Aristotle Growth Equity Fund Sold Alexandria Real Estate Equities (ARE) Due to Weak Market Expectation

Aristotle Funds, an investment advisor, released its “Growth Equity Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. U.S. equity markets reached new all-time highs in Q4 2025, with the S&P 500 Index rising 2.66% and the Bloomberg U.S. Aggregate Bond Index increasing by 1.10%. Within the Russell 1000 Growth Index, healthcare, communication services, and financials were the top-performing sectors, while utilities, real estate, and materials lagged. The U.S. economy showed resilience. However, consumer confidence deteriorated toward year-end, raising concerns about future spending and the labor market. Against this backdrop, the Aristotle Growth Equity Fund (Class I-2) returned 0.95%, underperforming the Russell 1000 Growth Index’s 1.12%. Poor security selection in the information technology and consumer discretionary sectors detracted from performance, while positive contributions from healthcare and industrials improved relative performance. In addition, please check the Fund’s top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, Aristotle Growth Equity Fund highlighted stocks like Alexandria Real Estate Equities, Inc. (NYSE:ARE). Alexandria Real Estate Equities, Inc. (NYSE:ARE) is a best-in-class life science REIT. On February 25, 2026, Alexandria Real Estate Equities, Inc. (NYSE:ARE) stock closed at $54.06 per share. One-month return of Alexandria Real Estate Equities, Inc. (NYSE:ARE) was 0.02%, and its shares lost 46.44% over the past 52 weeks. Alexandria Real Estate Equities, Inc. (NYSE:ARE) has a market capitalization of $9.369 billion.

Aristotle Growth Equity Fund stated the following regarding Alexandria Real Estate Equities, Inc. (NYSE:ARE) in its fourth quarter 2025 investor letter:

"We sold the position in Alexandria Real Estate Equities, Inc. (NYSE:ARE) because the weak market in laboratory real estate is expected to persist for longer than our previous expectations. There is an oversupply of vacant lab space and demand for the space is weak due to weak capital markets for biotech fundraising, slow approvals on new medications by the FDA and less funding for the National Institutes of Health (NIH). Alexandria Real Estate Equities has developments under construction that will be delivered into a weak leasing environment. The company is selling assets to fund these developments, which will likely reduce future earnings power."

Alexandria Real Estate Equities, Inc. (NYSE:ARE) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 34 hedge fund portfolios held Alexandria Real Estate Equities, Inc. (NYSE:ARE) at the end of the fourth quarter, up from 31 in the previous quarter. While we acknowledge the potential of Alexandria Real Estate Equities, Inc. (NYSE:ARE) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Alexandria Real Estate Equities, Inc. (NYSE:ARE) and shared Diamond Hill Small Cap Strategy's views on the company. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.