Baron Partners Fund: An In-Depth Look for Growth-Focused Investors

The Baron Partners Fund stands as a compelling option within the Baron Select Funds family, particularly for investors who are oriented towards long-term capital appreciation. This fund distinguishes itself by concentrating its investments in a select portfolio of growth-oriented companies, primarily within the U.S. market. This article delves into the essential aspects of the Baron Partners Fund, drawing from its official prospectus to provide a comprehensive understanding for prospective investors. We will explore the fund’s investment philosophy, strategies, inherent risks, historical performance, cost structure, and the management expertise behind it. This detailed examination is designed to equip you with the knowledge necessary to determine if the Baron Partners Fund aligns with your investment objectives and risk tolerance.

Investment Goal and Principal Strategies of Baron Partners Fund

The core objective of the Baron Partners Fund is capital appreciation. This singular focus guides the fund’s investment decisions and strategies, making it a vehicle designed for investors seeking growth over the long haul. BAMCO, Inc., the investment adviser, employs a distinctive approach to achieve this goal, centering on identifying and investing in businesses that exhibit strong potential for significant value increase.

Identifying Companies with Favorable Price-to-Value Characteristics

BAMCO’s investment strategy begins with a rigorous search for companies that they believe are undervalued relative to their intrinsic worth. This assessment is rooted in the adviser’s in-depth analysis of the businesses’ future growth prospects and potential profitability. The fund doesn’t simply chase market trends; instead, it seeks out companies where the current market price does not yet reflect the anticipated future success and expansion of the business. This value-oriented approach means the fund is constantly looking for opportunities where they can invest in companies before their long-term growth trajectories are widely recognized by the broader investment community.

Focus on Well-Managed Businesses with Long-Term Growth Prospects

Beyond just undervaluation, the Baron Partners Fund prioritizes companies that are characterized by strong management teams, substantial long-term growth opportunities, and significant barriers to competition. This trifecta is crucial to the fund’s investment philosophy.

Well-Managed Companies: The fund seeks out businesses led by capable and experienced management teams. Strong leadership is considered a critical factor in navigating market challenges and capitalizing on growth opportunities. The prospectus highlights that the adviser’s research process includes direct engagement with company management, their competitors, and customers, allowing for a first-hand assessment of leadership quality and strategic direction.
Significant Long-Term Growth Prospects: The fund is not interested in short-term gains or fleeting trends. Instead, it focuses on identifying companies positioned to benefit from enduring “mega-trend” opportunities. These are businesses that operate in sectors or niches with long-lasting growth potential, offering a runway for sustained expansion over many years.
Barriers to Competition: A key element of the fund’s strategy is to invest in companies that possess strong competitive advantages. These barriers can take many forms, such as proprietary technology, strong brand recognition, dominant market share, or unique business models that are difficult for competitors to replicate. This focus on sustainable competitive advantages aims to protect the long-term profitability and growth of the fund’s investments.

BAMCO’s Research-Intensive Approach

To effectively implement these strategies, BAMCO employs a comprehensive, research-intensive investment process. This goes beyond typical financial analysis and involves deep, fundamental research into the businesses they consider for investment.

Company Visits and Management Interviews: A cornerstone of BAMCO’s research is direct engagement with company management. This involves on-site visits and in-depth interviews to gain a thorough understanding of the business, its operations, strategy, and competitive landscape.
Competitor and Customer Insights: The research extends beyond the target company itself to include discussions with major competitors and customers. This provides a 360-degree view of the company’s position in the market, its strengths and weaknesses relative to peers, and customer perceptions of its products or services.
Industry Data and Trend Analysis: BAMCO’s research also incorporates a detailed study of industry data, statistics, and trends. This macroeconomic perspective helps to contextualize individual company analysis within the broader industry landscape and identify emerging opportunities or threats.

Through this extensive research process, the adviser seeks to identify companies that not only have the potential for substantial growth within a four to five-year timeframe but also possess the management quality, employee morale, and reputations to sustain that growth over the long term.

Long-Term Investment Horizon

The Baron Partners Fund is explicitly designed for long-term shareholders. The fund adopts a patient, long-term outlook, often holding investments for several years. This perspective allows the fund to benefit from the compounding effect of business growth and stock price appreciation over time. The prospectus clearly states that the fund is “not designed nor intended to be suitable for investors who intend to purchase and then sell their Fund shares within a six-month period.” This emphasis on a long-term horizon is a defining characteristic of the Baron Partners Fund and should be a key consideration for potential investors.

Non-Diversified Nature and Focused Investments

It is important to note that the Baron Partners Fund is a non-diversified fund. This means it has the flexibility to concentrate its investments in a smaller number of companies where the adviser has the highest conviction. While this strategy can potentially lead to higher returns if those concentrated bets pay off, it also introduces a higher degree of risk. A non-diversified portfolio is inherently more volatile and susceptible to significant fluctuations based on the performance of a few key holdings.

Potential Use of Leverage and Short Selling

To further enhance returns and manage risk, the Baron Partners Fund has the flexibility to employ leverage and short selling strategies, although the prospectus indicates these tactics are used judiciously.

Leverage: The fund may borrow money from banks, up to one-third of its total assets, to increase its investment capacity. Leverage can magnify both gains and losses. While it can boost returns in a rising market, it can also amplify losses during market downturns. The fund’s use of leverage is a calculated risk taken to potentially enhance long-term growth.
Short Sales: The fund may also engage in short selling, a strategy where it borrows and sells securities it does not own, anticipating a price decline. If the price falls as expected, the fund profits by buying back the securities at a lower price and returning them to the lender. However, short selling carries significant risk, as potential losses are theoretically unlimited if the security price rises instead of falls. The fund limits its short positions to no more than 35% of its total assets and expects to use this tactic “relatively infrequently,” primarily to potentially reduce short-term volatility in equity markets.

Investment in Private Equity

Adding another layer of uniqueness, the Baron Partners Fund may also invest in private equity. These investments can occur in two main scenarios:

Companies Taken Private: If a publicly held company already in the fund’s portfolio is acquired and taken private by a private equity firm, the fund may continue to hold an investment in the private entity.
Direct Private Company Investments: The fund may also make direct investments in private companies through established relationships with private company managements. This provides access to potentially high-growth opportunities outside of the public markets, although private equity investments are typically less liquid and carry their own set of risks.

Principal Investment Risks Associated with Baron Partners Fund

Investing in the Baron Partners Fund, like any investment, involves inherent risks that potential investors should carefully consider. The prospectus outlines several key risk factors that are particularly relevant to this fund.

