Baron Opportunity Fund on Welltower Inc.
Thesis
Welltower combines senior-housing real estate with a proprietary operating and data-analytics platform that the manager believes can structurally improve both margins and occupancy. New software-driven initiatives such as enhanced asset management, analytics and amenity-based pricing create opportunities to extract more value from the existing portfolio. Demographics are highly favorable, with the population over age 80 expected to grow at a 4% to 5% compound annual rate over the next five years. At the same time, constrained construction and financing limit new supply and create attractive acquisition opportunities. The fund sees a path for earnings to more than double over five years.
“We see a path for earnings to more than double over the next five years.”