Baron Large Cap Growth Strategy March 31, 2019 DEAR INVESTOR: After steep losses to end last year, global equity markets rallied sharply, and U.S. large-cap equities participated fully, registering the best start to the PERFORMANCE year since 1998. Investors appear to have shrugged off concerns over declining earnings growth, weakening economic data, and the continued 2019 is off to a good start, and we were able to reverse most of last lack of a resolution in U.S.-China trade negotiations, choosing instead to quarter’s losses. Baron Large Cap Growth Strategy gained 18.70% (net of focus on more attractive valuations. Federal Reserve Chairman Powell fees) in the March quarter, outperforming the Russell 1000 Growth Index, abruptly reversed course, returning U.S. monetary policy back to its “data which returned 16.1%, and the S&P 500 Index, which rose 13.7%. dependent” path and, in the process, signaling more accommodative interest rates for the near future. We would argue that it was that change, Table I. more than anything else, that caused the first quarter rally. Performance Annualized for periods ended March 31, 2019 The Strategy’s strong performance was largely attributable to stock Baron Large Baron Large Russell selection, which contributed over 400 basis points to outperformance Cap Growth Cap Growth 1000 relative to the Russell 1000 Growth Index, while allocation effect Strategy Strategy Growth S&P 500 (net)1 (gross)1 Index1 Index1 detracted approximately 140 basis points, mostly due to cash, which diluted returns in a rising market. We saw broad-based strength across the 2 Three Months 18.70% 18.89% 16.10% 13.65% portfolio, with Amazon.com, Alibaba, Veeva Systems, Worldpay, One Year 12.09% 12.81% 12.75% 9.50% Mastercard, Sage Therapeutics, and EPAM Systems contributing over Three Years 20.62% 21.40% 16.53% 13.51% 100 basis points each to absolute returns. Another 10 investments Five Years 14.10% 14.91% 13.50% 10.91% contributed over 50 basis points each, and 23 of our holdings posted Ten Years 17.89% 18.66% 17.52% 15.92% double-digit percentage gains during the quarter. We had seven decliners Since Inception with CME Group, Tesla, and Biogen, the bottom three, costing us (September 30, approximately 90 basis points combined. 2004)3 10.15% 11.05% 10.32% 8.89% For Strategy reporting purposes, the Firm is defined as all accounts managed by Baron Capital Management, Inc. (“BCM”) and BAMCO, Inc. (“BAMCO”), registered investment advisers wholly owned by Baron Capital Group, Inc. As of March 31, 2019, total Firm assets under management are approximately $28.8 billion. The Strategy is a time-weighted, total return composite of all large-cap accounts greater than $1 million using our standard investment process. Since 2010, accounts in the Strategy are market-value weighted and are included on the first day of the month following one full month under management. Prior to 2010, accounts were included on the first day of the quarter after one full quarter. Gross performance figures do not reflect the deduction of investment advisory fees. Actual client returns will be reduced by the advisory fees and any other expenses incurred in the management of the investment advisory account. A full description of investment advisory fees is supplied in our Form ADV Part 2A. Valuations and returns are computed and stated in U.S. dollars. Performance figures reflect the reinvestment of dividends and other earnings. The Strategy is currently composed of one mutual fund managed by BAMCO and separately managed accounts managed by BCM. BAMCO and BCM claim compliance with the Global Investment Performance Standards (GIPS®). To receive a complete list and description of the Firm’s strategies or a GIPS compliant presentation please contact us at 1-800-99BARON. Performance data quoted represents past performance. Current performance may be lower or higher than the performance data quoted. Past performance is no guarantee of future results. 1 The indexes are unmanaged. The S&P 500 Index measures the performance of 500 widely held large cap U.S. companies and the Russell 1000® Growth Index of large-sized U.S. companies that are classified as growth. The indexes and the Strategy are with dividends, which positively impact the performance results. Russell Investment Group is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell is a trademark of Russell Investment Group. 2 Not annualized. 