iMGP Small Company Fund’s Views on AppFolio (APPF)

iMGP Global Partner, an investment management company, recently released its fourth-quarter 2025 investor letter for the “iMGP Small Company Fund.” The Fund returned 1.33% in the fourth quarter, compared to the Russell 2000 Index’s 2.19% return. However, the Fund’s overall performance for 2025 was flat at 0.01%, in contrast to the Index’s 12.81% return. The market situation returned to normal in the fourth quarter, but the Fund’s poor performance was attributed to the impressive performance of biotech businesses, which saw an increase of more than 25%. The Fund typically avoids biotech stocks due to their binary nature.

Looking ahead to 2026, the Fund aims to refine its investment process and improve performance by focusing on high-quality, growing firms. The investor letter highlighted the top five holdings of the Fund to provide insights into their key selections for 2025.

One of the stocks mentioned in the letter was AppFolio, Inc. (NASDAQ:APPF), a US-based technology company that offers a cloud-based platform for the real estate industry. The stock closed at $191.17 per share on March 6, 2026. While AppFolio, Inc. saw a 4.02% one-month return, it had lost 11.34% over the past 52 weeks. The company has a market capitalization of $6.88 billion.

In the investor letter, iMGP Small Company Fund provided an analysis of AppFolio, Inc. The company is a cloud-based software, data, and services provider for the real estate industry, focusing on small to medium-sized property managers. The Fund noted that AppFolio’s results in the quarter were negatively impacted by a bonus accrual that caused margins to contract in 2025. However, the Fund sees this as a positive sign of growth, as every new customer added by AppFolio is expected to have a high lifetime value. The Fund also highlighted AppFolio’s initiatives to introduce AI solutions in 2026, which are expected to drive long-term growth.

While AppFolio, Inc. is not among the 40 most popular stocks among hedge funds, 33 hedge fund portfolios held the stock at the end of the fourth quarter. The company’s revenue reached $248 million in Q4 2025, marking a 22% year-over-year increase. The Fund sees potential in AppFolio, Inc. as an investment, but believes that certain AI stocks offer greater upside potential with lower downside risk.

In conclusion, iMGP Small Company Fund’s investor letter provides valuable insights into their investment strategy and key holdings for 2025. The Fund’s focus on high-quality, growing firms and its analysis of companies like AppFolio, Inc. showcase its commitment to delivering strong performance for investors.