Baron FinTech Fund

Visa Inc. (V) is a leading global payment network. The company authorizes and facilitates electronic payments for consumers, merchants, and banks.
Visa benefits from consumer spending growth and the secular shift from cash to electronic payments. Most of its revenue comes from international markets, where consumer spending and the adoption rate of electronic payments are rising quickly. The company generates significant free cash flow, which is being returned to shareholders through dividends and share repurchases. We believe Visa enjoys high barriers to entry given its well-established brand, ubiquitous merchant acceptance network, and extensive banking relationships.

Mastercard Incorporated (MA) is a leading global payment network. The company authorizes and facilitates electronic payments for consumers, merchants, and banks.
Mastercard benefits from consumer spending growth and the secular shift from cash to electronic payments. Most of its revenue comes from international markets, where consumer spending and the adoption rate of electronic payments are rising quickly. Margins should continue expanding due to operating leverage. The company generates significant free cash flow, which it uses for acquisitions and share repurchases. We believe Mastercard enjoys high barriers to entry given its well-established brand, ubiquitous acceptance network, and extensive banking relationships.

S&P Global Inc. (SPGI) provides credit ratings, indexes, data, and analytics to the financial, transportation, and commodities markets.
S&P Global benefits from the secular growth of rated bond issuance, the ongoing shift from active to passive investing, and growing demand for data and analytics. The company operates in oligopoly markets, where it enjoys formidable competitive advantages. We expect to see a recovery in rated bond issuance as interest rates stabilize, alongside ongoing benefits from S&P Global’s 2022 merger with IHS Markit. Excess cash flow is being used for accretive acquisitions and is being returned to shareholders through share repurchases and dividends.

Apollo Global Management, Inc. (APO) is one of the world's leading alternative asset managers. The company manages over $700 billion in assets, mostly in credit strategies. It also owns Athene, one of the largest providers of annuities in the U.S.
Apollo has a dominant franchise in private credit, where it has spearheaded the practice of matching insurance liabilities with investment-grade, illiquid credit investments to generate higher returns than peers. We think Apollo will continue to grow in credit and insurance, where it has significant scale and expertise. The company should also see growth in assets, fees, and spread earnings, since it earns management fees on assets as well as excess spread on liabilities following its 2022 merger with Athene.

LPL Financial Holdings Inc. (LPLA) is the largest independent broker-dealer in the U.S., with $1.6 trillion in assets under management. It offers independent financial advisors the technology, brokerage services, and practice management support they need to run their own practice. 
As advisors continue to break away from wirehouses, we believe LPL is an attractive home for them and will continue to win share in this market. It is benefiting from the higher interest rate environment, as it earns interest on its assets. LPL can leverage its economies of scale to generate healthy margins and free cash flow that it can reinvest into its business. With a profitable business, good growth prospects, and underlying tailwinds, we believe LPL is well positioned to continue growing earnings per share at a rapid rate.

Fair Isaac Corporation (FICO) is a data and analytics company focused on predicting consumer behavior through resellable algorithms (FICO Scores) and software (Applications and Decision Management Software).
We believe FICO has meaningful growth opportunities across all its business lines. In FICO Scores, special pricing initiatives in B2B seem likely to continue. In Software, years of substantial investment are bearing fruit and should lead to notable margin expansion over the next several years. Management has a shareholder-friendly capital allocation strategy with nearly all free cash flow used for share repurchases.

Fiserv, Inc. (FI) is one of the world's largest payment processing companies, enabling merchants to accept electronic payments and financial institutions to issue credit cards. It is both a merchant acquirer and a card issuer processor and owns other payment-related businesses. 
Fiserv leverages efficiencies of scale to deliver low-cost solutions, a critical advantage in payments. Its products tend to be sticky, and it is led by a highly experienced management team with significant equity ownership. Fiserv's strategic acquisitions have helped it grow faster than peers, and the company has a long history of expanding EPS at a double-digit rate. As a leading industry player with differentiated payment offerings, we think Fiserv will continue to grow revenue and earnings over time.

KKR & Co. Inc. (KKR) is one of the world's leading alternative asset managers. The company manages more than $600 billion in assets, with large franchises in private equity, real assets, and credit. KKR also owns a large retirement insurance company, Global Atlantic.
KKR has strong franchises in alternative asset management, having successfully diversified from its buyout roots into private equity, credit, and real assets. These strategies are in early stages of maturation, positioning KKR to raise over $300 billion from 2024 to 2026 and eventually grow assets under management to more than $1 trillion. KKR also owns an insurer, Global Atlantic, which should continue compounding as it leverages KKR's asset sourcing capabilities, driving growth in both fee and spread earnings.

Intuit Inc. (INTU) specializes in financial software, including accounting software for small businesses and tax preparation software for individuals.
Intuit has leading positions in two large markets: small business accounting and individual tax preparation. The company's QuickBooks product is used by 8 million businesses for accounting, payroll, and other business management processes. TurboTax is the leader in individual tax preparation software, but with just 28% share of total U.S. tax returns, the company still has a long runway for growth. Management targets double-digit revenue growth, with expanding margins and ample cash flow generation over the long term.

Tradeweb Markets Inc. (TW) operates electronic marketplaces for trading rates, credit, equities, and money markets.
Tradeweb is benefiting from the electronification of the fixed income market and is gaining share from less innovative competitors. Tradeweb enjoys network effects from pooling liquidity from its more than 2,800 clients and benefits from high switching costs due to its deep integration into client technology and workflows. We expect margin expansion to be driven by operating leverage and efficiency initiatives.

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