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'''Gary Pilgrim''' (born {{Birth date|1940|11|05}} in [[Nowata, Oklahoma]]) is a retired [[investment manager]] and a founding partner of Pilgrim, Baxter, Hoyt & Greig, later known as Pilgrim Baxter & Associates. He is best known for his management of the PBHG Growth Fund, one of the most popular growth-style [[mutual funds]] of the mid- to late-1990s,{{according to whom|date=November 2022}}and the market-timing scandal associated with that firm's downfall.

==Investing style==
{{BLP unreferenced section|date=November 2022}}
Pilgrim is considered an innovator in [[growth stock]] investing.{{according to whom|date=November 2022}}  Early in his career, he developed an aggressive style which utilized an unusually systematic method of identifying small, rapidly growing companies with the potential to beat quarterly earnings expectations, which would result in sharp upward movement of their stock price. He also exhibited little concern over high [[price-earnings ratio|P/E ratios]], and very little tolerance for companies that missed earnings estimates, resulting in relatively high portfolio turnover. This style, sometimes referred to as "earnings momentum", is characterized by high volatility, with a tendency toward dramatic gains or losses.

==Pilgrim, Baxter & Associates==

Pilgrim started work as a loan officer at [[Philadelphia National Bank]] in 1967.  He soon moved to the trust department, and over the next decade rose to the position of Senior Vice President. It was at PNB that he met Harold Baxter, Stephen Hoyt, and George Greig, with whom he left in 1982 to establish Pilgrim, Baxter, Hoyt & Greig. (With the departures of Hoyt and later Greig, the company was renamed Pilgrim Baxter & Associates.)

PBH&G was initially dedicated entirely to managing money for institutional pension funds, and as a result was virtually unknown to the general public. In 1985, they entered the mutual fund market with the PBHG Growth Fund. For its first eight years, the fund went largely undiscovered due to the fact that it was a load fund and was not marketed to the public. Its performance was impressive, however.{{Peacock inline|date=November 2022}}  The fund returned 46.6% in 1993, and rose 225% over the three years ending November 1993.<ref>John Waggoner. "[https://www.usatoday.com/money/waggon/archive/wag0006.htm Bottom-fishing for mutual funds]", ''[[USA Today]]'', January 6, 2000.</ref>  This performance came to light in late 1993 when the fund went no-load and received a torrent of media attention, beginning with the August edition of ''Money'' magazine in which it was declared that "few people other than his clients recognize the name of today's hottest fund manager: Gary Pilgrim."<ref>Junius Ellis. "[https://money.cnn.com/magazines/moneymag/moneymag_archive/1993/08/01/88186/index.htm This Little-Known Hhotshot's Picks Ccould Get You 45%]", ''[[Money (magazine)|Money]]'', August 1, 1993.</ref>  At a time when public awareness of mutual funds was rapidly increasing, Pilgrim quickly became one of the industry's most famous names.{{according to whom|date=November 2022}}  The fund continued to deliver very strong performance over the next three years - in the beginning of 1996, it had a three-year annualized return of nearly 30%.  At the end of June 1996, it was the #1 performer among all equity funds over the previous 10 years, according to Lipper Analytical Services.<ref>Werner Renberg. "[http://www.articles.sun-sentinel.com/1997-03-17/business/9703140155_1_equity-funds-mid-cap-stocks-mid-cap-fund If Your Funds Are Underperforming, Investigate]{{dead link|date=September 2024|bot=medic}}{{cbignore|bot=medic}}", ''[[Sun Sentinel]]'', March 17, 1997.</ref> Meanwhile, the fund's assets under management had increased from about US$8 million in 1993 to US$5 billion in mid-1996.  During Pilgrim's peak popularity in 1996, Sheldon Jacobs, the editor in chief of the ''No-Load Fund Investor'', stated, "I have never seen a group that has done so consistently well."<ref name="nytimes">Reed Abelson. "[https://query.nytimes.com/gst/fullpage.html?res=9D00EFDB1539F930A15755C0A960958260&scp=12&sq=pbhg+pilgrim&st=nyt MUTUAL FUNDS]", ''[[The New York Times]]'', June 23, 1996.</ref> The October 1996 ''Kiplinger's Personal Finance Magazine'' gave Pilgrim the following review: "Forget Peter Lynch: Gary Pilgrim is the best stock picker of the past five years and the past ten."<ref>Fred W. Frailey. "[http://www.allbusiness.com/company-activities-management/financial/8673068-1.html Gary Pilgrim: insider interview]", ''Kiplinger's Personal Finance Magazine'', October 1, 1996.</ref>

Unfortunately for many investors who, in response to massive media attention, bought into the fund at this time, late-1996 to early-1999 was a difficult period for PBHG Growth as market trends turned against small growth stocks, even as the economy at large flourished.  During this 10-quarter period, the fund struggled to break even, while the S&P 500 returned 95%.<ref name="findarticles">Manuel Schiffres. "[http://findarticles.com/p/articles/mi_m1318/is_4_54/ai_60377260 Big Mo Is Back]", ''Kiplinger's Personal Finance Magazine'', April 2000.</ref>{{Better source needed|date=November 2022}}

