Madison Small Cap Fund Exited Confluent Following IBM Acquisition Announcement The Madison Small Cap Fund, managed by Madison Investments, disclosed in its fourth-quarter 2025 investor letter that it had sold its stake in Confluent, Inc. (NASDAQ: CFLT) after the company announced its acquisition by IBM for $11 billion, or $31 per share. This price represented a 35% premium to Confluent’s closing price the previous Friday. The fund’s decision to exit the position was based on the expectation that competing bids were unlikely and that the acquisition price offered an opportunity to realize gains. The fund sold its holdings at prices above $30 per share to allocate capital to other investment opportunities. The fund’s fourth-quarter performance was marked by underperformance relative to its benchmark, the Russell 2000 Index. While the index returned 2.2%, the fund’s Class I shares posted a -0.4% return. Sector allocation played a significant role in this underperformance, with the healthcare sector being the weakest performer. The fund expressed cautious optimism about the speculative market’s potential to lose momentum, while acknowledging the risks of prolonged market irrationality. Confluent, a technology company specializing in data streaming platforms, was highlighted as one of the fund’s top holdings in its investor letter. At the time of the announcement, Confluent’s stock closed at $30.67 per share, with a one-month return of 0.36% and a 52-week gain of 12.76%. The company’s market capitalization stood at $11.019 billion. The acquisition by IBM, which was finalized in March 2026, marked a significant shift for Confluent, as the company transitioned from an independent entity to a subsidiary of a major tech giant.#ibm #madison_investments #madison_small_cap_fund #confluent_inc #russell_2000_index
