Baron Funds, an investment management company, released its “Baron Real Estate Fund” second quarter 2023 investor letter. A copy of the same can be downloaded here. In the first half of 2023, the fund rose 15.00% (Institutional Shares) compared to a 4.78% return for the MSCI US REIT Index (the “REIT Index”) and a 12.11% return for the MSCI USA IMI Extended Real Estate Index (the “MSCI Real Estate Index”). The fund rose 7.41%, modestly outperforming the indexes in the second quarter, which returned 2.34% and 7.04%, respectively, in the same period. In addition, please check the fund’s top five holdings to know its best picks in 2023.
Baron Real Estate Fund highlighted stocks like Equinix, Inc. (NASDAQ:EQIX) in the second quarter 2023 investor letter. Equinix, Inc. (NASDAQ:EQIX) is a digital infrastructure company. On July 25, 2023, Equinix, Inc. (NASDAQ:EQIX) stock closed at $816.47 per share. One-month return of Equinix, Inc. (NASDAQ:EQIX) was 6.70%, and its shares gained 27.24% of their value over the last 52 weeks. Equinix, Inc. (NASDAQ:EQIX) has a market capitalization of $76.359 billion.
Baron Real Estate Fund made the following comment about Equinix, Inc. (NASDAQ:EQIX) in its second quarter 2023 investor letter:
“We recently increased the Fund’s exposure to data center REITs by acquiring additional shares in Equinix, Inc. (NASDAQ:EQIX) and re-initiating a position in Digital Realty Trust, Inc.
Data center landlords such as Equinix and Digital Realty are benefiting from record low vacancy, demand outpacing supply, more constrained power availability, and rising rental rates. Several secular demand vectors, which are currently broadening, are contributing to robust fundamentals for data center space globally. They include the outsourcing of information technology infrastructure, increased cloud computing adoption, the ongoing growth in mobile data and internet traffic, and artificial intelligence as a new wave of data center demand. Put simply, each year data continues to grow exponentially, and all of this data needs to be processed, transmitted, and stored – supporting increased demand for data center space. In addition, while it is still early innings, we believe artificial intelligence could not only provide a source of incremental demand but also further accelerate existing secular trends by driving increased prioritization and additional investment in digital transformation among enterprises.
We recently spent time with the management teams at both Equinix and Digital Realty and are optimistic about their prospects. We believe Equinix, the premier global operator of network-dense, carrier-neutral colocation data centers, is well positioned to grow its cash flow per share by more than 10% annually for the next few years.”
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Equinix, Inc. (NASDAQ:EQIX) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held Equinix, Inc. (NASDAQ:EQIX) at the end of first quarter 2023 which was 38 in the previous quarter.
We discussed Equinix, Inc. (NASDAQ:EQIX) in another article and shared the list of best commercial real estate stocks to buy according to hedge funds. In addition, please check out our hedge fund investor letters Q2 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
