firm’s 30 or so analysts and fund managers conduct. The goal is to locate growing businesses that are run by smart people and to hold for the long haul–or at least until the potential for growth slows. “We sell when we think we can’t double our money in a four-year period, ” said Baron, according to the website.

The fund has held some stocks for a decade or longer. “The big reason for our consistency in performance is that we have a consistent process, ” said Baron. “And we invest for the long term.”



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