Your average student organization doesn’t require a formal application, an interview, or twice-weekly classes for that matter. And when you join, it probably will not refer to you as a “research analyst.”
You will find this all in the Atkins Investment Group, a student organization within UNH’s Whittemore School of Business and Economics (WSBE). The requirements are understandable, considering there’s $40,000 at stake.
The Atkins Investment Group provides a hands-on opportunity for students interested in the world of investing by giving them the funding to do some of their own. The 40 students that comprise the group manage an investment portfolio of approximately $40,000, the product of a donation from alumnus Gerald F. Atkins in 2004. The group is split into 10 sectors, based on the Global Industry Classification System, which classifies companies into categories ranging from healthcare to technology to utilities. Each sector within Atkins consists of a leader along and two research analysts.
And all the investments they’re making are real.
“The cool thing about the group is that this is what the professional money managers are doing, just on a smaller scale,” said Ben Collins, president of the group.
The group meets twice each week for class, which begins with a quick review of the portfolio by the various sectors. Presentations are then conducted by two of the sectors on how they believe the portfolio could be improved, in relation to holdings within their sector.
“They’re usually very elaborate presentations on companies currently held and others they’re proposing we purchase,” said Conor O’Keefe, portfolio manager for the group.
The presentations require rigorous research. Potential investments are evaluated both qualitatively, looking at things such as the company’s business model and competitive model, and quantitatively, which includes ratio comparison and financial statement analysis.
Following presentations, the class takes a vote on whether to take the recommended actions, which requires a majority.
The group usually has at least one holding in each sector, which keeps all students involved, even if the fund sometime suffers because of it.
“We have to balance money making with the education value,” O’Keefe said.
Although the class has two academic advisors within WSBE, students are responsible for everything from running the classes to choosing the next investment.
“Performance is almost strictly up to the students,” Collins said.
To maximize performance, the group strives to remain fully invested at all times.
“The average equity we hold stays in for six months to a year,” O’Keefe said.
Since it can be hard to calculate success when the economy fluctuates, the group has chosen a benchmark for comparison that fluctuates with it.
“The goal is to beat the benchmark, and our benchmark is the S&P 500,” said O’Keefe, referring to the index of 500 large-cap common stocks actively traded in the U.S.
Last year, the fund outperformed the S&P 500 by two to three percent, so the group accomplished its goal even though, in absolute terms, the fund lost money. In previous years, the group has beaten the benchmark by upwards of 10 percent.
Collins expects this trend to continue.
“I think we’ll do pretty well this year,” he said.
The fund has weathered the recent economic troubles, and is still worth approximately $40,000, the same amount it started at in 2004.
“If you look at the S&P [in 2004], it was a lot higher than it is now,” O’Keefe said. “We’ve outperformed the market as a whole.”
The group has participated in several competitions. In the spring, the group placed tenth of 80 schools in CME’s Group Commodity Trading Challenge, a nationwide competition between student-managed investment groups to trade gold and oil futures.
“That was a huge boost of confidence – that we did so well,” O’Keefe said.
Next month, the group will be participating in a two-week equity challenge, and the group has gone to several conferences in the past as well.
“The more we get involved, the more the group grows,” Collins said.
The group has an application and interview process in the spring of each year, and sometimes in December, to replace members who have left due to graduation or other reasons. Last spring, 80 students applied for 25 open positions.
“We like to look at students that are going to be passionate about what they’re doing,” Collins said.
Though the majority of analysts are finance majors, the group is open to all majors.
Senior philosophy major Kyle Flynn is the one of the few non-WSBE students among the group.
“Sitting in the first few classes as a junior who had not taken one finance class… I had a few of those sinking-stomach ‘Should I really be here?’ moments,” Flynn said.
However, one year later, Flynn is vice president of the club and fresh off an internship with an investment consulting firm.
“When all is said and done, being a part of the group can be extremely stressful and the workload can be enormous,” Flynn said, “but it definitely pays dividends.”
Indeed, the success of the group can be seen through its alumni. Previous club officers have gone on to jobs with Morgan Stanley, hedge fund investors and investment banking positions.
“Atkins gives students involved in it the opportunity to get into the industry of high finance that traditionally is dominated by undergraduates from the top schools in the country,” Collins said.
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