Christine Baxter, who once managed more than $1 billion in mutual fund assets for
, is handing the reins of the PBHG
Emerging Growth fund to a colleague and moving to the firm's private equity group.
Erin Piner, who manages PBHG's $110 million
Limited fund, will take the reins of Emerging Growth on Jan. 1. Baxter managed the Limited fund before turning it over to Piner in October 1998. The two funds had a combined $1 billion in assets at that point.
The $768 million Emerging Growth fund lags most of its small-cap growth peers, including PBHG's other two small-cap growth funds with one-year records, Limited and
Strategic Small Company. But parent company
Pilgrim Baxter & Associates
says the change isn't motivated by underperformance, and that Baxter's move is her decision. The move was announced in a Dec. 23 regulatory filing.
Emerging Growth shareholders who've hung on through the firm's recent manager
departures shouldn't worry about a significant strategy shift. The firm's small-cap managers all follow an earnings momentum approach, and Piner has worked closely with Baxter over the past four years, according to company spokesman Tucker Hewes. This year, Piner's Limited fund is beating its category average by more than 8 percentage points.
"It's not necessarily a bad thing that they're changing the manager," says Jim Folwell, an analyst with Boston fund-researcher
. He points to
Janus Twenty as an example of a fund's system working after the departure of the manager, in that case
Of course, Emerging Growth's style has led to some white-knuckle volatility. In the past three years the feast-or-famine momentum style has helped Emerging Growth post quarterly losses and gains of as much as 20%. Morningstar gives the fund its worst grade ("F") for risk.
Baxter, 30, daughter of Pilgrim Baxter Chairman and CEO Harold Baxter, has managed the Emerging Growth fund since its 1993 inception. She will move to PBHG's private equity group, which manages
Pilgrim Baxter Hybrid Partners I
, a $283 million private equity fund that closed in 1996. The firm hopes to expand its private equity business.
Catch Ryan Jacob, portfolio manager of the Jacob Internet Fund, this weekend on "TheStreet.com" on Fox News Channel at special New Year's weekend times: Saturday at 6 p.m. EST and Sunday at 11 a.m. EST.