B
aron Funds, a leading investment management company, released its first-quarter 2025 investor letter for the Baron Real Estate Fund. The fund's performance was impacted by economic growth slowdown, inflation, and policymaking issues, resulting in a decline of 6.69% (Institutional Shares) compared to a 3.11% decline for the MSCI USA IMI Extended Real Estate Index and a 0.76% gain for the MSCI US REIT Index.

    The fund's top holdings include CBRE Group, Inc., a commercial real estate services and investment company that has seen significant growth in recent months. In its Q1 2025 investor letter, Baron Real Estate Fund highlighted CBRE Group, Inc.'s potential to benefit from structural and secular tailwinds, including the outsourcing of commercial real estate and opportunities to increase market share in a highly fragmented market.

    According to the fund's analysis, CBRE Group, Inc. may generate annual earnings per share growth of over 20% in the next few years, driven by a rebound in commercial real estate sales and leasing activity. The company's stock has performed well, with a one-month return of 9.73% and a 40.21% gain over the last 52 weeks.

    However, it's worth noting that CBRE Group, Inc. is not among the top holdings of our list of popular stocks among hedge funds. While the company may hold potential as an investment, our analysis suggests that AI stocks may offer greater promise for delivering higher returns within a shorter timeframe.