Pilgrim Baxter to Launch $100M Fund-of-Funds –

Pilgrim Baxter & Associates last month hired Carol Proffer away from Crossroads Group to head a new private equity fund-of-funds that initially will target venture capital investing.

Ms. Proffer, who was a managing director at Crossroads, said Pilgrim Baxter will begin marketing the fund-of-funds in September with a target of approximately $100 million. She added that the fund eventually will broaden its strategy to include other aspects of private equity, including investments in buyout funds.

In addition to venture capital fund commitments, the fund-of-funds will make direct investments in emerging public companies and later-stage venture-backed companies.

Cutting Out Complication

According to Jim Smith, a portfolio manager at Pilgrim Baxter, the fund-of-funds will be marketed primarily to institutions that have not had much experience in venture capital investing or that are too small to participate directly in funds. “This is a one-size-fits-all product for those who don’t want to soil their hands in a complicated investment world [of venture capital],” he said.

Ms. Proffer joined Crossroads, a Dallas money management firm, in 1997. Prior to that, she worked as chairperson at William M. Mercer Investment Consulting.

Prior to joining Pilgrim Baxter, Mr. Smith, who will be working closely with Ms. Proffer on the fund, worked at Sears Investment Management Co., where he oversaw the company’s private equity investment program.

Pilgrim Baxter, based in Wayne, Penn., manages more than $11 billion in assets. The firm was founded in 1982 primarily to invest in emerging growth stocks through a series of no-load mutual funds. In 1996, Pilgrim Baxter closed on the $81 million Pilgrim Baxter Hybrid Partners I, L.P., which expanded the firm’s investment mandate to include final round direct investments in venture-backed companies.