Fast Track: Hedge fund platform hires a business builder

After two years of building a foundation, and six months after the business was launched in the marketplace, PlusFunds.com of New York is ready for John Pileggi.

Mr. Pileggi, 42, was recently named president and chief executive of the service platform for hedge funds. The appointment moves Christopher Sugrue, the company’s CEO since its inception, to chairman.

While Mr. Sugrue can be credited with attracting the brand-name financial backers and successfully directing the fledgling company to just beyond the starting gate, he knows his limits, and he understands the importance of making the next step count.

“I came to the conclusion that in order to achieve our incredible potential, I needed to focus on continuing to articulate our vision and set our corporate direction,” Mr. Sugrue says. “I decided I needed a partner to take charge of executing our strategy.”

Enter Mr. Pileggi.

a mover and A shaker

The new CEO, who joined the company Feb. 1, was hired because of his reputation as an executive who gets things done in a hurry. He is expected to put the PlusFunds name in a prominent position in the financial services industry.

While he brings the experience of a 22-year career in both institutional and retail financial services, his record indicates that he shines brightest when assigned to build a business from the ground up.

At ING Investment Products, a West Chester, Pa., unit of Holland’s ING Groep, Mr. Pileggi was responsible for building an entire mutual fund family – from the initial brainstorming to the regulatory filing stage – over about four months. He created 14 funds using ING money managers around the world.

“He can start something from scratch and build it overnight,” says Toby Hoden, chief marketing officer of ING Investment Products. “This is a guy who sinks his teeth into something and doesn’t let go. He’s a builder and a launcher, and he has a massive amount of energy.”

Mr. Pileggi, who spent 14 years with Furman Selz LLC and ended up at ING when Furman was acquired by the Dutch insurer in 1997, says most of the success he has had in his career has been when working on startup enterprises.

The basic PlusFunds model includes hedge fund managers listing offshore clones of their existing funds on the PlusFunds database, which can be accessed by wealthy individual and institutional investors.

For the participating hedge funds, of which there are 20 with $500 million in combined assets under management, the PlusFunds model represents a rare marketing outlet. The hedge funds pay PlusFunds a fee based on assets invested.

“We’re not sharing too many of the company’s goals yet, since we are just out of the box, but there’s always magic in the $1 billion mark,” he says in a reference to his intention to double the current combined assets of the hedge funds listed on the site.

a mixed approach

The strategy, as he explains, will involve a blend of marketing and education. Mr. Pileggi will assemble a sales team to reach the hedge fund managers.

“Hedge fund managers are not known for their marketing abilities,” he says. “This will provide them with access to a community of investors that want the kind of information we are offering on the website.”

Of course, to attract hedge funds – the paying customers – Mr. Pileggi must also concentrate on building the subscriber base, which will be made up primarily of intermediaries such as pension consultants and financial advisers.

“The second piece for the sales force will be to call upon the intermediaries,” he says. “We will be focusing on the concept of providing investors with transparency that includes real-time pricing, risk measurement and standardized hedge fund information.”