Of the Fund’s top 10 holdings, which represent 93.6% of net assets, only Tesla fell in value. 74.7% of the Fund’s net assets had double-digit returns over the three months ended 2019. And the Fund’s largest investment, CoStar Group, Inc. (NASDAQ:CSGP), increased in value 38.3% in the period. Talk about “disruptive” businesses. That company continues to exceed expectations and introduce new services that are highly coveted by their customer base and a crucial input to their clients’ decision-making process. They still have a sizable addressable market and are making investments to capture incremental clients and sustain revenue growth all while expanding margins. The stock was highly rewarded. CoStar remains entrenched with its customers as a provider of outsourced services. We believe the company can continue to improve its operating margin.
Shares of CoStar Group, Inc., a real estate information and marketing services company, increased on 2019 guidance that beat market expectations. Business trends are excellent, with bookings improving by roughly 15% year-over-year. We are excited about the integration of ForRent into Apartments.com, and we see sustained growth of 20% or more in the multi-family market. We expect the company to begin to raise prices given its unique competitive position in commercial real estate data. We believe CoStar has an exceptionally large opportunity to optimize its Premium Lister product.
From Ron Baron (Trades, Portfolio)'s Baron Partners Fund first-quarter 2019 shareholder letter.
