During the second year of their MBA studies, ASAP students manage various portfolios and operate the investment firm. They have research and administrative duties within the firm. Students are divided into teams, manage about $50 million, have no safety net, and report to clients.
Students are divided into three portfolio teams: two that manage equity portfolios, and a third that manages fixed income portfolios. While students have primary responsibilities in their assigned asset class, they are encouraged to conduct research in other areas as well.
Within the asset class teams, students are assigned research responsibilities (sector coverage duties) and duties related to operating the investment firm (e.g. trading, accounting, risk management, asset allocation, etc.). Students are responsible for conducting rigorous company and sector research, making recommendations on the composition of the portfolio, and being active participants in the team decision making process. Throughout the year, the teams meet multiple times each week, often with faculty and also with the many investment professionals who serve as guest speakers for the program. The students spend substantial time in the Hawk Center.
Students manage over $50 million. The funds include fixed-income assets and equities portfolios. Managing multiple asset classes provides our students with uncommon exposure to a variety of areas of the market and investment techniques. Given the size of the assets, the students have a large responsibility to perform well.
No Safety Net
The flexibility afforded to the students is a unique aspect of the program.
Students maintain flexibility and independence over all investment decisions, subject to constraints on portfolio characteristics and overall portfolio risk. Students do not have a “safety net” as they walk the tightrope of active portfolio management. Each year, the teams inherit, learn and refine investment processes. The students must deliver performance that meets or exceeds the clients’ expectations in a multi-manager environment.
The UW System is the client for the fixed income portfolios. The ASAP Board of Advisors serves as the client for the equity portfolios and also provides oversight for the fixed income portfolios. The Board is comprised primarily of alumni, all of whom hold active leadership positions in the investment community. Although the alumni are very supportive of the program, Advisory Board members take seriously their charge to challenge students and create the environment and experience of the most demanding client-manager relationship.
In September of each academic year, the students determine the firm’s organizational structure, economic outlook, investment philosophy, and the disciplined strategy that will be executed throughout the year. The teams present their portfolio management proposal to the ASAP Advisory Board for approval and subsequent release of funds.
The students prepare two additional presentations to the Board, one mid-year and one at the end of the academic year.