Brown Capital Management, an investment management company, released its first quarter 2026 investor letter for "The Brown Capital Management Small Company Fund". A copy of the letter can be downloaded here. In the first quarter of 2026, the Small Company Fund (Investor shares) fell 19.78%, significantly lagging the Russell 2000 Growth index's 2.81% decline. Worsened market conditions due to the Iran war, driving the oil price spike and increased volatility in equities. Despite stabilization in the performance as the quarter progressed, early declines and weakness in large positions significantly impacted the Fund's performance. Please review the Fund's top five holdings to gain insights into their key selections for 2026.
In its first-quarter 2026 investor letter, The Brown Capital Management Small Company Fund highlighted Veeva Systems Inc. (NYSE:VEEV). Veeva Systems Inc. (NYSE:VEEV) is a technology company that provides a cloud-based software platform for the life sciences industry. On June 23, 2026, Veeva Systems Inc. (NYSE:VEEV) closed at $159.71 per share. One-month return of Veeva Systems Inc. (NYSE:VEEV) was 0.77%, and its shares lost 42.86% over the past 52 weeks. Veeva Systems Inc. (NYSE:VEEV) has a market capitalization of $25.94 billion.
The Brown Capital Management Small Company Fund stated the following regarding Veeva Systems Inc. (NYSE:VEEV) in its Q1 2026 investor letter:
"To appreciate these criteria, consider Veeva Systems Inc. (NYSE:VEEV), which provides cloud-based software to the global life sciences industry, including the fields of biotechnology and pharmaceuticals. Unlike horizontal platforms such as Salesforce or HubSpot, which serve broad customer use cases across industries and face increasing AI-driven competition, Veeva's solutions are deeply embedded in highly specialized regulatory, clinical and commercial workflows. Its platform is built on proprietary, highly structured data tied to drug development and compliance processes, making Veeva's offering far less susceptible to commoditization from AI trained on public data. While aspects of Veeva's model are seat-based, its software is mission-critical and aligned with regulated activities, limiting the risk that AI-driven efficiency will reduce demand. Finally, Veeva operates as a system of record, serving as the authoritative source for regulated content and data, in contrast to more interface-driven systems of engagement that are easier to disrupt. Taken together, these characteristics suggest that Veeva is relatively well insulated from the disruptive effects of AI. Nevertheless, the company is trading at a 55% discount to its historical price/sales ratio, largely due to this AI derating."
In its first-quarter 2026 investor letter, The Brown Capital Management Small Company Fund highlighted Veeva Systems Inc. (NYSE:VEEV). Veeva Systems Inc. (NYSE:VEEV) is a technology company that provides a cloud-based software platform for the life sciences industry. On June 23, 2026, Veeva Systems Inc. (NYSE:VEEV) closed at $159.71 per share. One-month return of Veeva Systems Inc. (NYSE:VEEV) was 0.77%, and its shares lost 42.86% over the past 52 weeks. Veeva Systems Inc. (NYSE:VEEV) has a market capitalization of $25.94 billion.
The Brown Capital Management Small Company Fund stated the following regarding Veeva Systems Inc. (NYSE:VEEV) in its Q1 2026 investor letter:
"To appreciate these criteria, consider Veeva Systems Inc. (NYSE:VEEV), which provides cloud-based software to the global life sciences industry, including the fields of biotechnology and pharmaceuticals. Unlike horizontal platforms such as Salesforce or HubSpot, which serve broad customer use cases across industries and face increasing AI-driven competition, Veeva's solutions are deeply embedded in highly specialized regulatory, clinical and commercial workflows. Its platform is built on proprietary, highly structured data tied to drug development and compliance processes, making Veeva's offering far less susceptible to commoditization from AI trained on public data. While aspects of Veeva's model are seat-based, its software is mission-critical and aligned with regulated activities, limiting the risk that AI-driven efficiency will reduce demand. Finally, Veeva operates as a system of record, serving as the authoritative source for regulated content and data, in contrast to more interface-driven systems of engagement that are easier to disrupt. Taken together, these characteristics suggest that Veeva is relatively well insulated from the disruptive effects of AI. Nevertheless, the company is trading at a 55% discount to its historical price/sales ratio, largely due to this AI derating."
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