A pioneer of the strategy of mutual funds writing big checks for startups before they go public, Henry Ellenbogen's returns at T. Rowe Price lured other investors into the fray. The billions of dollars in new capital from funds are largely responsible for skyrocketing valuations, fewer initial public offerings and talk of a bubble.

"The asset class is scary," said Ellenbogen, who manages $18.7 billion. He acknowledged that increased competition has made his job more difficult. "We're not just buying the basket - we're being highly selective and trying to invest in the best ones."

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