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W&L Board of Trustees Gives Additional $3 Million to Williams Investment Society

The Investment Committee of Washington and Lee University’s Board of Trustees has announced that it will give an additional $3 million to W&L’s Williams Investment Society (WIS), bringing the student-managed portion of W&L’s endowment to more than $5 million.

Based in W&L’s Williams School of Commerce, Economics, and Politics, WIS is a student-run organization that has managed a portion of W&L’s endowment in equity securities since its inception in 1998. Members are divided into nine industry groups designed to mirror the S&P 500.

“The Board approved the additional funds owing to the excellent track record of WIS and the fact that WIS participation has become a vital and differentiating factor for our student body,” said Sarah Nash Sylvester from New York, N.Y., chair of the investment committee and the parent of W&L graduates Alex Appel ’06 and Lizzy Appel ’08.

“Our students are exceptional, and their WIS experience serves to strengthen and enrich their education. We are delighted to acknowledge WIS’ contribution to W&L’s endowment performance in the past years, as well as the faculty support and insight they continue to benefit from. Going forward, the Investment Committee will work more closely with WIS through our advisor and investment manager, Makena Capital, who will assist WIS in thinking through asset allocation issues,” she said.

The announcement followed a presentation to the trustees by the three new directors of WIS, all juniors: Sarah Beth Hampton, executive director of WIS and a business administration and economics double major; Cameron Dabir, associate director for WIS, industry head for healthcare and an accounting and business administration major; and Bayan Misaghi, associate director for WIS and a triple major in business administration, economics and biology.

“I think we were all surprised by the magnitude of the amount,” said Hampton. “We’re also very excited, even though it means putting in some extra work this semester.”

“It’s pretty cool that the trustees, who are very influential both at W&L and in their careers, entrusted us with an extra $3 million of the school’s endowment,” added Dabir.

According to Hampton, the extra money will not affect the society’s strategy of having a well-diversified and strong portfolio. However, it will enable the society to strengthen its diversification and match its industry weightings more closely to those of the S&P 500.

WIS currently has approximately 44 holdings in its portfolio, and Hampton anticipates increasing that by one or two.

“Generally, portfolio theory tells us that once we have between 15 and 20 stocks we’re pretty well diversified because we already are broken up by industry. Within each industry we have four or five stocks,” said Hampton. “So while we don’t think it’s a good idea to add to the number of holdings, we will increase the size of some of them.”

One of the advantages that WIS brings to the management of W&L’s endowment is its lack of fees.

“Whenever we make a trade, it costs $10, so the money the trustees are giving us is pretty much preserved because we’re not taking a percentage fee,” said Misaghi. “WIS is really an incentive for us to keep our eyes on the market and have a great learning experience. But the additional money does add more gravitas to what we’re doing.”

Once a semester, each of the nine industry groups in WIS defends its research on equity that the group thinks is worth buying or selling. The 10 voting members of WIS then decide which shares to hold, buy or sell.

“This is a group of students that takes this very seriously,” said Hampton, “and I’m already seeing people working on their presentations and wanting to discuss them with me four weeks before they are due. The amount of time people put into these presentations is extensive, so I’m very glad that the group as a whole is being recognized for the work it does. It’s not that people do it for the recognition, it’s because they care about how we’re investing the school’s endowment money and want to do well.”

The learning experience is equally important to the students.

“Truly, we do learn so much and now it’s so much more intense because we’re managing an additional $3 million,” said Dabir. “It puts that much more emphasis on performing your job well, learning that much more, and that translates into not only running WIS well, but also to careers after graduation.”