Money manager Ronald Baron produced returns of 44 percent for investors in his Baron Partners Fund during the past 12 months, bolstered by investments in companies that help businesses reduce risks and help gamblers take them.

The two biggest holdings in the $225 million fund are Wynn Resorts Ltd., whose founder, Stephen Wynn, has developed five casinos, including the Mirage in Las Vegas, and ChoicePoint Inc., a provider of background checks for employers.

"If you accept higher risk, you had better get a higher return," said the 61-year-old Baron, whose Baron Capital Group Inc. in New York manages more than $8 billion for clients. Baron has about $60 million of his own money in the Partners fund, making him the biggest shareholder.

The Partners fund ranks as the top-performing market-neutral mutual fund of 19 tracked by Bloomberg during the past 12 months. Market-neutral funds can bet on stocks that are expected to fall as well as rise. Baron's fund has investments in about 40 companies, with short positions in about 10 of them.

The fund started in 1992 as a hedge fund. It was converted to a mutual fund 13 months ago to open it to more investors, said Baron, who managed money for billionaire hedge-fund manager George Soros in the 1980s. The fund now requires a minimum investment of $2,000, compared with the $1 million it required when it was a hedge fund.

In April 2003, Baron, his firm and two of his traders agreed to pay $2.7 million to settle Securities and Exchange Commission allegations that they made manipulative stock trades in 1999. They neither admitted nor denied wrongdoing.

"I obviously wish it never happened," said Baron. "There was never any allegation that we benefited at the expense of shareholders." He declined to comment further on the matter.

Baron graduated from Bucknell University and later attended George Washington University Law School. He became a securities analyst in 1970. He said he invests in companies with potential to profit from broad demographic or social trends such as the world's aging population, heightened concerns about terrorism, and increased demand for education and gambling.

His holding in what today is Wynn Resorts dates to 1980 when the company led by Wynn was building the Golden Nugget casino in Atlantic City. He also owns some of the company's convertible bonds.

Baron said he remains optimistic about the company's prospects because of its planned entrance into Macau. Wynn Resorts was one of three companies awarded gambling licenses in 2002 by Macau, the former Portuguese colony near Hong Kong. The company plans to break ground on a new resort this year.

"It's going to be extraordinarily profitable, and we're going to make a ton," Baron said. Shares of Wynn Resorts, the fund's largest holding, have more than doubled in the past year.

Baron expects earnings at ChoicePoint, the fund's second-biggest holding, to increase at an annual rate of 18 to 20 percent for the next five years. The Alpharetta, Ga.-based company conducts background checks and provides identification data to businesses and government agencies, including the Federal Bureau of Investigation and the Central Intelligence Agency.

"They know more about anyone who lives in America than anyone," said Baron.

The Partners Fund owns shares of Apollo Group Inc., which operates the largest for-profit education company in the United States. It also has an investment in Apollo Group's University of Phoenix Online unit. Shares of Apollo Group, the fund's third-biggest position, have risen 62 percent since last June, and shares that track University of Phoenix Online have doubled.

Apollo Group's enrollment has increased by about 27 percent each quarter for more than a year as more working adults attend evening and weekly classes. The fund has held Apollo Group shares for five years.

In 1999, Baron and his colleague Susan Robbins visited the Art Institute of Houston after the school's parent, Education Management Corp., an Apollo Group competitor, was sued by former and current students for allegedly providing misleading information about the quality of education they would receive.

Baron held on to his shares, and an appeals court judge ruled in 2000 that the claims had to be resolved through arbitration. Shares of Education Management have gained 47 percent in the past 12 months.

Every year, Baron hosts a conference to allow fund shareholders to question his firm's investment strategy.

While the meetings are meant to be informative, they're known for their entertainment. Last year's event included a performance by Paul Simon and members of the cast of the Broadway musical "Movin' Out," which features music by Billy Joel, a past performer at the conference.

Baron said investors should also have a chance to approach leaders of the companies his funds invest in, to ask them questions and "look them in the eye."

"We're betting on people," Baron said. "We're betting on dreams."