PORTFOLIO RECOVERY ASSOCIATES, INC.

(Name of Issuer)

COMMON STOCK

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(Title of Class of Securities)

73640Q 10 5

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(Cusip Number)

David N. Roberts
AG Funds, L.P.
c/o Angelo, Gordon & Co., L.P.
245 Park Avenue
New York, NY 10167
(212) 692-2025

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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

November 17, 2004

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(Date of Event Which Requires Filing of this Statement)

     This Amendment No. 3 to Schedule 13D relates to shares of common stock, $0.01 par value per share (the “Shares”), of Portfolio Recovery Associates, Inc. (the “Issuer”). This Amendment No. 3 supplementally amends the initial statement on Schedule 13D, dated November 15, 2002, Amendment No. 1, dated May 28, 2003, and Amendment No. 2, dated January 1, 2004 (together, the “ Initial Statement”), filed by certain of the Reporting Persons (as defined herein) and other parties.

Item 2. Identity and Background.

     This Statement is being filed on behalf of each of the following persons (collectively, the “Reporting Persons”):

	(i)		AG Funds, L.P. (“AG Funds”);
	(ii)		PRA Investments, L.L.C. (“PRAI”);
	(iii)		John M. Angelo (“Mr. Angelo”); and
	(iv)		Michael L. Gordon (“Mr. Gordon”).

     This Statement relates to Shares held for the accounts of AG Funds and PRAI.

     Pursuant to an internal reorganization, the managing member of PRAI was changed, with AG Funds replacing Angelo, Gordon & Co., L.P. Therefore, Angelo, Gordon & Co., L.P. and its general partner, AG Partners, L.P., are no longer listed as Reporting Persons herein. AG Funds GP, L.P., a Delaware limited partnership, is the general partner of AG Funds. JM Funds LLC, a Delaware limited liability company, is the general partner of AG Funds GP, L.P. Mr. Angelo and Mr. Gordon are the sole members of JM Funds LLC. There was no change in ultimate beneficial ownership for Mr. Angelo and Mr. Gordon as a result of the transaction.

     During the past five years, none of the Reporting Persons and, to the best of the Reporting Persons’ knowledge, no other person identified in response to this Item 2 has been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) a party to any civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of which such person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding any violation with respect to such laws.

Item 5. Interest in Securities of the Issuer.

     Item 5 is hereby amended and restated in its entirety as follows:

     Based upon information provided by the Issuer in its prospectus dated November 17, 2004, the total number of Shares outstanding was 15,483,732 as of November 17, 2004.

     (a) (i) AG Funds may be deemed the beneficial owner of 2,984,500 Shares (approximately 19.28% of the total number of Shares outstanding). This number consists of (A)

 

1,061,275 Shares held for the account of AG Funds and (B) 1,923,225 Shares held for the account of PRAI.

          (ii) PRAI may be deemed the beneficial owner of 1,923,225 Shares (approximately 12.42% of the total number of Shares outstanding) held for its account.

          (iii) Mr. Angelo may be deemed the beneficial owner of 2,984,500 Shares (approximately 19.28% of the total number of Shares outstanding). This number consists of (A) 1,061,275 Shares held for the account of AG Funds and (B) 1,923,225 Shares held for the account of PRAI.

          (iv) Mr. Gordon may be deemed the beneficial owner of 2,987,000 Shares (approximately 19.29% of the total number of Shares outstanding). This number consists of (A) 1,061,275 Shares held for the account of AG Funds, (B) 1,923,225 Shares held for the account of PRAI and (C) 2,500 remaining Shares held for Mr. Gordon’s personal account.

     (b) (i) AG Funds may be deemed to have sole power to direct the voting and disposition of the 2,984,500 Shares held for the accounts of AG Funds and PRAI.

          (ii) PRAI may be deemed to have sole power to direct the voting and disposition of the 1,923,225 Shares held for its account.

          (iii) Mr. Angelo may be deemed to have shared power to direct the voting and disposition of the 2,984,500 Shares held for the accounts of AG Funds and PRAI.

          (iv) Mr. Gordon may be deemed to have shared power to direct the voting and disposition of the 2,984,500 Shares held for the accounts of AG Funds and PRAI and sole power to direct the voting and disposition of the 2,500 Shares held for his personal account.

     (c) Other than as set forth herein in Item 2 and Item 3, there have been no transactions with respect to the Shares since September 24, 2004 (60 days prior to the date hereof) by any of the Reporting Persons.