General Stock Market Risk

The fund invests primarily in equity securities, making it subject to the fluctuations of the stock market. Stock values can change significantly based on a wide range of factors, many of which are beyond the control of any single company or investor. These factors include:

Economic Conditions: Macroeconomic trends, such as economic growth, inflation, interest rates, and unemployment, can significantly impact stock market performance.
Political Events: Political instability, policy changes, and international relations can create market uncertainty and volatility.
Market Sentiment: Investor confidence and overall market psychology can drive short-term market movements, sometimes irrespective of underlying company fundamentals.

Because stock markets are inherently volatile, investors in the Baron Partners Fund must be prepared for potential declines in their investment value. The prospectus emphasizes that “when you sell your investment in the Fund you may receive more or less money than you originally invested.”

Risks of Large Positions

The fund’s strategy of taking large positions in its highest-conviction companies amplifies certain risks.

Concentration Risk: When a significant portion of the fund’s assets are invested in a small number of holdings, the performance of the fund becomes heavily reliant on the success of those specific companies. If one of these large positions performs poorly, it can have a disproportionately negative impact on the fund’s overall returns.
Liquidity Risk: Large positions can also pose liquidity risks. If the fund needs to sell a substantial amount of a particular stock, it may be difficult to do so without negatively affecting the stock’s price, especially if the stock has limited trading volume. The prospectus notes that large positions “may represent a significant part of a company’s outstanding stock, and sales by the Fund could adversely affect stock prices.”
Increased Volatility: Due to the concentration risk, the fund’s returns are likely to be more volatile than those of a more diversified fund. This means investors should expect potentially larger swings in the fund’s value, both positive and negative.

Specific Security Risk

The fund’s performance is directly tied to the success of the individual securities it holds, both long and short positions.

Long Positions: The prospectus points out that “Earnings, cash flows and valuations projected by the Adviser for a long position may not be achieved.” If the adviser’s analysis of a company’s growth prospects proves overly optimistic, or if unforeseen challenges arise for the company, the stock price may not appreciate as anticipated, negatively impacting the fund’s portfolio.
Short Positions: Conversely, for short positions, “the company or the securities markets may have favorable developments or news that positively affect the stock market price of that company which, in turn, could result in a loss for the Fund.” Short selling inherently involves the risk that the stock price will move against the fund’s bet, leading to losses.

Small and Medium-Sized Company Risk

The Baron Partners Fund invests in companies of all sizes, but it has a particular focus on small and medium-sized companies. While these companies often offer higher growth potential, they also come with increased risks.

Less Established Businesses: Small and medium-sized companies typically have shorter operating histories, less financial resources, and narrower product or service lines compared to large, established corporations. This makes them more vulnerable to economic downturns, competitive pressures, and unexpected business challenges.
Market Volatility and Liquidity: Securities of smaller companies tend to be less actively traded and may experience greater price volatility than those of larger companies. They can also be more difficult to sell, especially during market downturns, potentially limiting the fund’s ability to exit positions quickly or at favorable prices.
Management Dependence: Smaller companies often rely heavily on the expertise and continuity of their key management personnel. The loss of a key executive could significantly disrupt the company’s operations and future prospects.

The prospectus underscores that “Investing in small and medium-sized companies requires a long-term outlook and may require shareholders to assume more risk and to have more patience than investing in the securities of larger, more established companies.”

Growth Investing Risk

The fund’s focus on growth stocks introduces another layer of risk.

Valuation Sensitivity: Growth stocks are often characterized by high valuations relative to their current earnings or assets. This makes them particularly sensitive to changes in earnings expectations. If a growth company fails to meet high growth projections, or if broader market sentiment shifts away from growth-oriented investments, these stocks can experience significant price declines.
Volatility: Growth stocks tend to be more volatile than value stocks or the market as a whole. Their prices can fluctuate widely based on investor perceptions of future growth potential, which can be subjective and prone to rapid shifts.

Non-Diversified Portfolio Risk (Concentration Risk)

As previously mentioned, the fund’s non-diversified nature is a significant risk factor.

Higher Potential for Loss: A concentrated portfolio is inherently more susceptible to large swings in value. If a few key holdings perform poorly, or if the sectors in which the fund is concentrated experience a downturn, the fund’s overall performance can suffer considerably.
Limited Risk Mitigation: Diversification is a common risk management technique in investing. By holding a wider range of assets across different sectors and asset classes, a diversified fund aims to reduce the impact of any single investment’s poor performance. The Baron Partners Fund, by design, forgoes this broad diversification, accepting a higher level of concentration risk in pursuit of potentially higher returns.

Short Sales Risk

The fund’s ability to engage in short selling adds a unique set of risks.

Unlimited Loss Potential: Unlike traditional “long” investments where the maximum loss is limited to the initial investment, short selling carries theoretically unlimited loss potential. If the price of a shorted stock rises indefinitely, the fund’s losses could mount without limit. The prospectus explicitly states “the loss of value on a short sale is theoretically unlimited.”
Borrowing Costs and Availability: To short sell, the fund must borrow securities. The availability and cost of borrowing securities can fluctuate, impacting the profitability of short positions. If the lender demands the securities back, the fund may be forced to close out its short position at an unfavorable time or price.
Short Squeeze Risk: A “short squeeze” can occur when many short sellers try to cover their positions at the same time, often triggered by positive news or price momentum in the stock. This can drive the stock price sharply higher, forcing short sellers to buy back the stock at escalating prices to limit their losses, further fueling the price increase. The prospectus warns that a short squeeze “could occur, causing the stock price to rise and making it more likely that the Fund will have to cover its short position at an unfavorable price.”

Leverage Risk

The use of leverage, while potentially enhancing returns, also magnifies risks.

Magnified Volatility: Leverage amplifies both gains and losses. In a rising market, leverage can boost returns. However, in a declining market, losses are also magnified, potentially leading to more significant declines in the fund’s net asset value. The prospectus notes that “Use of leverage also tends to magnify the volatility of the Fund’s returns.”
Increased Expenses: Borrowing money incurs interest expenses. If these interest costs exceed the returns generated from investments made with borrowed funds, leverage can actually detract from overall returns.

Long-Term Outlook and Projections Risk

The fund’s long-term investment horizon and reliance on projected future performance introduce risks related to forecasting accuracy.

Uncertainty of Projections: The fund’s investment decisions are based on the adviser’s projections of companies’ long-term growth, cash flows, and valuations. These projections are inherently uncertain and may not materialize as anticipated. Economic conditions, industry dynamics, and company-specific factors can all deviate from expectations, impacting the actual performance of investments.
Impact on Portfolio Performance: If the adviser’s projections prove inaccurate, the fund’s portfolio performance may suffer. The prospectus cautions that “The cash flows and valuations that the Adviser projects for a company may not be achieved, which could negatively affect the impact of that stock in the Fund’s portfolio.”

