“Far and away the best prize that life offers is the chance to work hard at work worth doing.” – Theodore Roosevelt
The modern business world is evolving and internationalising at record pace, making it more important than ever for the modern business graduate to be able to make financial decisions that are both thoughtful and informed.
So, in order to produce graduates that are thoroughly ‘business-ready’, some universities provide a Student Investment Fund that is managed entirely by their business student cohorts.
In this sort of program, business students can get a little dose of that real-world, thrilling investment pressure they’ll soon be facing year after year. It provides invaluable experience for any student wishing to pursue a career in the Investment Management industry, equipping them with the competence that’s necessary to run a professionally disciplined pool of cash.
The Student Investment Fund, or SIF, is a platform that allows business students to apply learned investment theory to the physical realm of money management. It bridges the gap between knowledge they’ve learned in class, and the practical skills required for success in today’s capital markets.
Located on the West Coast of California in a cool-campus setting that could belong on the East Coast, the Eberhardt School of Business at the University of the Pacific is one of 200 business schools around the world that offers the Student Investment Fund.
Last year the Business School was ranked as the eighth best School of its kind in the State of California (Bloomsberg Businessweek), and with an international population of 18 percent, Bloomsberg also ranked Eberhardt School at number nine in the league table for the most diverse schools. The institution’s provision of its unique Student Investment Fund (SIF) is one factor that draws students from all around the globe.
Eberhardt’s SIF class is open to the University’s MBA and undergraduate business students, and is a comprehensive experience that runs over two semesters. Students enjoy the intimate size of the classroom, and revel in the real-life experience projects like the SIF provides them with before they even graduate.
Students are selected through a formal application process, and as the University states, “This select group of students learn how to scrupulously analyze potential investments using the same financial techniques professional investors use.”
As a School, Eberhardt boasts one of the largest student-run funds in the western United States, and its undeniable success even inspired a University alumnus, Larry Watts, to create his own fund for the company Morgan Stanley, which became the United States’ first commercialized student-run fund.
The program began in 2007, when Pacific alumnus and Douglass M. Eberhardt, President and CEO of the Bank of Stockton, donated US$1 million to students of the business school. Since then, the University’s Board of Regents added to the fund by authorizing almost US$1.5 million of the University’s endowment to be managed by the students.
The young business scholars are required to carry out research and evaluations, to structure informative reports and make important decisions regarding how and where to invest money from the fund. All transactions and reports are audited by an independent accounting firm, just like in a real investment fund, and students are taught the value of philanthropy as they split the assets between three organisations: the Business School itself, the men’s water polo team and the department of pathology.
The SIF at the Eberhardt School of Business is not a virtual investment or portfolio; it is real money and real investments.
In early 2014, the University of the Pacific’s SIF class was valued at roughly US$2.5 million, but in October that same year, the program smashed a monumental benchmark, hitting US$3million for the first time ever. Market fluctuations then caused the value to dip below that benchmark – as often happens in the unpredictable world of business – but in February, 2015, the fund shot back to US$3million, blowing multiple Wall Street competitors completely out of the water.
“The fact that the Student Investment Fund has surpassed US$4 million in such a short period of time is a tremendous testament to the instructors who have taught the course and the students who have embraced the learning opportunity,” said Eberhardt. “The primary goal of the fund was to allow hands-on learning, with the goal of achieving success. With that success, we added a philanthropy component to teach the students to give back to the University… I am extremely proud of the results.”
With an impressive record of 40 out of 42 students gaining employment at either the national or international level upon completion of the SIF, and a 2015 White House College Scorecard ranking of 8 out of 199 in terms of alumni salaries, the success of Eberhardt’s program really does speak for itself.
The Fund teaches students important lessons in business finance and investment that they can apply in the real-world, beyond the walls of the university, in the career they have always dreamed of. It also teaches them that success in business is not necessarily about how much you make, but about how much you are willing to give back.