Fred Alger Management has issued the fourth-quarter 2025 investor letter for its Alger Small Cap Focus Fund. The U.S. equity market finished the quarter strongly, with the S&P 500 rising 2.7%. Investor confidence 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 also provided support.
Beneath the index level, the quarter saw growing divergence. Enthusiasm for artificial intelligence investment is encountering increased skepticism due to bottlenecks, financing issues, and questions about its potential to deliver returns. The firm notes ongoing long-term trends that offer compelling opportunities for small-cap stocks.
During the fourth quarter of 2025, the Fund's Class A shares performed better than the Russell 2000 Growth Index. The Utilities and Financials sectors added to the Fund's relative performance, while the Consumer Discretionary and Information Technology sectors were detractors.
The investor letter highlighted UniQure N.V. (NASDAQ:QURE), a biotechnology company focused on treatments for rare and severe diseases. UniQure's one-month return was -8.57%, but its shares have gained 62.56% over the past 52 weeks. On November 18, 2025, the stock closed at $22.84 per share, giving the company a market capitalization of $1.42 billion.
In the letter, Alger Small Cap Focus Fund stated: "UniQure N.V. (NASDAQ:QURE) is a biotechnology company developing AMT-130, an investigational gene therapy for Huntington’s disease—an area with no approved disease-modifying treatments. Shares were highly volatile in 2025, surging after the company reported three-year Phase 1/2 data indicating meaningfully slower disease progression—approximately 75% versus a propensity-matched external control cohort. However, shares detracted during the quarter after U.S. Food and Drug Administration (FDA) feedback signaled that the external-control dataset may no longer be adequate as primary evidence to support an accelerated approval filing, increasing regulatory uncertainty and likely extending the timeline despite the encouraging efficacy signal."
According to database records, 59 hedge fund portfolios held UniQure N.V. at the end of the third quarter, an increase from 36 in the prior quarter. For the September quarter, UniQure reported revenue of $3.7 million, compared to $2.3 million in the third quarter of 2024.