Foreign Securities Risk

While the fund primarily invests in U.S. securities, it has the flexibility to invest in foreign securities, which introduces additional risks.

Currency Risk: Investments in foreign securities are subject to currency fluctuations. Changes in exchange rates between the U.S. dollar and foreign currencies can impact the dollar value of foreign investments, either positively or negatively.
Political and Economic Instability: Foreign markets can be more susceptible to political and economic instability than the U.S. This includes risks of government policy changes, expropriation, exchange controls, and social unrest, which can negatively impact investment values.
Less Transparency and Regulation: Foreign companies may be subject to different accounting standards, disclosure requirements, and regulatory environments, which can be less stringent than in the U.S., potentially increasing investment risks.
Liquidity and Market Risk: Some foreign markets may be less liquid than U.S. markets, making it more difficult to buy or sell securities at desired prices.

Securities Not Publicly Traded Risk (Illiquidity Risk)

The fund’s ability to invest in private equity and other securities not publicly traded introduces illiquidity risk.

Limited Marketability: Private securities lack a public trading market, making them difficult to sell quickly or at a fair price. This illiquidity can restrict the fund’s ability to exit investments when desired and may necessitate selling at a discount.
Valuation Challenges: Valuing private securities is more subjective and complex than valuing publicly traded securities, as there are no readily available market prices. This can lead to uncertainties in the fund’s net asset value and performance reporting.
Longer Investment Horizon: Investments in private securities typically require a longer investment horizon, as realizing value often depends on events like an IPO or acquisition, which can take several years to materialize.

Tax Risk

As a regulated investment company, the fund aims to minimize its own tax burden by distributing its income to shareholders. However, investors are still subject to tax risks related to their investment in the fund.

Taxable Distributions: Distributions from the fund, including dividends and capital gains, are generally taxable to shareholders. The tax treatment of these distributions can vary depending on their source (ordinary income, qualified dividends, capital gains) and the investor’s individual tax situation.
Tax Law Changes: Changes in tax laws can impact the tax efficiency of the fund and the after-tax returns for investors.

It is crucial for potential investors to carefully review these risks and consider their own risk tolerance before investing in the Baron Partners Fund. The fund’s concentrated portfolio, use of leverage and short selling, and focus on growth companies and private equity all contribute to a higher risk profile compared to more broadly diversified and conservative investment options.

Prior Performance of Baron Partners Fund

Past performance is not indicative of future results, but it provides valuable context for understanding a fund’s historical track record and risk-adjusted returns. The prospectus includes detailed information on the Baron Partners Fund’s prior performance, both as a registered mutual fund and its predecessor partnership.

Long History of Management and Investment Style

It’s important to note that while the Baron Partners Fund was registered as a mutual fund in 2003, it has been managed in the same style and by the same portfolio manager, Ronald Baron, since the predecessor partnership’s inception in 1992. This long-term consistency in management and investment approach is a significant factor for investors to consider. The prospectus emphasizes that “The partnership’s investment goals, policies, guidelines and restrictions were, in all material respects, equivalent to the Fund’s.”

Performance Restatement for Fee Consistency

To provide a comparable historical performance picture, the fund’s annual returns and long-term performance have been “restated to reflect the imposition of the same advisory fee that is charged currently, and to reflect other operating expenses… that would have been applied historically if the Fund had its current fee structure since inception.” This adjustment ensures that the performance data presented is on an apples-to-apples basis with the fund’s current fee structure, providing a more accurate representation of historical returns net of fees.

Annual Returns Bar Chart

The prospectus includes a bar chart visualizing the fund’s annual returns for each year. This visual representation gives investors a quick overview of the fund’s year-by-year performance variability. It also highlights:

Best Quarter: The quarter with the highest return, offering a glimpse of the fund’s potential for strong performance in favorable market conditions.
Worst Quarter: The quarter with the lowest return, illustrating the fund’s vulnerability to market downturns.

Average Annual Total Returns Table

The prospectus also presents a table of “Average Annual Total Returns” for various periods, including 1-year, 5-year, 10-year, and since inception. This table provides a more precise numerical representation of the fund’s long-term performance. Key elements of this table include:

Return Before Taxes: This is the standard measure of total return, reflecting the fund’s performance before considering any tax implications.
Return After Taxes on Distributions: This metric shows the impact of federal income taxes on returns from fund distributions (dividends and capital gains), assuming shares are still held at the end of the period.
Return After Taxes on Distributions and Sale of Fund Shares: This comprehensive after-tax return figure accounts for both taxes on distributions and taxes on any capital gains or losses realized upon selling fund shares at the end of the period. It provides the most complete picture of potential after-tax investment outcomes.
Benchmark Comparisons: The table also includes performance data for relevant market indices, such as the Russell 2000 (small-cap index) and S&P 500 (large-cap index). These benchmark comparisons allow investors to assess the fund’s performance relative to broader market measures. The prospectus notes that these indices “reflect no deductions for fees, expenses or taxes,” highlighting that direct index investing would not incur fund-related costs.

Important Considerations for Performance Data

When reviewing the performance data, it’s crucial to keep in mind:

Past performance is not predictive: Historical returns are not a guarantee of future success. Market conditions, investment strategies, and fund management can all change over time, impacting future performance.
After-tax returns are illustrative: The after-tax return figures are based on the highest individual federal marginal income tax rate and do not include state or local taxes. An individual investor’s actual after-tax returns will depend on their specific tax situation. The prospectus emphasizes “Your actual after-tax returns depend on your own tax situation and may differ from those shown.”
Index comparisons are for context: Benchmark indices provide a general market comparison, but they are not directly comparable to the fund. The fund has a specific investment strategy and risk profile that differs from broad market indices.

Fund Expenses: Understanding the Costs of Investing in Baron Partners Fund

Investing in any mutual fund involves costs, and understanding these expenses is essential for evaluating the overall value proposition. The prospectus provides a clear breakdown of the fees and expenses associated with the Baron Partners Fund.