As the internet technology boom took off, however, PBHG Growth's performance skyrocketed, returning 93% in 1999.<ref name="findarticles" /> But with the economic downturn which began in early 2000, the fund, true to its volatile nature, began to fall precipitously, losing 34% in 2001 and 30% in 2002.{{citation needed|date=November 2022}}

Pilgrim appeared in the 1998 and 2004 editions of Jason Kelly's book ''The Neatest Little Guide to Stock Market Investing'' as a "master" investor whose strategy should be studied, though probably not strictly emulated, by individuals seeking success in stock market investing.{{citation needed|date=November 2022}}

==Quotes==

"Anyone who sticks with a particular investment approach will be frustrated by the market occasionally. Our history suggests that we're usually in the top quartile or bottom quartile of returns and don't spend much time in the middle."<ref name="findarticles" />

"I'm very confident that as long as I can put together a portfolio of companies growing 40% a year, these stocks can be leaders. In my mind, this is the natural state of affairs."<ref name="findarticles" />

"As growth managers go, we're among the most aggressive because we always look for companies in the early to middle stages of maturity."<ref>{{cite web|author=Nanette Burns|url=https://www.bloomberg.com/news/articles/1995-12-24/four-gurus-and-a-lofty-market|title=FOUR GURUS AND A LOFTY MARKET|publisher=Business Week|date=December 25, 1995|archive-url=https://archive.today/20120721013135/http://www.businessweek.com/1995/52/b345645.htm|archive-date=2012-07-21}}</ref>

"I focus on companies that are doing well, not ones that have stumbled, or missed by just a little bit. I like to be in a good mood, and every stinker I don't get rid of just irritates me. I like to like my portfolio."<ref>"[https://www.usatoday.com/money/perfi/stocks/0004.htm When to sell stocks depends on who you ask]", ''USA Today'', October 20, 2000.</ref>

==Market timing==
On November 20, 2003, both the [[Securities and Exchange Commission]] and New York Attorney General [[Eliot Spitzer]] filed charges against Pilgrim, Harold J. Baxter, and PBA for civil [[securities fraud]] and breach of fiduciary duties.<ref>Leticia Williams; Jonathan Burton. "[http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BB046058D-CFCB-4EA7-9D0E-5386C0BE192F%7D&siteid=google&dist=google Pilgrim Baxter charged with fraud]", MarketWatch, November 20, 2003.</ref><ref>[https://www.sec.gov/litigation/litreleases/lr18474.htm LITIGATION RELEASE NO.18474 ]. [[U.S. Securities and Exchange Commission]] (November 20, 2003).</ref> Pilgrim was accused of allowing one of his friends, Michael Christiani, the manager of a hedge fund called Appalachian Trails L.P., to use a [[market timing]] strategy which rapidly traded shares of, among other funds, the PBHG Growth Fund. Though market timing is not illegal, it had begun to be considered potentially deleterious to buy-and-hold investors.{{citation needed|date=November 2022}} In fact, at the time charges were brought in 2003, PBA had already expelled all market timers from its funds and had allowed no such activity since December 2001. There were no accusations or evidence of the illegal late trading which factored in several other cases of the [[2003 mutual fund scandal]].

On November 17, 2004, the S.E.C. announced a settlement which forbade Pilgrim and Baxter from publicly denying wrongdoing, and required each to personally pay US$80 million while PBA would pay US$90 million, for a total of US$250 million. In addition, both Pilgrim and Baxter were permanently forbidden from employment in an investment-advisory capacity.<ref>{{cite press release |title=Harold Baxter and Gary Pilgrim Agree to Pay a Total of $160 Million to Settle Fraud Charges Concerning Undisclosed Market Timing |publisher=U.S. Securities and Exchange Commission |date=November 17, 2004 |url=https://www.sec.gov/news/press/2004-157.htm}}</ref>

Despite attempts to recover, the PBHG Funds brand was too badly damaged by the incident to remain viable. In 2004, PBA was renamed Liberty Ridge Capital by parent company Old Mutual. The PBHG Funds were absorbed into the Old Mutual Funds group, and Liberty Ridge Capital ceased operating in 2009.

==Philanthropy==

In 1998, Pilgrim established the Pilgrim Foundation, with the purpose of benefiting vulnerable women and children in [[Chester County, Pennsylvania]].  The foundation has since expanded its mission to support non-profit work nationally and internationally.<ref>{{cite web |title=The Pilgrim Foundation website |url=http://www.thepilgrimfoundation.org}}</ref>

==Notes==
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[[Category:1940 births]]
[[Category:Living people]]
[[Category:American money managers]]
[[Category:People from Nowata, Oklahoma]]