          (i) The partners of PRAI have the right to participate in the receipt of dividends from, or proceeds from the sale of, the Shares held for the account of PRAI in accordance with their partnership interests in PRAI.

          (ii) The partners of AG Funds have the right to participate in the receipt of dividends from, or proceeds from the sale of, the Shares held for the account of AG Funds in accordance with their partnership interests in AG Funds.

     (e) Not Applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

     On November 17, 2004, in connection with the Issuer’s recent secondary public offering (the “Public Offering”), William Blair & Company, L.L.C, Piper Jaffray & Co., and America’s

 

Growth Capital, LLC (collectively, “Underwriters”), the Issuer, PRAI and AG Funds entered into an Underwriting Agreement (the “Underwriting Agreement”), pursuant to which (A) AG Funds (i) sold 604,513 Shares to the Underwriter to be sold in the Public Offering, and (ii) granted the Underwriters of the Public Offering an option, exercisable within 30 days after the date thereof, to purchase up to an aggregate of 90,677 Shares at $34.50, less the underwriting discount, solely for the purpose of covering over-allotments; and (B) PRAI (i) sold 1,095,487 Shares to the Underwriter to be sold in the Public Offering, and (ii) granted the Underwriters of the Public Offering an option, exercisable within 30 days after the date thereof, to purchase up to an aggregate of 164,323 Shares at $34.50, less the underwriting discount, solely for the purpose of covering over-allotments. Each of the options was exercised by the Underwriters, and the transactions contemplated by the Underwriting Agreement were consummated on November 23, 2004.

     The foregoing description of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by the terms of the Underwriting Agreement, which is incorporated herein by reference.

     From time to time, each of the Reporting Persons may lend portfolio securities to brokers, banks or other financial institutions. These loans typically obligate the borrower to return the securities, or an equal amount of securities of the same class, to the lender and typically provide the borrower is entitled to exercise voting rights and to retain dividends during the term of the loan. From time to time, to the extent permitted by applicable law, each of the Reporting Persons may borrow securities, including the Shares, for the purpose of effecting, and may effect, short sale transactions, and may purchase securities for the purpose of closing out short sale positions in such securities.

     Except as set forth herein, and in the Initial Statement, the Reporting Persons do not have any contracts, arrangements, understandings or relationships with respect to any securities of the Issuer.

 

Item 7. Material to be Filed as Exhibits.

 

SIGNATURES

     After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this Statement is true, complete and correct.

Date: November 23, 2004	AG FUNDS, L.P.
	By:	AG Funds, GP, L.P.
		Its General Partner
	By:	JM Funds LLC,
		Its General Partner
	By:	/s/ Michael L. Gordon
		Name:	Michael L. Gordon
		Title:	Managing Member
Date: November 23, 2004	PRA INVESTMENTS, L.L.C.
	By:	AG Funds, L.P.
		Its Managing Member
	By:	AG Funds GP, L.P.
		Its General Partner
	By:	JM Funds LLC,
		Its General Partner
	By:	/s/ Michael L. Gordon
		Name:	Michael L. Gordon
		Title:	Managing Member
Date: November 23, 2004	/s/ John M. Angelo
	John M. Angelo
Date: November 23, 2004	/s/ Michael L. Gordon
	Michael L. Gordon

 

EXHIBIT INDEX

 

EXHIBIT A

JOINT FILING AGREEMENT

     The undersigned hereby agree that the statement on Schedule 13D with respect to the Shares of Portfolio Recovery Associates, Inc., with an event date of November 17, 2004, is, and any amendments thereto (including amendments on Schedule 13G) signed by each of the undersigned shall be, filed on behalf of each of us pursuant to and in accordance with the provisions of Rule 13d-1(k) under the Securities Exchange Act of 1934.

Date: November 23, 2004	AG FUNDS, L.P.
	By:	AG Funds, GP, L.P.
		Its General Partner
	By:	JM Funds LLC,
		Its General Partner
	By:	/s/ Michael L. Gordon
		Name:	Michael L. Gordon
		Title:	Managing Member
Date: November 23, 2004	PRA INVESTMENTS, L.L.C.
	By:	AG Funds, L.P.
		Its Managing Member
	By:	AG Funds GP, L.P.
		Its General Partner
	By:	JM Funds LLC,
		Its General Partner
	By:	/s/ Michael L. Gordon
		Name:	Michael L. Gordon
		Title:	Managing Member
Date: November 23, 2004	/s/ John M. Angelo
	John M. Angelo
Date: November 23, 2004	/s/ Michael L. Gordon
	Michael L. Gordon