Annual Fund Operating Expenses Table

This table summarizes the key ongoing expenses that are deducted from the fund’s assets. It includes:

Management Fee: This is the fee paid to BAMCO, Inc., the investment adviser, for managing the fund’s portfolio. For the Baron Partners Fund, the management fee is 1.00% of the fund’s average daily net asset value.
Distribution (12b-1) Fee: This fee, set at 0.25%, is used to cover distribution and shareholder servicing expenses. It’s important to note that “Due to payment of Rule 12b-1 fees, long-term shareholders may indirectly pay more than the maximum permitted front-end sales charge.” This means that over extended holding periods, these ongoing fees can accumulate.
Other Expenses: This category encompasses all other operating expenses, such as administrative, legal, accounting, and custodian fees. For the Baron Partners Fund, these are relatively low, at 0.06%.
Total Operating Expenses: This is the sum of the management fee, distribution fee, and other expenses, representing the total ongoing costs of operating the fund. For the Baron Partners Fund, this is 1.31%.
Interest Expense: This expense, at 0.57%, reflects the cost of the fund’s use of leverage. It will fluctuate depending on the fund’s borrowing levels and interest rates.
Total Annual Fund Expenses: This is the all-inclusive expense ratio, combining total operating expenses and interest expense. For the Baron Partners Fund, the “Total Annual Fund Expenses” is 1.88%.

It’s important to understand that the prospectus notes that “The Adviser has agreed that… it will reimburse certain expenses of the Fund, so that its total operating expenses (exclusive of portfolio transaction costs, interest, and extraordinary expenses) are limited to 1.45% of average daily net assets.” This expense limitation provides a degree of cost control for investors.

Expense Example

To further illustrate the impact of fund expenses, the prospectus includes an example showing the estimated costs of investing $10,000 in the Baron Partners Fund over different time periods (1, 3, 5, and 10 years). This example assumes a 5% annual return and that fund expenses remain constant. While hypothetical, this example helps investors visualize the cumulative effect of expenses over time.

Additional Charges

Beyond the annual fund operating expenses, investors should be aware of potential additional charges:

Retirement Account and Wire Transfer Fees: There may be specific fees associated with retirement accounts or wire transfers.
Broker or Financial Intermediary Fees: If shares are purchased through a broker, dealer, or other financial intermediary, they may charge commissions or transaction fees. The prospectus points out that shares can be purchased “directly without paying a sales charge,” but using intermediaries may involve additional costs.

12b-1 Fees and Long-Term Costs

The prospectus highlights the nature of the 12b-1 fee: “Because the fee is paid out of the Fund’s assets on an on-going basis, over time it will increase the cost of your investment and may cost you more than paying other types of sales charges.” This is a critical consideration for long-term investors. While the 12b-1 fee is relatively modest at 0.25%, its continuous nature means it can accumulate to a significant cost over many years, potentially exceeding what a one-time sales charge might have been.

By carefully reviewing the fund expenses table and example, potential investors can gain a clear understanding of the costs involved in investing in the Baron Partners Fund and factor these costs into their investment decision-making process. Comparing the fund’s expense ratio to similar funds is also a recommended step in evaluating cost-effectiveness.

Financial Highlights: Key Performance Metrics Over Recent Years

The “Financial Highlights” table in the prospectus provides a year-by-year snapshot of the fund’s key financial performance metrics. This data is audited and offers valuable insights into the fund’s financial operations and performance trends over recent fiscal years.

Net Asset Value (NAV) Changes

The table tracks the fund’s Net Asset Value (NAV) per share at the beginning and end of each fiscal year. This shows the year’s overall change in share value, reflecting the combined impact of investment performance and distributions.

Income from Investment Operations

This section details the fund’s income generation and investment gains/losses:

Net Investment Loss: This reflects the fund’s net investment income after deducting expenses. It’s presented as a loss in these highlights, indicating that fund expenses exceeded investment income in these years.
Net Realized and Unrealized Gain on Investments: This captures the fund’s gains from selling investments (realized gains) and the change in value of investments still held in the portfolio (unrealized gains). This is typically the primary driver of the fund’s performance.
Total from Investment Operations: This sums up the net investment loss and net realized/unrealized gain, showing the total income generated from investment activities.

Distributions to Shareholders

This section details how the fund’s investment income and gains are distributed to shareholders:

Net Investment Income Distributions: In the years presented in the table, the fund distributed $0 from net investment income, focusing distributions on realized gains.
Net Realized Gains on Investments Distributions: This shows the amount of capital gains distributed to shareholders.
Total Distributions: This is the total amount distributed to shareholders, combining net investment income and capital gains distributions.

Total Return

The “Total Return” percentage is a key performance metric, showing the overall percentage change in investment value for the year, assuming reinvestment of all dividends and distributions. This is a standard measure of fund performance.

Ratios and Supplemental Data

This section provides important context and expense information:

Net Assets (in millions), End of Year: This shows the fund’s total assets under management at the end of each fiscal year, indicating the fund’s size and growth over time.
Ratio of Total Expenses to Average Net Assets: This is the fund’s expense ratio, expressed as a percentage of average net assets. It reflects the total annual fund expenses as discussed earlier.
Less: Ratio of Interest Expense to Average Net Assets: This isolates the portion of the expense ratio attributable to interest expense from leverage.
Ratio of Operating Expenses to Average Net Assets: This shows the expense ratio excluding interest expense, focusing on core operating costs.
Ratio of Net Investment Loss to Average Net Assets: This ratio, presented as a negative percentage, reflects the net investment loss relative to average net assets.
Portfolio Turnover Rate: This percentage indicates the fund’s trading activity, representing the percentage of the portfolio’s holdings that were bought or sold during the year. A higher turnover rate can suggest a more actively managed fund and potentially higher transaction costs.

Audited Financial Data

It’s important to note that “These financial highlights have been audited by PricewaterhouseCoopers, LLP, the Fund’s independent registered public accounting firm.” This audit provides assurance about the reliability and accuracy of the financial data presented. Investors can also access the full audited financial statements in the annual financial report for more detailed information.

By reviewing the “Financial Highlights” table, investors can track key trends in the fund’s NAV, investment performance, distributions, expenses, and portfolio activity over recent years, gaining a deeper understanding of its financial operations.

Management of the Fund: Expertise and Oversight

Understanding the management team behind a fund is crucial for assessing its capabilities and investment philosophy. The prospectus provides information about the management structure and key personnel of the Baron Partners Fund.

Board of Trustees Oversight

The prospectus states that “The Board of Trustees (the ‘Board’) oversees the management of the Fund.” The Board serves as the governing body of the fund, responsible for protecting shareholder interests and ensuring the fund is managed in accordance with its stated objectives and regulatory requirements. The prospectus mentions that “A list of the Trustees and the Fund’s officers may be found in the SAI” (Statement of Additional Information), which is a supplementary document providing more detailed information.

