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Student-Managed Investment Fund Gets $4.5 Million Infusion, Recognizing Strong Returns

— by on April 16th, 2015

Washington and Lee University’s Investment Committee recently voted to turn over the management of an additional $4.5 million of endowment funds to the Williams Investment Society, a student-managed investment fund.

The Williams Investment Society now manages some $10.25 million of the university’s endowment, making it one of the largest student-managed investment funds in the United States and the largest of any liberal arts college.

“WIS and the Board of Trustees have provided a wonderful educational opportunity for students through this form of experiential learning,” said Larry Peppers, Crawford Family Dean of W&L’s Williams School of Commerce, Economics and Politics.

The society was founded in 1998 with the allocation of $1 million of the university’s endowment to the student-run group. In a decade and a half, by investing in equities securities, it doubled W&L’s money. In 2014, the Investment Committee allocated an additional $3 million to management by the students.

Since April 2014, the group’s investments had earned an additional $750,000, bringing its total managed assets to $5.6 million. As a response to the consistently high rate of return, the board allocated an additional $4.5 million of endowment funding.

The student fund’s portfolio covers nine sectors: basic materials, consumer discretionary, consumer staples, energy, financials, healthcare, industrials, technology, and utilities and telecommunications. Members are assigned to a sector and do extensive research on both the sector and individual companies within it.

At meetings, which take place during lunch hours, the student members give presentations on stocks they believe the society should buy or sell, and the group votes. The society has a policy that it will not hold more than five percent of its portfolio in a single stock.

The society currently owns more than 40 stocks. Top holdings include The Walt Disney Co., Gilead Sciences, Visa Inc., Zimmer Holdings and Pfizer Inc. The average size of a single stock position is more than $160,000.

Because membership in the Williams Investment Society is limited to 40 members, admission is extremely competitive. First-year students are rarely accepted, and each year only a quarter of applicants are accepted. Experience shows the benefits of membership are significant — student members get real-world investing experience and the opportunity to network with alumni in the finance industry. Most students who participate are recruited for Wall Street jobs before graduation.

Close to 300 universities in the United States have student-run investment funds. In 2009, the median value of student-managed funds was $460,000, according to a study in the academic journal Business Education & Accreditation. In a 2007 survey of 289 schools with student-managed investment funds, only six managed more than $10 million, and all were at large research universities, such as Ohio State and Minnesota. Washington and Lee, by contrast, has an undergraduate enrollment of approximately 1,800 students and no graduate business program.

The Williams Investment Society is advised by business administration professor Adam Schwartz. This year, the group is led by three seniors, executive director James Emanuelson of Dallas, Texas, and director Kiril Krendov of Sofia, Bulgaria, and Brian Krouskos of Alpharetta, Georgia. The three will work as interns this summer at Goldman Sachs, Deutsche Bank and JP Morgan, respectively.

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