The competition began in late October, when students from each of the three schools formed teams. UD entered seven teams, comprised of students involved with the Davis Center for Portfolio Management and with Flyer Investments, which manages a $3 million portfolio for the University. About 30 teams, and a total of 144 students, were given a hypothetical portfolio of $100,000 to manage throughout the competition.
Merrill Lynch selected UD, Princeton and the University of Virginia to participate in its first Campus Portfolio Challenge, which will be rolled out to several more schools next year.
“I feel very honored that the University of Dayton was selected as one of three schools to launch this competition,” said David Sauer, associate professor of finance and director of the Davis Center for Portfolio Management. “That was a major compliment to what we’re doing here and the visibility our program is gaining in the New York financial community.”
Much of that visibility comes from the Redefining Investment Strategy Education, or RISE, symposium that UD’s Davis Center hosts each spring, in which investment professionals mingle with students from throughout the nation. Much of it also comes from enterprising UD alumni who brought UD’s program to the attention of Merrill Lynch: company analysts Greg DeMars and Kristin Klaus, both 2004 graduates, who were aided by UD senior Tom Dharte during his summer 2004 internship at Merrill Lynch.
“We knew Merrill Lynch recruited at Ivy League schools, and we asked to sit down with the human resources staff and talk to them about RISE and Flyer Investments,” DeMars said. “They agreed that Dayton would be one of the schools to participate in the first portfolio challenge.
“It has been a goal for many of us to have a major corporation come to UD and recruit in the Davis Center,” DeMars added. “This was a great opportunity to have Merrill Lynch be the first, and it was exciting to know we could bridge this gap and make it happen.”
But that was not all DeMars and Klaus did: They helped write the rules and judging criteria for the competition, based largely on those used in a similar competition held during the RISE symposium, and mentored the UD students throughout the contest.
“Working with UD alumni was great,” Bob Franz, a junior finance and accounting major, said. “They really had some great ideas, and it was a comfort to know we had some support going to Princeton. We also formed new relationships with other Merrill Lynch employees.”
The trip to Princeton, N.J., was quite an experience for the students. Based on final reports submitted in mid-December, Merrill Lynch selected one team from each school to present its portfolio and flew the students to its corporate campus to do so. Each team made a 10-minute presentation, then participated in a 10-minute question-and-answer session with the chief investment officer of Merrill Lynch Investment Managers, one of the company’s three divisions, and various division department heads. The judges evaluated the teams on the quality of their decision-making process, presentation style and effectiveness, clarity of portfolio strategy, sector weightings and economic outlook, and team dynamic.
“Princeton University had a unique strategy that developed quite high returns over the competition, but it was unclear how or if they could continue their high performance,” said George Eckerd, a sophomore applied mathematical economics major. “The judges were very positive and enthusiastic that all the students were this motivated at such a young age.”
Indeed, all the students’ work on the competition was done on their own time and was not part of any course requirement or project.
“The most challenging portion of the competition was the beginning,” said Laura Coffey, a senior finance major and international business minor. “We had to quickly form a strategy and economic outlook and uncover securities that fit our style and philosophy. Our team spent late nights researching in the Davis Center and met frequently to discuss all potential stock picks.”
Yet all the hard work not only paid off in the competition — it will also pay off in the long run, Sauer said.
“This provided students an additional opportunity to refine their skills and apply them,” he said. “The structure of the competition provided a realistic environment and a valuable, real-world experience with money managers.”