|
 Impressive.
After hearing about my classmates' recent trip to New York
City, and their appearance on CNBC's Power Lunch on January
23 rd , I was curious to find out exactly what the members
of the Mayer Fund do - so I looked into the activities pursued
by the team, and posed a number of questions to the members.
"Impressive" is the word I would use to describe
the efforts put forth by my classmates in their endeavor to
apply their business education to real-life financial decisions,
which duly affect the growth of the student-managed portfolio.
As described on its website (www.rhsmith.umd.edu/mayerfund),
the Mayer Fund "is run by a select group of second-year
MBA students who comprise a management team of three portfolio
managers, nine equity analysts, a technology specialist, and
a marketing specialist." The members include:
Mike Daley - Equity Analyst, Consumer Staples
Tim Devlin - Equity Analyst, Financials
Chris Dochat - Equity Analyst, Technology
Jason Glass - Equity Analyst, Energy and Utilities
Keith Horrigan - Equity Analyst, Telecommunications
Kevin Mason - Equity Analyst, Industrials and Materials
Marlene McNamee - Equity Analyst, Consumer Discretionary
Marci Mutti - Equity Analyst, Health Care
Suzanne Pardue - Portfolio Manager
Will Thorpe - Equity Analyst, Technology
Irina Smirnova McCreadie - Portfolio Manager
Andrew Widman - Portfolio Manager
Meg VanDeWeghe, who is a Distinguished Executive in Residence
and Adjunct Professor of Finance, serves as the faculty advisor
to the Mayer Fund, fulfilling the role of teaching the students
how to apply portfolio management skills and security analysis
skills in managing the fund. Ms. VanDeWeghe must also approve
any transaction the students want to make.
The stated goal of the Mayer Fund is "to achieve capital
appreciation by capturing the 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 on a risk-adjusted basis. Although the primary goal of
the fund is to achieve capital appreciation, it is just as
important that each of its members learns the processes by
which investment decisions are made in a professional asset
management setting." (www.rhsmith.umd.edu/mayerfund/).
 CNBC
host Bill Griffeth noted during the televised interview with
the Mayer Fund members 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. Suzanne Pardue and Will
Thorpe who served as spokespersons, mentioned that the growth
(more than 12%) of the Fund was attributed to certain stock
picks the members made. To the outsider, it may not be apparent
just how much effort the students put into fulfilling their
duties. It became quite clear after talking to some of the
members that, despite it fulfilling a course requirement,
many hours are spent analyzing their respective sectors in
order to make sound financial decisions.
In addition to inquiring into the workload, I was also curious
to learn about why the members were interested in being a
part of the Mayer Fund, and what they've gotten out of their
involvement with it. Following are the responses given by
Marlene McNamee (MM), Will Thorpe (WT), Kevin Mason (KM),
and Andrew Widman (AM):
Q: What prompted your interest in being involved with
the Mayer Fund?
MM: My interest in the Mayer Fund was initiated primarily
because of my interest in working on Wall Street after graduation.
I needed to learn the hands-on skills of Equity Analysis to
make myself a more viable candidate during the job search.
WT: One of the reasons that I chose Maryland for my
MBA was because of the Mayer Fund opportunity. Only a few
MBA programs provide students the opportunity to manage a
real fund. Also, as a career changer, I wanted to give myself
every opportunity to differentiate myself in the job market.
Q: What have been some of the challenges involved?
MM: The largest challenge is getting up to speed with
the Equity Markets. The time and effort required to learn
the details about the overall market, the individual sectors
and each individual stock pick is tremendous. Feeling comfortable
about any recommendation (Buy, Hold or Sell) requires financial
analysis (preparing the Discounted Cash Flow reports), as
well as a qualitative analysis of a company.
WT: The main challenge is to learn how to analyze
a company in the same manner as a Wall Street analyst. Mayer
Fund members are held to a very high standard.
KM: Time. My first half of the year was marked with
many a night learning about my sectors. Additionally, perfecting
my equity models was very time consuming. I spent more time
on the Mayer Fund than I did any of my other classes.
Q: What kind of time commitment is requited to be a member?
MM: There is a weekly time commitment to be "prepared"
to discuss our sector and our stocks. In addition, each report
(a minimum of four a year) can range from 20-40 hours of work
in total.
KM: The time requirement cannot be underestimated.
You need to get moving as soon as you know your sector assignment(s).
That means beginning in the spring and learning throughout
the summer. I cover the industrial and materials sector. My
background is in the financial sector. In order to be as up-to-date
as possible, I spent many [nights] reading on the basics of
my sectors and building my overall view of my stocks and their
industries. I need to understand the markets and be ready
to defend a stock if the fundamentals are correct. This has
already happened twice in my time with the fund. The time
I spent on the background of the industry plus my understanding
of the fundamental value of the firm were critical in how
we reacted to news that was hurting our stock price. Both
times, I understood the fundamentals to be strong and saw
buying opportunities for the fund.Time will tell, but we are
currently above our purchase price on both stocks. That makes
all the commitment worth-while.
Q: What have you learned?
MM: I've learned that the market success from 1998-2000
allowed many of us to invest without much analysis and still
reap some rewards. This current bear market has taught the
average investor that, once again, it takes fundamental analysis
and a rational time horizon to make a substantial return on
our investments.
WT: As a member of the Mayer Fund I have bridged the
gap between the classroom and the real world in terms of what
an equity analyst actually does.
Q: Any other commentary you'd like to share with us…
MM: The Mayer Fund has been the single most rewarding
academic experience at Smith. Because of the very small class
size and dedication of the overall group, I've been able to
appreciate each member's strengths and attributes that he/she
brings to the Fund. It's been a team-building exercise as
well as an academic experience. This is experiential learning
taken to its highest form.
WT: There is no better way to prepare for a career
on Wall Street or elsewhere in the finance community.
Q: How has the Mayer Fund strengthened the student-alumni
network on Wall Street?
WT: Each year, Smith students get jobs on Wall Street
and many of these students are Mayer Fund alums. As Maryland
establishes more of a presence in New York, it makes the job-hunting
process easier for future graduates. [It was noted that after
their trip to CNBC, the group met with four other industry
professionals, including a hedge fund manager, a research
analyst, a portfolio manager and a managing director from
an investment bank. Such interaction is advantageous for both
the students and the Smith School, providing excellent exposure
and building a reputation for financial excellence at the
school.
Q: What other schools have programs similar to the Mayer
Fund?
AM: There is no way for us to know exactly how many
others there are. We identified Cornell, Wisconsin, and Texas
as having prominent applied asset management programs. We
also determined that, more so than some other programs, the
Mayer Fund is highly autonomous in its operations, including
portfolio allocation and security selection. The Mayer Fund
is an excellent example of experiential learning found at
the Smith School - a differentiating factor that will serve
to boost the overall reputation of the school. It is, in fact,
a model of how the business world and anMBA education can
be integrated to enhance classroom learning. Impressive. For
detailed information on the Mayer Fund Investment Philosophy,
please visit www.rhsmith.umd.edu/mayerfund/new%20web/pages/about.htm;
on the Portfolio Performance,www.rhsmith.umd.edu/mayerfund/new%20web/pages/about.htm;
and on the Fund members,www.rhsmith.umd.edu/mayerfund/new%20web/pages/members.htm.
Special thanks to Marlene McNamee, Will Thorpe, Kevin
Mason, Andrew Widman, and Meg VanDeWeghe for their input.
|
