Baron Partners Fund on FactSet Research Systems Inc.
Thesis
The market has discounted FactSet because of perceived AI disruption, but Baron believes the company is becoming critical infrastructure for AI-enabled financial workflows. Organic annual subscription value grew 7%, and AI initiatives have already generated meaningful client expansions, including a large bank doubling its data subscriptions. FactSet's Google Cloud partnership embeds Gemini models directly into its workstation and provides another path to deepen product relevance. The stock trades at steep discounts to its historical valuation ranges while management continues repurchasing shares. Baron therefore sees both fundamental growth and valuation normalization as potential sources of return.
“FactSet is becoming critical AI infrastructure for the industry.”
Key risks
- AI competitors could reduce FactSet's differentiation
- Subscription growth could slow
- Historical valuation multiples may not return