Stocking Up

Members of Barry’s Student Managed Investment Fund learn about world financial markets while giving back to the community.

By Dmitry Rashnitsov

In 2010, during one of the most tumultuous periods for global stock markets, two students from Barry University’s Andreas School of Business (ASB) proposed an initiative which seemed like somewhat of a risky venture. In short: a student-run program that managed thousands of real dollars in real markets.

Fast forward a couple of years and the Student Managed Investment Fund (SMIF) is a successful educational program. Students are buying real stocks, bonds and securities in markets all over the world while learning how to value financial assets. Although the program is still fairly new, students who are involved are honing their portfolio management skills and giving back to the community by working with local high schools and teaching finance principles to local students. The program even has plans to set up small scholarships as part of its earning allocation plan.

SMIF co-founders Raul Ballester ’11 and Sean Cooney ’12 knew that they were taking on a large project on top of their coursework but were determined to make it work. “We really wanted to leave our mark on Barry and give back to the future generations of students,” Ballester explained. “We also wanted the project to contribute toward shortening the ‘knowing-doing’ gap by getting the students to practice what they learned in the classroom and gain real-world experience at the same time,” Cooney said.

To gain some traction, the duo garnered support from several faculty members and put together a proposal, before pitching the idea to ASB dean Dr. Tomislav Mandakovic. “After listening to their proposal, we were convinced they were on to something, and we were excited to share it with our colleagues and [Barry University’s] Executive Committee,” Mandakovic said.

With ASB’s support, Ballester and Cooney presented the idea to the Executive Committee and eventually to the University’s Board of Trustees for approval. Two board members in particular, Michael O’Neil and John Bussell, championed the project and not only got it approved, but also decided to allocate $50,000 of the University endowment for the group to begin investing immediately.

Once the SMIF was established, Cooney and Ballester began advertising the program to ASB students, initially recruiting 20 general members to conduct research, analyze market data and create investment proposals. To ensure the program’s continuity, Barry’s Vice President for Business and Finance Bruce Edwards and Mandakovic were appointed to the SMIF board, while ?Dr. Stephen Morrell, professor of economics and finance, became the group’s faculty advisor.

“Everyone in the program is more keenly aware of the types of events that can move stock markets all over the world,” Morrell said. “It’s like starting a business. The students get an incredible amount of valuable and useful experience that just can’t be taught from a textbook.”

As the program begins its second year, students participating in SMIF meet once a week to discuss the current portfolio mix, vote on buy/ hold/sell decisions and execute investment strategies. These exercises help them develop a deeper understanding of capital markets and security analysis. The program is open to both undergraduate and graduate students from all majors at Barry.

This year, 36 students with the help of 16 mentors are buying and selling stocks and bonds while managing the growth of the portfolio and giving back to the community through lectures on financial proficiency and responsibility.

Students participating in SMIF can take on a role of general member/analyst or fund manager in different sectors, which include: Consumer Discretionary & Consumer Staples, Energy & Finance, Health Care & Industrials and Technology & Telecommunication Services and Fixed Income. Some SMIF members also take on operational duties to ensure the program continues to grow and improve. Although the student group has decision-making authority — with guidance from the faculty advisor — on investments, all major programmatic decisions, such as earnings allocation, are vetted and approved by the advisory board, which consists of alumni, faculty, administration, trustees and local business community leaders.

“Being part of SMIF has been one of the best experiences I have had at Barry,” said 2012-2013 SMIF President Fernando Araujo Simoes, an MBA student scheduled to graduate this spring. ?“It truly gives you the opportunity to manage a real investment portfolio and develop the type of leadership and teamwork skills that are very important if you want to succeed in the business world. I think this will definitely set me apart from the rest of the applicants in my future career.”

The SMIF’s short-term focus is to meet its benchmarks and grow its portfolio methodically. The long-term plan is to grow the fund to a size that would allow the group to not only reinvest, but also allocate a portion of its earnings to fund scholarships, community service projects, and educational events beyond the classroom, such as national competitions.

In 2012, the SMIF added a community service component as a requirement for membership. Twice a month, SMIF members give presentations about personal finance at William H. Turner Technical Arts High School, a charter school located on the Miami Central High School campus, about two miles west of Barry.

“We are talking to the students about beginning to build their credit scores, making sure they don’t get mired down in debt, the power of saving their money, basic financial activities such as balancing a checkbook, showing them their options for paying for college, introducing the Free Application for Federal Student Aid (FAFSA) and other things along these lines,” said finance major Wesley Burns, who serves as SMIF’s head of community service. “These simple topics have generated an enormous amount of questions from the students; we really struck a nerve.”

In addition to gaining valuable investment experience, SMIF students also get invaluable face time with leading professionals in the financial industry by working closely with the advisory board. Alumni such as Christopher S. Neill ’95 are thrilled to share their wealth of experience in a highly competitive profession that thrives on risks, rewards, innovative thinking and correctly predicting the future.

“It’s great practical experience and an introduction into the workforce that they can put on their résumés,” said Neill, who serves as the director of institutional relations at Thomas White International, LTD, a boutique investment management firm based in Chicago. “The advisory board looks over the portfolio about once every quarter and points out things that the fund managers might not have even thought about.”

Student managed investment funds are common in some business schools around the country; however, most schools utilize software simulations. The fact that Barry University’s SMIF program manages real money places it among a group of select few consisting of top-tier institutions.

Today, Cooney and Ballester each work in finance and credit the education they received at Barry, as well as the experience of starting up the SMIF, as key to launching their careers. Cooney is an energy investment banking analyst at Dundee Capital Markets in Canada, while Ballester is a property transfer specialist at Chevron Corp. in Houston. They both serve on the SMIF’s advisory board.

“My experience at Barry and with creating the SMIF has allowed me to compete with individuals from top-tier educational institutions. It’s all about applying yourself and making the most of your education,” Ballester said.

Cooney agreed and emphasized the value to his own education. “The experience of getting the program moving from idea to proposal to execution was amazing. I learned a lot just from that exercise alone,” he said.

Mandakovic, ASB dean, also sees the project as a valuable asset that can attract high-level individuals to pursue their studies at ASB.

“The partnership between our expert faculty and members of the local finance community ensures that students acquire expertise in designing solid investment strategies,” he said. “The SMIF project is truly a collaborative program that enhances student knowledge and enriches the South Florida talent pool..

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