Permabull and billionaire money manager Ron Baron had a great 2024. From an investment standpoint the 81-year-old investment manager has long been known as Elon Musk’s oldest fanboy, thanks to his fund’s ginormous bets on Tesla and SpaceX, which have surged since early November.
The firm’s top fund, the $7.3 billion (assets) Baron Partners Fund, which has 40% of its assets invested in Tesla, is up 37% year to date thanks largely to Tesla’s more than 75% share price gain so far this year. Another 17% of the portfolio is invested in SpaceX.
Baron’s clients, many of whom are retirees with an appetite for concentration risk, are accustomed to Baron’s big bets bearing fruit: Since its inception in 1992, the fund has delivered an annualized average return of nearly 15%. According to Morningstar data, the Partners Fund has consistently ranked among the top mutual funds in the country thanks to an average annual return of 31%, 22% and 21% over the last five, ten and fifteen years, respectively.
Baron’s other big mutual fund is the $7.7 billion (assets) Baron Growth Fund, which focuses on small-sized U.S. companies that have significant growth potential. The fund has lagged this year—only up 3%, in large part because it doesn’t have any exposure to Tesla or SpaceX. Since its inception in 1994, however, the fund has posted an average annualized return of more than 12%.
In recent years, no investment has reaped bigger profits than Baron’s longtime bet on Tesla. He first invested roughly $400 million in the company between 2014 and 2016 acquired at average prices of between $10 and $12 per share.
“Elon will be the first to be a trillionaire and multi-trillionaire,” predicts Baron. Musk recently became the first person to ever surpass a net worth of more than $400 billion, by Forbes reckoning.
Following Trump’s election win, on November 8, Tesla surpassed a market capitalization of $1 trillion, joining the ranks of megacap giants like Apple and Microsoft. Baron predicts the electric car company will be worth up to $5 trillion in the next ten years. “If Musk is successful with robots or autonomous driving, it could be even more than that,” he adds.
While Baron admits there were a few fund outflows given Tesla stock’s mediocre performance in the last two to three years, he sees only upside from here. He did pare back the position in 2021—from 45% allocation in the Baron Partners Fund, but mainly to rebalance the portfolio. Baron says he has no plans to pare back his current position any further.
The billionaire investor’s fortune has surged alongside his successful bet on Tesla. Baron’s net worth has grown to $6.5 billion, Forbes estimates, up from $5.1 billion earlier this year. He first founded his firm, Baron Capital, in 1982 with just $10 million under management and quickly grew a reputation as a respected buy-and-hold investor. He now oversees $48 billion across 19 funds.
Despite his age, Baron insists he still feels as spritely as a teenager and has no intention of retiring: “I want to do $200 billion in ten years, not $50 billion,” says Baron referring to his assets under management. “Then after that, in the next ten years, I want my sons and executives to double it again.”
Despite his glowing praise for Tesla, what Baron is—and has been, for years—most excited about is Musk’s privately-owned rocket company, SpaceX. Earlier in December, the company’s valuation rose to $350 billion as the company bought back stock in a secondary share sale—a 67% surge from its previous valuation of $210 billion in June. Before the latest funding round, Baron’s stake had been worth roughly $2.6 billion.
Baron sees a huge return on his investment, predicting the company will hit a $400 billion valuation by 2027 and a $600 billion valuation by 2030. “SpaceX is building the railroad to space and the reusability of its rockets is a big competitive advantage,” says Baron. He is also particularly bullish about the company’s Starlink internet broadband service, which is now getting adopted by several major U.S. and international airlines: “Everyone will want it.”
When it comes to Musk’s new role in government—specifically being tapped by Trump to help lead the newly created Department of Government Efficiency (DOGE), Baron remains optimistic that the Tesla and SpaceX CEO can get some good work done. Musk’s help in “axing burdensome regulations” will be good for markets, he says, not to mention it could help address the growing U.S. deficit issue.
Baron furthermore points to SpaceX’s model versus its competitors—such as its lower costs and quicker timing, arguing that Musk can bring some of that same efficiency to the government. “Trump has one of the brightest men on the planet by his side and he’s listening to him,” says Baron.
After Tesla and SpaceX, Baron’s largest holdings are $14 billion (revs) insurance company Arch Capital Group, technology consulting firm Gartner and commercial real estate data provider CoStar Group. His stakes in those companies were worth $2.3 billion, $2 billion and $1.4 billion at the end of the third quarter, respectively.
Other longtime favorite stock picks of Baron’s include the likes of New York-based market exchange MSCI and Colorado-based ski mountain operator Vail Resorts. While shares have underperformed the S&P 500 this year, Baron argues these companies are still great examples of long-term durable businesses with unique competitive advantages or growth prospects. He likes that Vail has seen rising demand, not to mention it locks in a big chunk of its revenue before the ski season even begins by selling most of its passes ahead of time. According to filings, some 2.3 million guests have already purchased resort passes in advance of the 2025 season, accounting for roughly 75% of all skier visits. Emerging market exchange MSCI, meanwhile, has global exposure and has benefited from the shift to passive investments, Baron points out.
His funds typically have very low turnover, looking to double their return on an investment roughly every five years. He only sells shares of a company if its growth slows or its business fundamentals change—and when that happens, he exits as quickly as he can and moves on to the next big idea, he says. In the past year, he has sold shares of companies like Chinese internet search engine Baidu and casino company PENN Entertainment (formerly Penn National Gaming).
Going forward, Baron’s firm has also started considering active ETFs, despite being one of the last mutual fund holdouts in the trend of passive investing. Baron’s two sons, Michael and David, are both involved in helping run the business and have been urging him to consider growing the firm in this way. “I’ve been negative on ETFs for a long time but there are good tax benefits,” he admits.
“I’ve got to be much bigger,” says Baron, no doubt inspired by his pal Musk’s success. “I want to be a trillion-dollar firm.”