Ron Baron is counting on Elon Musk to reverse a difficult stretch for his investment firms. The 83-year-old founder of Baron Capital has seen his largest fund decline in 2026, and other funds are lagging as clients have pulled money from his actively managed mutual funds and ETFs. Total assets under management have fallen to $43.9 billion from a peak of $52 billion in October 2021.
The firm’s outlook hinges on an expected SpaceX IPO next month that could be the largest public stock launch in history. SpaceX accounts for almost 30% of Baron’s largest fund, the Baron Partners Fund, while Tesla represents nearly 19%. The unusually heavy concentration reflects a yearslong bet that has grown increasingly valuable as the rocket-and-satellite company reached a $1.25 trillion valuation.
Baron and Musk forged a close bond in 2022 as Musk struggled to raise cash to buy X, then known as Twitter. Baron called to offer him $100 million, splitting the contribution between his mutual funds and his personal cash. Right away, Baron Capital had to reduce the value of its X investment, but the firm’s investment has since more than doubled in value to over $700 million.
“I do regard you as a true and trusted friend,” Musk said during a video interview at Baron’s annual investor conference last year, which was held at New York’s Lincoln Center and featured performances by Pink and Shania Twain.
Baron’s enthusiasm for Musk marks a departure from his long-standing reputation for skepticism toward technology stocks, a stance that helped him avoid losses during the 2000 dot-com meltdown. In 2010, Baron initially turned down an opportunity to invest in Tesla’s IPO. He changed his mind in 2014, purchasing $400 million in shares over the next two years. Baron Capital has told investors its funds have made more than $6 billion on the Tesla investment.
The Baron Partners Fund has fallen about 1.6% so far this year through May 22, compared with a gain of 5.6% for the Russell 1000 Growth index, according to Morningstar. It has underperformed the index over the past five years, though it outperformed over a 10-year span. Morningstar associate director Adam Sabban noted that the fund’s decline this year is partly due to drops in Tesla and other stocks.
“A successful SpaceX IPO and subsequent performance could change things quickly [for the fund] given the large weighting,” Sabban said. “Most managers would have trimmed their position, but he’s gone for it.”
Baron is not the only major investor heavily concentrated in SpaceX ahead of the planned market debut. Cathie Wood’s ARK Venture Fund holds 17% of its net assets in SpaceX as of March 31. The fund is up nearly 8% so far this year through May 22.
At last year’s investor conference, Baron expressed excitement over Musk’s broader ambitions, including Tesla’s plans for humanoid robots. “There’s no one who has changed our lives more than Elon,” Baron said.