December 07, 2016, BY Matthew Beltz

In late August, a group of new investment managers were discussing what to do with 100 shares of Google stock in their portfolio.

They could sell them and net a profit of nearly $270 per share, or hold them and sell call options — agreements that give investors the right to buy securities at a specified price within a defined time period — which would reduce the risk of holding the stocks should the price go down and bring in immediate income that they could invest in another part of the fund's portfolio.

The group chose the latter, but not until after exchanging many questions and opinions about subjects ranging from general investment concepts to specific information about Google. For these new managers, the two-hour discussion served as an eye-opening experience about the level of knowledge, detail and research it takes to operate an investment fund.

Where did this scene play out? Not on Wall Street, but inside a classroom at Bucknell University between students in the Student Managed Investment Fund (SMIF), a two-semester capstone experience for a select group of undergraduate students — usually 16 to 24 per year — that manages about $1.6 million of the University's endowment, an amount that has grown from an original corpus of $200,000 over the last 16 years. While several other universities have funds that students manage, Bucknell is one of only a few institutions that lets undergraduates manage part of the endowment.

Bucknell students completely take ownership of the fund, an experience that in many ways mirrors that of a professional investment fund manager (visit the student-run blog that details various SMIF activities). Over the course of the academic year, each student must present a specific stock or other security to the class, with the purpose of convincing the group to purchase shares. It was through this process that the fund acquired the aforementioned shares of Google.

"Going through the process of writing a comprehensive stock pitch and getting in front of a room, defending it to your peers and handling their questions puts you far ahead of other applicants out of school applying for finance jobs," said Katrina Schmaltz '10, an accounting major who is a portfolio consultant at BlackRock.

SMIF Co-director Frank Schreiner '83 borrowed a term from famed investor Warren Buffett to describe the instructors' role in managing the fund, saying they delegate the portfolio to the students "to the point of abdication."

Professor Curtis Nicholls, management, speaks with Amy Caporale '17 in the Moriarty Investment Center in Taylor Hall. Photo by Brett Simpson


Both Annie Dean '11 and Emily Dafilou '16 share Schmaltz's opinion that their SMIF experience was instrumental in giving them an edge during the initial part of their careers.

"The SMIF was the best academic decision I made at Bucknell," said Dean, who majored in management and is an associate at Korn/Ferry International.  "It really helped me with presentation skills, teamwork, collaboration and accountability. It was very helpful in getting my first job after college as a rotational analyst at KBW."

"My SMIF experiences gave me a lot to talk about in interviews, which helped single me out from other candidates," said Dafilou, who graduated with a degree in accounting & financial management and works on a wealth management team at Merrill Lynch.

"It is very unique and has so many opportunities. I also think the alumni base makes our SMIF much stronger," added Dafilou, referring to the many seasoned alumni that visit the SMIF class throughout the year to present on a variety of topics.

Other highlights of the course include an annual presentation about the fund to the Bucknell Board of Trustees and a trip to New York to meet and network with Bucknell alumni in the financial services industry.

"One of the best things about it is the built-in, direct exposure to successful and supportive alumni, who come from all different corners of finance," said Schmaltz. "That helped me understand how broad the field could be and also the reach of the Bucknell network."

Two Bucknellians have hired Schmaltz over the course of her career. One of them was Schreiner, who estimates that he hired 10 to 12 SMIF students before recently retiring as a managing director at BlackRock. He returned to Bucknell last year as a professor and the Howard I. Scott Executive-in-Residence, and now co-directs the SMIF with Professor Curtis Nicholls, management. They succeeded Professors David Jensen and Robert Needham, management, who founded the course in 2000 and taught it for 16 years.

Tooba Ali '17 speaks with Quinn Flaks '17 in the Moriarty Investment Center in Taylor Hall as Tristan Yapalatar '17 and Austin Marcus '17 talk in the background. Photo by Brett Simpson


"One of the biggest reasons the SMIF has been so successful is because David and Robert poured their hearts and souls into it and built a lot of relationships with individuals in the financial services industry," said Nicholls.

"Our alumni have been very generous with their time as well as contributing to the SMIF's operating budget," said Schreiner. "We've also been fortunate that many alumni are well placed in the financial services industry and have been great at hiring former SMIF students or helping them find jobs."

One such graduate is Joe Quintilian '03, who recently co-founded Etherindex, a digital currency company, and co-founded Axiom Markets with two other partners in 2005. While he hasn't directly hired any Bucknell SMIF graduates due to the small size of his firms, he and SMIF alumni at other companies have helped place several Bucknell alumni in financial services industry positions.

"We've helped several Bucknell and SMIF graduates obtain jobs at Goldman Sachs and other firms," said Quintilian. "The alumni that come back and stay involved are probably one of the biggest things that differentiates the Bucknell SMIF from others. This has helped create a number of careers for people on Wall Street that wouldn't have happened otherwise. Bucknell changed my life, so I enjoy giving back and helping influence other people's lives as well."

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