Developing a student managed fund: inspiring students and promoting corporate engagement Dr Alan Hanna Dr Barry Quinn

Session Aim and Objectives This session aims to share how a student managed fund was developed to inspire students to deepen their engagement with financial markets Objectives: • Share our journey • Outline structure and governance • Discuss benefits, barriers and solutions

Student Managed Funds • In the US – Well established and numerous – Often managing large endowments – Some manage investor funds

• In the UK/Ireland – Limited in number and fund size – Often run on a virtual basis

Our journey 2012

─ QMS Trading room established ─ Launch of Trading and Investment Club (QUTIC) ─ Virtual SMF Established

2014

─ SMF formalised

2015

─ Launch of real-money fund

Key objectives 1. 2. 3. 4. 5. 6.

Experiential learning Collaborative learning Employability and aspirations Corporate engagement Social responsibility International excellence

Structure and Governance Oversight Committee [OC] (Academics and Industry Professionals) Executive Committee [EC] CEO, CIO, CRO, CFO (Students appointed by OC) Sector Heads [SH] (Students appointed by EC) Sector Analysts [SA] (Students managed by SH)

Student Activities • • • • • • • •

Time and resource management Equity research and analyst reports Ethical considerations Stock pitching Portfolio construction & monitoring Risk management and compliance Investment reports Presenting to industry professionals

Resources • • • •

3 full time academic staff members 1 full time trading room manager 12 Bloomberg terminals Training – Bloomberg – Investment fundamentals

• Trading account

Corporate Engagement • • • • • • •

Trading room sponsorship Industry master classes Onsite visits Practitioner led workshops Professional mentors Networking and careers advice Fund raising

Benefits for Students • Provides an insight into ‘real world’ investing • Shows employers a demonstrable interest in financial markets • Roles are akin to real-life, high-profile positions such as Equity Analysts and Fund Managers • Employers are increasingly looking for graduates something above and beyond academic achievements

with

• First-hand experience working in a financial environment

• Professional qualifications • Extra-curricular activities such as SMF • Above all else, it sets your CV apart from the competition

Statistics • 175 students in QUTIC (up from 103) • 83 students in SMF (up from 49) • Make up of club – – – –

Discipline: 71 (Fin/Acc/Eco), 12 (Other) Level of Study: 19 (1), 26 (2), 21 (3), 17 (P) Gender: 62 (M), 21 (F) Nationality: 65 (EU), 18 (Non-EU)

Testimonials - Industry Declan Breslin, US Head of Client Services, Prime Brokerage at JP Morgan (SMF Donor) “This initiative is fantastic and a game changer when it comes to getting people exposed to the markets and the responsibility around setting up a platform and fund for long term objectives” Paul McNulty CFA, Setanta Asset Management (Industry Mentor) “Bloomberg has become the 'must-have tool' in the finance industry over the past 10 years. Its benefits were exhibited greatly when as industry mentor I sat down in the trading room early in 2014 […] to discuss their fantastic report. The trading room facilitated a real world analyst experience which will be invaluable to these dedicated students as they set out on their professional pathways”

Testimonials - Students Anthony Doran (Former SMF CEO) “Joining the SMF also helps develop a number of soft skills; interpersonal and teamwork skills are honed through the pitching and selection of investments and leadership skills are strengthened through the management of the Fund”

Dominic O’Sullivan (Former SMF CEO) “The privilege of listening in on the research call was a brilliant insight and really qualified for us the breadth of the knowledge of the equity researchers have in terms of the companies and industries they are focusing on”

Testimonials - Staff Dr Barry Quinn, Computational Finance Programme Director (SMF founder) “The fund’s meritocracy provides for healthy competition in investment decisions while its cooperative principles develops the soft skills that today’s financial services employers crave. We hope that the student’s will experience in real time how their collective decision-making influences performance and risk within the structure of an investment vehicle. The hierarchal structure of the fund encourages a peer to peer learning environment that develops strong bonds between students at all levels and from different degree pathways. The charitable nature of the fund also provides for some strong lessons in real world corporate social responsibility.”

Potential Barriers • • • • •

School commitment Concerns over risk Student commitment Fund continuity Fund raising

Our Solutions • Alignment with school strategy • Governance – Oversight committee – Investment philosophy

• • • •

Securing Student Union support Integration into taught programmes Degree Plus Emphasizing philanthropy

Questions [email protected] [email protected] http://go.qub.ac.uk/smfund

Queen's Student Managed Fund

@qubtradingroom

https://www.facebook.com/QUB-TradingInvestment-Club-152255718148040

References Bruce, B. & Greene, J. (2014). Trading and money management in a studentmanaged portfolio, Academic Press. Cooley, P. L., & Hubbard, C. M. (2012). FAQs about student managed funds. Advances in Financial Education, 10, p72-84. Gendron, M., & Czyrnik, K. (2012). Aligning trading rooms with a business schools strategy. International Journal of Business, Humanities and Technology, 2 (1), p85– 92. King, D., & Jennings, W. (2004). The impact of augmenting traditional instruction with technology-based experiential exercise. Journal of Financial Education, 30, p9-23. Lawrence, E. C. (2008). Student managed investment funds: an international perspective. Journal of Applied Finance, 18(2), p67-83. Macy, A. (2010). Student-Managed Investment Funds: A Framework for Regional Schools. Academy of Educational Leadership Journal 14 (2010): p47-62. Neely, W. P. & Cooley, P.L. (2004) A survey of student managed funds. Advances in Financial Education 2.1 (2004): p1-9.