Laker Asset Management club making gains for university
Student-run investment fund focuses on social, academic, fnancial goals
It’s a given: every Mercyhurst University student will have a hands-on learning experience before graduating. Depending upon their majors, students have delivered intelligence briefngs to national security leaders, designed custom spaces for local social service agencies, prepared and delivered a weekly dining series, conducted public opinion polls, and more. Why, posited Mercyhurst Trustee Desmond McDonald, shouldn’t business students interested in careers in investment management learn to invest – not just book- learn the concepts, but manage actual dollars? Such marked the genesis of a student-directed investment fund known as Laker Asset Management (LAM), which began two years ago at the urging of McDonald and Mercyhurst President Michael T. Victor, with support from Vice President for Finance & Administration David Myron. The Board of Trustees followed with an allocation of $100,000 from the university’s endowment committee, which McDonald chairs. McDonald believes that giving students the ability to make real-life decisions is an extraordinary utility, and an experience that you simply do not get from curriculum or from professors. But what happens when you blend tens of thousands of dollars, the stock market, and college students? In LAM’s case, profts. At least so far. Club president Adrian Larsen, a senior from Denmark majoring in international business, fnance and economics, said the group has done well.
Approximately 20 current members screen companies that match their investment fund’s criteria and carry out the due diligence to support their intended investment, all the while being guided by Mercyhurst business professor Mark Simpson, who is a certifed public accountant and a certifed fnancial planner. This past year, students identifed themes to guide their investment strategy, one being the nation’s aging population. Their research led them to invest in real estate developments for the elderly and in drug distributors. Their latest theme is “Green,” which has sparked research into companies working in the feld of solar energy and other sustainability initiatives. LAM members meet weekly. Membership spans those aspiring to careers within the industry to those simply eager to learn about fnancial markets. Simpson spends part of the time teaching; the rest is spent with students leading discussions about the market’s performance that particular week, the latest news from the Fed, external factors infuencing the market, and investment ideas. For Larsen, it is an opportunity to network and socialize with like-minded students as much as it is a learning experience and an opportunity to make money for the university. He said 20 regulars attend the weekly meetings, but another 30 or so attend on occasion. “I think we really have expanded our reach and that was our intention – to create an environment where ambitious students could network and challenge each other,” he said. Larsen came to Mercyhurst as a golf recruit to pursue a childhood dream of playing sports at a higher level, but elbow injuries have taken a toll. Despite the demands of three majors, he still craved a vehicle by which to channel his focus and energy.
Trustee Des McDonald, Adrian Larsen
And that’s what gives McDonald confdence. “The students have been great,” he said. “They set up their own internal processes, chose areas to invest in, and rules by which they invest. Their handling and their returns have given me the assurance that I’m not going to wake up some day and say, ‘Wow, we just took a terrible bath.’” On the contrary, the board voted this year to give LAM another $100,000 to invest. Though the fund has been succeeding, McDonald said even if it loses a little, there are lessons with each mistake, and investors have to constantly be learning, adapting and withstanding discouragement. And, to McDonald, learning is key. Not only are the students learning how to invest in fnancial markets, but they are also gaining intangible skill sets, such as good decision-making and management. Simpson agreed. For these students, asset management goes way beyond academic theory. From a resume standpoint, students are working with actual dollars and that denotes a certain level of acumen and responsibility. Plus, they maintain a robust website at lakerasset.com where they share their research and portfolio. They also deliver a quarterly report to McDonald and members of the university’s endowment committee. With this year’s additional allocation, Simpson said LAM intends to take a new approach. “Our plan is to divide students into three or four groups and give them $15,000,” he said. “Each group will research and invest in three companies. The logic behind it is that they will be competing and learning and having fun, but as portfolio managers, they will also be diversifying and limiting risk.”
“We outperformed our benchmark, the S&P 500, by 2.04% in our frst year,” he said.
Larsen is one of four students who founded LAM and helped craft its charter and establish its guidelines. The others – Bernardo Ramirez, Grant Coultrup, and Jeremy Wu – have since gone on to successful business careers.
LAM ft the bill. “It’s the one thing I really have to push myself at,” he said.
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