BAMCO, Inc.: The Investment Adviser

BAMCO, Inc. is identified as the investment adviser responsible for portfolio management. Located in New York, BAMCO makes the day-to-day investment decisions for the Baron Partners Fund. The prospectus also notes that BAMCO serves as investment adviser to other Baron Funds, including Baron Asset Fund, Baron Growth Fund, Baron Small Cap Fund, Baron iOpportunity Fund, and Baron Fifth Avenue Growth Fund. This highlights BAMCO’s role as the central investment management entity for the Baron Funds family.

Baron Capital Group: Parent Company

BAMCO and BCI (Baron Capital, Inc., the distributor) are identified as wholly-owned subsidiaries of Baron Capital Group, Inc. (BCG). This organizational structure clarifies the corporate relationships within the Baron Funds organization.

Key Personnel: Ronald Baron and Linda S. Martinson

The prospectus highlights two key individuals:

Ronald Baron: As the Founder, Chief Executive Officer, and Chairman of the Firm (BCG), Ronald Baron plays a central leadership role. Critically, he is also identified as the portfolio manager of the Baron Partners Fund since its inception in 1992 (as a predecessor partnership). His long tenure provides continuity and deep experience. He also manages Baron Growth Fund and has managed Baron Asset Fund in the past. Additionally, he is “a senior member of the Adviser’s research team and the Chief Investment Officer of the Adviser,” indicating his broad influence on investment strategy and research across the Baron Funds organization.
Linda S. Martinson: As the President and Chief Operating Officer of the Firm, Linda Martinson holds a key executive management position. Her long tenure with the Firm since 1983 suggests deep institutional knowledge and experience within the Baron Funds organization.

Potential Conflicts of Interest

The prospectus acknowledges that “Mr. Baron’s responsibilities to manage other funds and accounts may conflict with his responsibilities to the Fund.” This is a standard disclosure for fund managers who oversee multiple portfolios. Potential conflicts can arise from:

Time Management: Balancing the demands of managing multiple funds and accounts.
Investment Allocation: Deciding which investment opportunities are most suitable for different funds and accounts, especially when opportunities are limited.
Brokerage and Trading: Ensuring fair allocation of trades across different portfolios.

The prospectus states that “The Fund’s SAI provides additional information about Mr. Baron’s compensation, other accounts managed by Mr. Baron and his ownership of securities in the Fund.” Investors seeking deeper insights into potential conflicts and compensation structures should consult the SAI.

Advisory Fee and Expense Limitation

For its services, BAMCO receives an advisory fee of “1% per annum of the Fund’s average daily net asset value.” This is a standard management fee structure for mutual funds. The prospectus also reiterates the expense limitation agreement: “The Adviser is contractually obligated to reimburse certain expenses of the Fund so that its total operating expenses (exclusive of portfolio transaction costs, interest and extraordinary expenses) are limited to 1.45% of average daily net assets.”

12b-1 Plan and Distribution Fees

The fund has adopted a 12b-1 plan, allowing it to pay distribution fees for the sale and distribution of its shares and for shareholder services. The prospectus notes that “A substantial portion of the 12b-1 fees is directed to third parties that provide shareholder servicing to existing shareholders.” While these fees are intended to support distribution and service, the prospectus again cautions that “over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.”

Third Party Arrangements and Revenue Sharing

The prospectus discloses that “The Adviser, the Distributor or their affiliates, may… make cash payments for shareholder services to some… brokers, dealers or financial intermediaries as an incentive to sell shares of the Fund and/or promote retention of their customers’ assets in the Fund.” This practice, known as “revenue sharing,” is common in the fund industry. These payments are made from the adviser’s or distributor’s own resources, potentially sourced from 12b-1 fees. The prospectus clarifies that “Revenue sharing payments… do not change the price paid by investors to purchase the Fund’s shares or the amount the Fund receives as proceeds from such sales.”

Revenue sharing arrangements can cover a range of services, including:

Shareholder servicing
Transaction processing
Sub-accounting
Marketing support
Access to sales meetings and representatives
Inclusion on sales lists (preferred or select lists)

The prospectus also mentions that the fund itself “may pay fees to financial intermediaries out of the Fund’s assets (in addition to 12b-1 fees), for servicing shareholder accounts,” particularly for intermediaries holding omnibus accounts.

By providing transparency into the management structure, key personnel, compensation arrangements, and potential conflicts of interest, the prospectus allows investors to make a more informed assessment of the management quality and oversight of the Baron Partners Fund.

How to Invest in Baron Partners Fund: Purchasing and Managing Shares

The prospectus details the practical aspects of investing in the Baron Partners Fund, covering share pricing, purchase methods, redemption procedures, and exchange options.

Share Pricing (Net Asset Value – NAV)

The purchase and sale price of fund shares is based on the fund’s Net Asset Value (NAV) per share. The NAV is calculated “as of the close of regular trading on the New York Stock Exchange (the ‘Exchange’) (usually 4:00 p.m. Eastern time) on each day the Exchange is open.”

Forward Pricing: Purchase and redemption orders are executed at the next NAV calculated after the order is received and accepted by the Transfer Agent. This “forward pricing” principle is standard for mutual funds, ensuring all transactions are based on the same day’s closing prices.
Financial Intermediary Orders: If orders are placed through financial intermediaries, the order is considered received when the intermediary accepts it, and pricing will be based on the NAV calculated after that acceptance.
Valuation Methods: The fund’s investments are generally valued at their last sale price. For securities where market quotations are not readily available or deemed unreliable, “securities will be valued by the Adviser using procedures established by the Board.” This fair valuation process is overseen by a committee and reported to the Board quarterly. Factors considered in fair valuation include price staleness, recent news, trading volume, and transaction frequency. For NASDAQ-traded securities, the fund uses the NASDAQ Official Closing Price.

How to Purchase Shares

Shares of the Baron Partners Fund can be purchased directly, without sales charges.

Account Application: To open a new account, investors must complete the “Regular Account Application” form, available at www.BaronFunds.com/applications. Special applications are available for IRAs and Coverdell accounts. Complete applications are essential for establishing an account.
Minimum Initial Investment: The minimum initial investment is $2,000, although this may be waived at the adviser’s discretion or for accounts opened through certain financial intermediaries. For the Baron Automatic Investment Plan (discussed later), the minimum initial investment can be lower. There is no minimum for subsequent purchases, except for online purchases through the website.
Rejection of Purchases: The fund “may reject any proposed purchase if the purchase would violate the Fund’s policies on short-term trading.” This refers to policies designed to discourage frequent trading and market timing, which can be detrimental to long-term shareholders.
Eligible Investors: “Any person or entity with a valid U.S. tax identification number may invest in the Fund.”

