School of Business finance students are putting their money where their mouth is. Supervised by Assistant Professors of Finance Derek Horstmeyer and Tiago Requeijo, six students work together on the Student Managed Investment Fund, an actual investment portfolio. The fund has investment and risk committees that present an annual report to the university’s Board of Trustees each semester.
The Student Managed Investment Fund launched in spring 2018 with approval from the Board of Trustees. Students can participate by registering for FNAN 477 Student Mangaed Investment Fund and can voluntarily stay on to serve in leadership roles after completing the course.
The fund’s bylaws state that if a stock falls more than 20%, they must get out immediately. If a stock falls 10%, the investment committee convenes to discuss.
“They’re tasked with following the portfolio on a day-to-day basis and reporting back to me,” says Horstmeyer. “I think it’s a really good career opportunity, having actual practical experience picking stocks, forming a portfolio, and having consequences behind it is really important.”
In the future, the Student Management Investment Fund might be extended to the MBA program. Horstmeyer hopes that in a few years, they could create an international fund with companies from around the world. He credits Board of Trustee members and School of Business alumni Trevor Montano, BS Accounting ’00, and JP Phaup, MBA ’91, with supporting and launching the fund.
Montano worked with alumnus Brandon Nestor, BS Finance ’17, to develop the fund at Mason starting in fall 2016.
“I work in the finance industry and have interviewed both undergraduate and MBA students seeking jobs on Wall Street for the better part of the past 15 years,” says Montano. “In my experience, the single biggest differentiator among young finance candidates is hands-on experience, much of which has been gained through summer internships and participation in a student managed investment fund.”
Phaup, BOT chairman of the investment committee, agrees that it was essential for Mason finance students to participate in a student managed investment fund.
“Without a doubt, students that had experience in their student managed investment funds were universally more attractive for an employer. It gives the students some legitimate, meaningful experience that is good for their resume and future. That’s confirmed by the students’ comments that the experience at Mason was one of the most significant,” says Phaup.
Phaup is impressed by the quality and thoroughness of the Student Managed Investment Fund presentations to the board. He hopes the fund will encourage prospective finance students to attend Mason.
Justin Boileau, president of the fund’s risk committee, and Khalid Al-Masri, president of the fund’s investment committee, led the fund for the spring 2019 semester. Boileau says his main responsibilities included identifying downsides in holdings and guiding vice presidents of the committee who might serve as president in the future. Al-Masri’s main responsibilities included devising the economic outlook and the future of the portfolio. The two committees work together on the annual report and presentation to the board.
Boileau says that having real money on the line has made the experience an invaluable learning opportunity. “It was the only class that provided real-world experience in security analysis and portfolio management. It allows me to utilize all of the knowledge I’ve obtained in finance, and there’s a level of day-to-day learning outside of the class that you have to do, which I really enjoy,” he says.
Al-Masri describes Mason’s Student Managed Investment Fund as a continuous learning phase. “It’s a very hands-on experience. There’s a lot of discretion involved, and as students, we were given a lot of opportunities to put ourselves out there. This is our work and we’re presenting ourselves through our work,” says Al-Masri. “We have almost $250,000, and we have a responsibility to make sure we’re really giving our due diligence at every point.”