Ron Baron, the billionaire money manager and self-proclaimed Elon Musk fanboy, had a great year in 2024 thanks to his big bets on Tesla and SpaceX. His top fund, the Baron Partners Fund, which has a significant portion of its assets invested in Tesla and SpaceX, saw a 37% increase in value this year, largely due to Tesla’s soaring share price. Baron’s clients, many of whom are retirees, are accustomed to his concentrated investment strategy, which has delivered an average annual return of nearly 15% since the fund’s inception in 1992.
Baron’s other big mutual fund, the Baron Growth Fund, focuses on small-sized U.S. companies with growth potential but has lagged this year as it does not have exposure to Tesla or SpaceX. Despite this, the fund has posted an average annualized return of more than 12% since its inception in 1994. Baron’s long-term bet on Tesla, which he first invested in between 2014 and 2016, has reaped significant profits for his firm. He predicts that Elon Musk will become the first trillionaire, with Tesla potentially worth up to $5 trillion in the next ten years.
Baron’s firm, Baron Capital, founded in 1982 with just $10 million under management, has now grown to oversee $48 billion across 19 funds. His net worth has also surged alongside his successful bet on Tesla, with Forbes estimating it at $6.5 billion. Despite his age, Baron has no plans to retire and aims to grow his assets under management to $200 billion in the next ten years. He remains optimistic about the future of his investments and sees only upside potential from here.
While Baron is known for his enthusiasm about Tesla, he is most excited about Musk’s privately-owned rocket company, SpaceX. Baron predicts that SpaceX’s valuation will reach $600 billion by 2030, citing the company’s innovative technology and competitive advantages. He is particularly bullish on SpaceX’s Starlink internet broadband service, which he believes will see widespread adoption in the future.
Baron is also optimistic about Musk’s new role in government, heading the Department of Government Efficiency (DOGE). He believes that Musk’s expertise can help streamline government operations and address the growing U.S. deficit issue. Baron points to SpaceX’s efficient business model and lower costs as examples of how Musk can bring positive change to the government.
Looking ahead, Baron’s firm is considering active ETFs to grow its business, despite being one of the last mutual fund holdouts in the trend of passive investing. Baron’s sons, Michael and David, are involved in the firm and are urging him to consider this opportunity for growth. Inspired by Musk’s success, Baron aims to grow his firm to be a trillion-dollar firm in the future.