Anti-Money Laundering Regulations

The prospectus highlights the fund’s compliance with anti-money laundering regulations.

Identity Verification: The fund is legally required to verify the identity of shareholders, requesting information such as name, address, date of birth, and U.S. taxpayer identification number. Incomplete information can delay or prevent investment.
Information Sharing: The fund “will share the identity of its shareholders with federal authorities if required to do so by law and may report a failure to verify a shareholder’s identity with federal authorities.”

Methods of Investing

The prospectus outlines various ways to invest:

By Mail: Send a signed application form and a check payable to “BARON FUNDS®” to the specified P.O. Box or overnight mail address. Indicate the desired investment amount in Baron Partners Fund. Checks must be in U.S. dollars from a U.S. bank. Third-party checks, credit cards, money orders, cash, etc., are not accepted. For IRAs, specify the contribution year.
By Wire: Contact the Transfer Agent for an account number, complete and mail the application form, and instruct your bank to wire funds to the specified bank account, including fund name, account number, and your name in the wire instructions. The fund is not responsible for wire delays.
By Telephone: Once an account is open with banking instructions, additional investments or exchanges can be made by phone (representative or automated system “BaronTel”), unless telephone options were declined on the application. Telephone purchases authorize the fund to draw from your bank account. Exchanges require identically registered accounts.
By Internet: Open new accounts online at www.BaronFunds.com/openaccount or add to existing accounts at www.BaronFunds.com/myaccount. Online purchases require ACH/Banking instructions on the account.

Baron Automatic Investment Plan

This plan allows for systematic investing.

Lower Initial Minimum: For accounts starting with less than $2,000, the minimum initial investment is $500, with subsequent monthly investments as low as $50 automatically drawn from a checking account.
Enrollment: Complete an Enrollment Form (available by calling 1-800-99BARON), attach a voided check, and mail with your application. Signature guarantees may be required for adding banking instructions to existing accounts.

Purchases Through Brokers, Dealers, or Financial Intermediaries

Shares can also be purchased through brokers and other intermediaries, who may charge transaction fees. The fund also participates in programs with many intermediaries where no transaction fees are charged.

Policies Regarding Frequent Purchases and Redemptions

The fund discourages short-term trading.

Long-Term Investor Focus: The fund “discourages any person who is not a long-term investor from investing in the Fund.” Frequent trading can harm long-term shareholders by diluting share value, triggering taxable gains, increasing costs, and disrupting fund management.
Six-Month Trading Presumption: The fund’s policy presumes that trading in and out within six months or less is not long-term investing. The adviser may bar such investors from future investments or reject initial investments. Exceptions may be considered for extenuating circumstances.
Financial Intermediary Enforcement: The fund relies on financial intermediaries to enforce frequent trading policies for accounts held through them. The fund may prohibit intermediaries not enforcing these policies from investing in the fund.
Right to Reject Purchases/Exchanges: The fund reserves the right to reject any purchase or exchange request for any reason.

How to Redeem Shares

Shares can be redeemed through various methods.

By Mail: Send a signed letter with account details (registered owner name, fund name, shares/dollar amount to redeem, account number) to the Transfer Agent’s address. Signatures must match account registration exactly, including joint owners. Signature guarantees are required for redemptions over $50,000 per quarter. Proceeds are typically mailed within seven days of a proper redemption request.
By Telephone: Telephone redemption is automatically enabled unless declined on the application or by calling 1-800-442-3814. Telephone requests cannot be changed once made. Maximum telephone redemption is $50,000 per quarter. Proceeds can be mailed as a check, electronically transferred to a pre-designated bank account, or wired to a pre-authorized account (for a $10 fee).
By Broker, Dealer or Other Financial Intermediaries: Redemptions can be processed through intermediaries, who may charge fees. Special redemption procedures may apply.

Special Information About Redemptions

Signature Guarantees: Required for redemptions over $50,000 per quarter and for any redemption if the address has changed within 30 days. Joint tenant accounts require all signatures guaranteed. Signature guarantees protect against fraud and can be obtained from most securities firms or banks (not notaries public).
Documentation for Entities: Corporations, trustees, executors, etc., may need to provide additional documentation.
Redemption in Securities: For redemptions over $250,000 or 1% of fund assets within 90 days, the fund reserves the right to pay redemption proceeds in portfolio securities instead of cash.
Account Minimums: If redemptions reduce an account balance below $2,000, the fund may request an increase. If the balance remains below $2,000 after 60 days, the fund may close the account and send proceeds.
Suspension of Redemptions: The fund may suspend redemptions during Exchange trading suspensions, emergencies preventing NAV valuation, or if permitted by the SEC.

How to Exchange Shares

Shares can be exchanged between Baron Funds.

Exchange Methods: Exchanges can be made by mail, telephone (representative or BaronTel), or through the Baron Funds website (if telephone option is enabled).
Exchange Terms: New accounts established through exchanges will have the same registration and privileges as the original account and are subject to the same minimum investment requirements. There is currently no exchange fee. Exchanges are based on relative NAVs.
Taxable Event: Exchanges are considered taxable sales, potentially resulting in capital gains or losses.
Excessive Exchange Policy: The fund reserves the right to cancel exchange privileges for excessive use, in line with frequent trading policies.
Suspension of Exchange Privilege: The fund may change or temporarily suspend exchange privileges during unusual market conditions.

Other Fees

Historical Information Fee: A $5 per year fee (maximum $20) may be charged for providing historical account information.

Special Information about the Baron Funds® Website

The website www.BaronFunds.com offers online account access and transactions.

Online Transactions: The website allows checking balances, historical transactions, and making purchases or exchanges (into other Baron Funds). Online transactions require telephone transaction privileges and bank instructions on the account.
Payment Method: Online purchases are paid via debit from a U.S. bank account (Federal Reserve System member).
Transaction Limits: Online initial or subsequent purchase transactions are limited to $25,000 each. Minimum initial investment online is $2,000 (or $500 for the Baron Automatic Investment Plan). Minimum subsequent online purchase is $10.
No Online Redemptions: Redemptions cannot be processed online, but are available by telephone or mail.
Internet Security and Risks: The prospectus cautions about internet security risks, system instability, and potential website unavailability. The fund, distributor, transfer agent, and adviser are not liable for delays, malfunctions, unauthorized access, or losses from following internet instructions, including fraudulent ones.

By providing comprehensive details on share purchases, redemptions, exchanges, and online access, the prospectus equips investors with the practical information needed to manage their investment in the Baron Partners Fund effectively.

