Despite Sale, Baron Capital Maintains Outlook on Ventas (VTR)

Baron Capital released its Q2 2026 letter for the Baron Real Estate Income Fund, reporting a 12.18% gain for the quarter, slightly surpassing the MSCI US REIT Index's 11.84% increase. The letter also highlights the Fund's strong long-term performance, ranking at #2 among real estate funds since its inception in December 2017. Management believes a multi-year recovery in real estate is underway, despite factors such as elevated interest rates, housing affordability pressures, and AI-related disruption.

The Fund remains optimistic about the Fund's growth, rising dividends, and potential valuation normalization. In the letter, Baron Real Estate Income Fund noted that they maintain a bullish outlook on Ventas, Inc. (NYSE:VTR), a real estate investment trust catering to an aging population. However, they decided to reduce their exposure to the REIT category due to strong relative performance and the pursuit of more attractively valued REITs.

The Fund may consider acquiring shares of Ventas, Inc. (NYSE:VTR) in the future, despite it not being on their list of the 40 Most Popular Stocks Among Hedge Funds.