Fred Alger Management has issued the fourth-quarter 2025 investor letter for its Alger Small Cap Focus Fund. The document is available for download.
The U.S. equity market finished the fourth quarter strongly, with the S&P 500 rising 2.7%. Corporate earnings that exceeded expectations, the Federal Reserve's continued interest rate easing, and a resilient macroeconomic environment supported investor optimism. Additional clarity on trade policy provided further support.
Beneath the index level, the quarter saw increasing divergence. Enthusiasm for AI investment is encountering growing doubts due to bottlenecks, financing challenges, and uncertainty over its ability to generate returns. The firm notes it continues to observe secular trends that offer attractive opportunities for small-cap stocks.
In Q4 2025, the Fund's Class A shares outperformed the Russell 2000 Growth Index. The Utilities and Financials sectors contributed positively to the Fund's relative performance during the quarter, while the Consumer Discretionary and Information Technology sectors detracted from it.
The letter highlighted Stevanato Group S.p.A. (NYSE:STVN). The company designs and distributes products and processes, providing integrated solutions for the biopharma and healthcare industries. Over the past month, Stevanato Group's return was -3.80%. Its shares have declined 13.57% over the last 52 weeks. On January 16, 2026, the stock closed at $19.75 per share, giving it a market capitalization of $5.392 billion.
Regarding Stevanato Group, the Fund stated in the letter: "Stevanato Group S.p.A. (NYSE:STVN) is a leading supplier of pharmaceutical-grade glass packaging used to store and deliver medicines, including vials, pre-filled syringes, and cartridges across many therapies. The company also provides end-to-end solutions that support the drug life cycle, which can shorten lead times, lower total costs, and reduce supply-chain risk for customers. Shares detracted in the fourth quarter after third-quarter results benefited from shipment timing—orders that were originally expected to ship in the fourth quarter were pulled forward into the third quarter—raising concerns that fourth-quarter results would be softer. Full-year revenue guidance was unchanged, which also implied a fourth-quarter outlook slightly below investor expectations. In addition, some investors remain concerned that the growth of oral GLP-1 drugs could eventually take share from injectable GLP-1s, a recent demand driver for Stevanato’s delivery components."