Disclosure of Portfolio Holdings: Transparency and Access to Information

The prospectus outlines the fund’s policies regarding the disclosure of its portfolio holdings, ensuring a degree of transparency for investors while also balancing competitive considerations.

Quarterly Portfolio Disclosure

The fund provides quarterly updates on its portfolio holdings through the Baron Funds website, www.BaronFunds.com.

Top Ten Holdings: Typically posted on the fifth business day after quarter-end, this disclosure reveals the fund’s top ten largest long positions, expressed as a percentage of net assets (or percentage of total long positions if leveraged).
Full Portfolio Holdings: Usually posted on the tenth business day after quarter-end, this more comprehensive disclosure lists all long security positions, as a percentage of net assets, and the fund’s cash position at quarter-end.
Website Availability: Both the top ten and full holdings information remain on the website until the next quarter-end’s data is posted, providing ongoing access for investors.

Monthly Top Ten Holdings Disclosure

In addition to quarterly disclosures, the fund also provides monthly updates on its top holdings.

Monthly Top Ten: Posted around the tenth business day after month-end, this disclosure highlights the ten largest long positions, again as a percentage of net assets (or percentage of total long positions if leveraged).
Website Availability: Monthly top ten holdings remain on the website until the next month-end’s information is posted.

Additional Website Information

The prospectus notes that “Other information that may be of interest to investors, such as industry breakdowns and a historical analysis of security impact, may be available on the Baron Funds® website.” This suggests the website may offer further insights beyond just portfolio holdings, enhancing investor understanding of the fund’s composition and performance drivers.

Earlier Portfolio Disclosure Under Specific Conditions

While the standard disclosure schedule is quarterly and monthly, the fund may release portfolio information earlier under limited circumstances.

Best Interest of Shareholders: Early release is only permitted if senior management determines it is in the best interest of shareholders.
Legitimate Business Purpose: There must be a valid business reason for early disclosure.
Confidentiality Agreement: The recipient must agree in writing to maintain confidentiality and not trade on the information. The SAI provides more details on these arrangements.

Inadvertent Early Disclosure

If portfolio information is unintentionally released early without a confidentiality agreement, “the Fund will promptly post the information to the website.” This ensures transparency and equal access to information in case of accidental disclosure.

Immaterial Information Disclosure

The fund may release what the adviser deems “immaterial information as the Adviser deems appropriate” without strict adherence to the disclosure schedule. This provides flexibility for sharing less sensitive portfolio details more readily.

Prohibition of Compensation for Portfolio Disclosure

The prospectus explicitly states that “No employee of the Fund or the Adviser is allowed to accept compensation or consideration in any form with respect to the release of the Fund’s portfolio holdings.” This includes any agreements to maintain assets in the fund or other adviser-managed entities. This policy aims to prevent conflicts of interest and ensure portfolio disclosure decisions are made solely in the best interests of fund shareholders. Any exceptions to the disclosure policies are reported to the Board of Trustees.

By outlining these disclosure policies, the prospectus demonstrates the Baron Partners Fund’s commitment to providing investors with regular information about its portfolio holdings, while also incorporating safeguards to protect against misuse of sensitive information and maintain a level playing field for all investors.

Dividends and Distributions: How Investors Receive Fund Earnings

The prospectus explains how the Baron Partners Fund distributes its earnings to shareholders through dividends and capital gains distributions.

Distribution Policy

“The Fund pays its shareholders dividends from its net investment income and distributes any net realized capital gains at least once each year.” This is a standard practice for mutual funds aiming to qualify as regulated investment companies and pass through their earnings to shareholders, minimizing fund-level taxation.

Reinvestment Option

Shareholders have the choice to reinvest their distributions back into the fund. “Your distributions will be reinvested in the Fund unless you instruct the Fund otherwise.” Reinvestments are typically seamless and automatic for shareholders who elect this option.

No Charges on Reinvestments

“There are no charges on reinvestments.” This makes reinvesting a cost-effective way to compound returns over time.

NAV Reduction After Distribution

“After every distribution, the value of a share is automatically reduced by the amount of the distribution.” This is a natural consequence of distributing fund assets to shareholders; the fund’s net asset value decreases by the amount distributed per share.

Uncashed Distribution Checks

If a shareholder elects not to reinvest and distribution checks are undeliverable, “your distribution will be reinvested in additional shares at the next NAV calculated after the check is returned to the Fund.” This prevents funds from remaining undistributed indefinitely and ensures shareholders ultimately receive the value of their distributions, even if initial delivery fails. “No interest will accrue on amounts represented by uncashed distribution or redemption checks.”

Tax Implications of Distributions

The prospectus directs potential investors to the “U.S. Federal Income Taxation” section for details on the tax treatment of distributions. “Potential investors should read the ‘U.S. Federal Income Taxation’ section… for information on the tax treatment of distributions from the Fund and for a discussion of the tax consequences of an investment in the Fund.” Understanding the tax implications of fund distributions is crucial for investors to effectively manage their overall tax liabilities.

By clearly outlining its dividend and distribution policies, the prospectus informs investors about how they will receive earnings from the Baron Partners Fund and the options available for managing these distributions.

U.S. Federal Income Taxation: Key Tax Considerations for Investors

The prospectus includes a dedicated section summarizing key U.S. federal income tax considerations relevant to investing in the Baron Partners Fund. This section is a high-level overview, and investors are always advised to consult their own tax advisors for personalized guidance.

Tax Status of the Fund: Regulated Investment Company (RIC)

“The Fund intends to qualify every year as a ‘regulated investment company’ under the Code.” This is a crucial tax designation for mutual funds. Qualifying as a RIC allows the fund to avoid corporate-level federal income tax by distributing its income to shareholders. To maintain RIC status, the fund must meet specific requirements related to income sources, asset diversification, and annual distributions. A key requirement is distributing at least 90% of its net taxable income annually.

Taxability of Dividends and Distributions

Distributions from the fund are generally taxable to shareholders, but the tax character depends on the source of the distribution.

Ordinary Income: Distributions of net investment income (excluding “qualified dividend income”) and net short-term capital gains are taxed as ordinary income at the shareholder’s individual income tax rates.
Long-Term Capital Gains: Distributions of net capital gains (designated as capital gain dividends) are taxed as long-term capital gains, regardless of how long the shareholder has held fund shares. Long-term capital gains rates are typically lower than ordinary income tax rates for many investors.
Return of Capital: Distributions exceeding the fund’s current and accumulated earnings and profits are treated as a tax-free return of capital, reducing the shareholder’s cost basis in their shares, up to the amount of their basis. Amounts exceeding basis are taxed as capital gains.
Qualified Dividend Income: Provided certain holding period requirements are met, distributions of “qualified dividend income” (from qualifying dividends received by the fund) may be taxed at the lower long-term capital gains rates for individual investors.
Reinvested Distributions: Electing to reinvest distributions does not avoid current taxation. Reinvested distributions are still considered taxable income, just as if they were received in cash and then used to purchase new shares.
Distribution Timing: Distributions declared in October, November, or December to shareholders of record in those months and paid by January 31 of the next year are treated as taxable in the year declared, not the year received.

