Mayer Fund Appears on CNBC

The Smith School received national attention January 23 when members of the school's Mayer Fund appeared on CNBC's Power Lunch. The MBA students, who manage the fund to gain "real world" experience, were interviewed on the nationally televised program during a two-day field trip to New York City. Students Suzanne Pardue, one of the fund's three portfolio managers, and Will Thorpe, a technology analyst, spoke for the group during the live, six-minute interview, while the other fund members appeared behind them.

CNBC host Bill Griffeth peppered Pardue and Thorpe with questions about the Mayer Fund and the group's recent stock picks. Griffeth seemed particularly impressed that the Mayer Fund, which has nearly $1 million in assets, outpaced the S&P 500 and the Dow during the fourth quarter of 2001. Pardue and Thorpe attributed the quarter's growth - more than 12% - to such stock picks as Liz Claiborne Inc.

"They're a strong brand name through their Liz Claiborne brand as well as Villager and Crazy Horse. They've been very successful in diversifying their product offerings through acquisitions, particularly in the non-apparel wholesale arena," Pardue told CNBC viewers.

The students were also asked about their stock picks in the troubled technology sector.

"When we purchased IBM, we were impressed with the strength of the management team overall - the depth of the management team - as well as the fact that in these tough times in the technology sector, this is a large company that can weather any downturn," Thorpe noted.

The CNBC appearance was just one stop for the MBA students who were in New York primarily to meet with Smith School alumni and others working on Wall Street as portfolio analysts, fund managers, and investment bankers. The annual field trip to New York is part of the Mayer Fund program, which was established in 1993 under the guidance of then-dean William Mayer. Initially called the Terrapin Fund, the student-managed portfolio was re-named in 1999 in recognition of Dean Mayer's commitment and contributions to the fund.b

The fund started with a $250,000 contribution from the College of Business and Management Foundation and has grown through outside contributions and favorable returns. Each year, it is managed by a new group of second-year MBA students selected by their predecessors. In addition to Pardue and Thorpe, this year's fund members include Mike Daley, Tim Devlin, Chris Dochat, Jason Glass, Keith Horrigan, Kevin Mason, Irina Smirnova McCreadie, Marlene McNamee, Marci Mutti, and Andrew Widman.

The goal of the Mayer Fund is to achieve capital appreciation by capturing superior returns that equity investments have historically provided. The fund's long-term performance goal is to outpace the appreciation of the S&P 500. The struggling economy has given this year's managers an especially challenging task - along with a great opportunity to learn.

"Throughout most of the 1990s, asset allocation was far more important than security selection. Now, fund managers must be good at asset allocation and security selection," says faculty advisor Meg VanDeWeghe. "Not all stocks will do well. This means that there needs to be a return to good old-fashioned fundamental analysis."

It appears these MBA students are mastering that good old-fashioned analysis - and drawing attention to the strengths of the Smith School MBA program along the way.