Fred Alger Management has published the fourth-quarter 2025 investor letter for its Alger Weatherbie Specialized Fund. The letter is available for download. The fund invests in approximately 50 small and mid-cap growth companies.
U.S. equities finished the quarter strongly, with the S&P 500 rising 2.7%. Investor sentiment was bolstered by corporate earnings that exceeded expectations, the Federal Reserve's continued move toward lower interest rates, and a stable macroeconomic environment. Trade policy developments offered further support.
Beneath the index level, performance varied widely. Artificial intelligence remains a significant market driver but faces questions over funding, limitations, and investment returns. The firm is monitoring long-term trends for opportunities. Business spending in the U.S. is increasing, driven by demand for AI infrastructure and tax incentives from recent legislation.
During the quarter, the Fund's Class A shares did not match the returns of the Russell 2500 Growth Index. Holdings in Real Estate and Consumer Staples aided relative performance, while positions in Information Technology and Health Care detracted from it.
The letter highlighted FirstService Corporation (NASDAQ:FSV), a real estate services company. On January 16, 2026, its stock closed at $162.23 per share. It posted a one-month return of 6.04% but declined 11.04% over the past 52 weeks. The company's market capitalization is $7.428 billion.
In the letter, the fund commented on FirstService. "FirstService Corporation (NASDAQ:FSV) provides property and commercial building services through two segments: FirstService Residential, which offers residential property management services across North America, and FirstService Brands, which serves residential and commercial customers through franchise systems and company-owned operations," the letter stated.
"Shares detracted during the quarter as the market focused on weakness in the more cyclical Brands businesses— particularly restoration and roofing—where management cited tempered activity and a cautious outlook. That concern was reinforced on the third-quarter earnings call, when results were in line on earnings but light on revenue, and management pointed to weather-related and broader commercial macro headwinds weighing on the Brands segment and likely persisting into the next quarter, pressuring the stock despite relative resilience in Residential."