Backup Withholding

“By law, the Fund must withhold 28% of your dividends and redemption proceeds if you have not provided a taxpayer identification number or social security number or if the number you have provided is incorrect.” This backup withholding is a measure to ensure tax compliance. Shareholders can avoid backup withholding by providing correct taxpayer information to the fund. Backup withholding is not an additional tax but can be credited against a shareholder’s federal income tax liability.

Taxability of Sale or Redemption of Shares

Selling or redeeming fund shares triggers a taxable event.

Capital Gain or Loss: Any gain or loss realized upon sale or redemption is generally treated as capital gain or loss. The amount is calculated as the difference between the sale proceeds and the shareholder’s adjusted tax basis in the shares.
Holding Period: The holding period determines whether capital gains or losses are short-term (held one year or less) or long-term (held more than one year). Long-term capital gains generally receive more favorable tax treatment for individual investors.
Wash Sale Rule: Losses on sales or redemptions may be disallowed if substantially identical shares are repurchased within 30 days before or after the sale, known as the “wash sale rule.”
Short-Term Holding Period Loss Limitation: Losses on shares held for six months or less may be treated as long-term capital losses to the extent of any capital gain dividends received on those shares.

State, Local, and Foreign Taxes

“In addition to federal income taxes, shareholders of the Fund may be subject to state, local or foreign taxes on distributions from the Fund and on repurchases or redemptions of shares.” The prospectus reminds investors to consult their tax advisors regarding these other potential tax liabilities.

Important Disclaimer

“The foregoing is a summary of some of the important U.S. federal income tax considerations… It is not a complete analysis of all relevant tax considerations, nor is it a complete listing of all potential tax risks… You should consult your own tax adviser regarding specific questions of federal, state, local or foreign tax law.” This emphasizes that the prospectus’s tax discussion is for general information only and not a substitute for professional tax advice.

By including this “U.S. Federal Income Taxation” section, the prospectus alerts investors to the key tax implications of investing in the Baron Partners Fund, encouraging them to seek personalized tax guidance based on their own circumstances.

General Information: Custodian, Shareholder Services, and Privacy

The final sections of the prospectus provide essential general information about the fund’s service providers, shareholder support, and privacy policies.

Custodian, Administrator, Transfer Agent, and Dividend Agent

The prospectus identifies the key service providers who support the fund’s operations:

Custodian: State Street Bank and Trust Company (SSBT) serves as custodian, holding the fund’s cash and securities.
Administrator: SSBT also acts as administrator, providing accounting, bookkeeping, NAV calculation, and tax reporting assistance.
Transfer Agent and Dividend Agent: DST Systems, Inc. handles transfer agent functions (shareholder recordkeeping, transactions) and dividend disbursing.

The prospectus explicitly states that “These institutions are not responsible for investment decisions for the Fund,” clarifying their roles as operational service providers, not investment managers.

Shareholder Information and Support

For shareholder inquiries, the prospectus provides contact information:

Account and Transaction Questions: Contact the Transfer Agent at P.O. Box 219946, Kansas City, MO 64121-9946, or by telephone at 1-800-442-3814.
General Fund Information: Call 1-800-99BARON or 212-583-2100.

The prospectus also notes that “As a Delaware statutory trust, annual shareholder meetings are not required.” Shareholder communication primarily occurs through semiannual financial reports. Information on pending legal proceedings, if any, is disclosed in the SAI.

Privacy Notice

The prospectus includes a privacy notice outlining how the fund collects, uses, and protects nonpublic personal information about shareholders.

Information Sources: The fund collects nonpublic personal information from applications, transaction history, and potentially third-party sources like credit reporting agencies.
Limited Information Sharing: The fund may share name and address information within the Baron Funds family (other funds, adviser, affiliates) for marketing purposes (information about other products, investor conferences) and for sending required shareholder communications.
Restricted Disclosure: “We do not disclose any nonpublic personal information about our customers to anyone, except as permitted or required by law.” Permitted disclosures include sharing information with service providers (transfer agent, mailing houses) who are contractually obligated to maintain confidentiality and use the information solely for providing services to the fund.
Data Security: The fund restricts access to nonpublic personal information to employees with a need to know and maintains physical, electronic, and procedural safeguards to protect this information.
Website Pledge: The privacy pledge is also available on the Baron Funds website, www.BaronFunds.com, or by calling 1-800-99BARON.

For More Information

The prospectus directs investors seeking further details to additional resources:

Shareholder Reports: Semiannual and annual reports provide more in-depth information about fund investments and market conditions.
Statement of Additional Information (SAI): The SAI, dated April 22, 2008 (same date as the prospectus), contains more detailed information and is incorporated by reference into the prospectus. Both the SAI and shareholder reports can be obtained free of charge by writing or calling the fund.
Obtaining Documents: Information can be obtained by phone (1-800-99BARON), mail (Baron Funds®, 767 Fifth Avenue, New York, NY 10153), email ([email protected]), or online (www.BaronFunds.com or SEC’s EDGAR database at www.sec.gov). Copies may also be obtained from the SEC’s Public Reference Room in Washington, D.C.
SEC File Number and Ticker Symbol: The SEC file number (811-21296) and ticker symbol (BPTRX) are provided for reference.

Important Disclaimer

The prospectus concludes with a standard disclaimer: “No person has been authorized to give any information or to make any representations other than those contained in this prospectus or in the related SAI.” This reinforces that the prospectus and SAI are the official and authorized sources of information about the Baron Partners Fund.

By providing this “General Information” section, the prospectus ensures that investors have access to key operational details, shareholder support resources, and important legal and privacy disclosures.

In conclusion, this in-depth analysis of the Baron Partners Fund prospectus provides a comprehensive overview for potential investors. The fund presents a focused investment approach on growth companies, managed by an experienced team, but it also entails specific risks related to concentration, leverage, short selling, and focus on smaller growth-oriented businesses. Understanding these factors, along with the fund’s historical performance, expenses, and operational details, is crucial for making an informed investment decision. Prospective investors are encouraged to review the full prospectus and consult with a financial advisor to determine if the Baron Partners Fund is suitable for their individual financial goals and risk tolerance.