3 The Strategy has a different inception date than its underlying portfolio, which is April 30, 2004. * Mr. Umansky became the portfolio manager of the strategy on November 1, 2011. Since that date, the Strategy has returned % cumulatively, which compares to % for the Russell 1000 Growth Index and 169.1% for the S&P 500 Index. For Institutional Use Only 1 Baron Large Cap Growth Strategy Here is a more detailed look at some of our best and worst investment decisions and outcomes over the last three months, as well as over the last three years: Table II. Best and worst investment decisions and outcomes - quarter ended March 31, 20191 Top Contributors Bottom Contributors Total Return* Alpha Added Total Return* Alpha Added Company Name (%) (bps)† Company Name (%) (bps)† Veeva Systems Inc. 42.03 86.40 CME Group, Inc. –12.14 –107.04 Alibaba Group Holding Limited 33.11 84.80 Illumina, Inc. 3.59 –47.77 Worldpay, Inc. 48.50 83.97 Apple, Inc. –1.11 –36.49 Sage Therapeutics, Inc. 66.24 78.04 Red Hat, Inc. 4.02 –28.43 EPAM Systems, Inc. 45.79 62.45 Tesla, Inc. –15.91 –26.78 PagSeguro Digital Ltd. 61.88 58.74 Booking Holdings, Inc. 1.46 –24.54 Ctrip.com International, Ltd. 61.46 54.42 The Charles Schwab Corp. 3.31 –23.88 Equinix, Inc. 29.28 29.73 Biogen, Inc. –24.24 –21.61 Mastercard Incorporated 25.02 28.86 Domino’s Pizza, Inc. 1.66 –17.04 Wix.com Ltd. 33.75 26.62 Activision Blizzard, Inc. 0.75 –13.88 Amazon.com, Inc. 18.65 23.31 Vertex Pharmaceuticals Incorporated 11.01 –8.38 RingCentral, Inc. 30.76 13.65 IAC/InterActiveCorp 8.06 –4.23 S&P Global Inc. 24.25 11.34 Alphabet Inc. 13.30 –3.47 ASML Holding N.V. 20.84 10.72 Kotak Mahindra Bank Ltd. –1.82 –2.70 Intuitive Surgical, Inc. 19.23 10.40 Naspers Limited 19.33 7.15 Alphabet Inc. 12.63 5.89 Facebook, Inc. 27.20 5.05 Visa, Inc. 18.58 4.93 Splunk, Inc. 18.76 4.38 Top Contributors Alpha (bps) 690.85 Bottom Contributors Alpha (bps) –366.24 Total Alpha Added (bps) 259.43 Total Alpha Added (bps) 259.43 Top 10 Contributors as a % of Alpha 229% Bottom 10 Contributors as a % of Alpha –134% Top 20 Contributors as a % of Alpha 266% Bottom 20 Contributors as a % of Alpha –141% 1 Top contributors, top detractors, and top 10 holdings are based on a representative account. Such data may vary for each client in the Strategy due to asset size, market conditions, client guidelines, and diversity of portfolio holdings. The representative account is the account in the Strategy that we believe most closely reflects the current portfolio management style for the Strategy. Representative account data is supplemental information. † Measure of relative performance (positive and negative alpha contribution) versus Russell 1000 Growth Index benchmark from 12/31/2018 to 3/31/2019. * Not annualized. 2 For Institutional Use Only Baron Large Cap Growth Strategy Table III. Best and worst investment decisions and outcomes - trailing 3-years ended March 31, 20191 Top Contributors Bottom Contributors Annualized Annualized Total Return Alpha Added Total Return Alpha Added Company Name (%) (bps)† Company Name (%) (bps)† Amazon.com, Inc. 44.25 999.52 FireEye, Inc. –35.83 –153.00 Alibaba Group Holding Limited 32.15 421.13 Under Armour, Inc. –53.98 –137.64 Mastercard Incorporated 36.52 207.33 Activision Blizzard, Inc. –24.83 –123.30 Intuitive Surgical, Inc. 52.40 171.25 Ctrip.com International, Ltd. –0.47 –113.73 Mobileye N.V. 48.14 166.62 Allergan PLC –18.79 –82.58 Veeva Systems Inc. 46.11 154.13 Apple, Inc. 15.61 –70.82 Red Hat, Inc. 34.86 112.99 athenahealth, Inc. –28.28 –68.70 EPAM Systems, Inc. 36.03 111.42 Starbucks Corporation 0.75 –67.13 Worldpay, Inc. 40.66 88.52 Expedia Group, Inc. –1.17 –66.93 Visa, Inc. 27.76 88.17 Synchrony Financial 6.32 –59.39 ASML Holding N.V. 24.48 79.43 Brookfield Asset Management, Inc. 10.02 –56.37 CME Group, Inc. 24.50 64.07 Regeneron Pharmaceuticals, Inc. –5.93 –48.38 Naspers Limited 19.61 63.10 The Stars Group Inc. –38.12 –48.02 Illumina, Inc. 24.17 52.14 Verisk Analytics, Inc. 2.07 –43.74 PagSeguro Digital Ltd. 21.44 31.46 Alexion Pharmaceuticals, Inc. –10.43 –42.33 RingCentral, Inc. 32.24 24.98 Snap, Inc. –29.77 –24.02 TerraForm Global, Inc. 64.37 19.19 Concho Resources, Inc. 6.70 –23.25 Wix.com Ltd. 33.38 18.76 Equinix, Inc. 13.41 –22.92 The Charles Schwab Corp. 16.28 15.50 Biogen, Inc. –1.78 –21.72 Facebook, Inc. 13.15 14.34 Twitter, Inc. –13.05 –20.49 Top Contributors Alpha (bps) 2,904.07 Bottom Contributors Alpha (bps) –1,294.46 Total Alpha Added (bps) 1,636.04 Total Alpha Added (bps) 1,636.04 Top 10 Contributors as a % Alpha 154% Bottom 10 Contributors as a % Alpha –58% Top 20 Contributors as a % Alpha 178% Bottom 20 Contributors as a % Alpha –79% † Measure of relative performance (positive and negative alpha contribution) versus Russell 1000 Growth Index benchmark from 3/31/2016 to 3/31/2019.