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Market Update

Warburg Pincus Plans to Merge Post-Venture Funds

Warburg Pincus Global Post-Venture Capital Fund plans to swallow its larger sibling.

Warburg Pincus plans to merge its Post-Venture Capital Fund (WPVCX) into Warburg Pincus Global Post-Venture Capital Fund (WVCCX).

If shareholders approve the plan, the older, larger Post-Venture would be acquired by the younger, smaller Global Post-Venture. Although it might appear that Warburg Pincus is merely trying to bury a poor performance record, it makes sense for the merged portfolio to carry the record of the newer Global Post-Venture fund.

That's because the older Post-Venture Capital is the fund that's changing. As Global Post-Venture Capital always has, the merged fund will continue to invest without restriction around the globe. Post-Venture Capital's foreign investments had been limited to 20% of assets. Also, the fund will continue to invest in emerging markets, as Global Post-Venture had done.

That said, shareholders might still take Global Post-Venture's mighty record with a grain of salt. As of October 31, the portfolio had gathered just $7.4 million, making it extremely nimble. Although Post-Venture Capital has a relatively small asset base of $53 million, it might be tougher for a larger fund to be as successful in this niche market.