By William Rindfuss, executive director of strategic programs and Lecturer, Haas Finance Group
They executed back-tests instead of back-flips, sought “alpha” instead of fame, and competed in suits rather than… what they wear on that show.
MBA teams in the Haas Investment Fund course pitched their investment strategies to a panel of judges on May 6th, competing for allocations of capital from a dedicated fund that the teams will now use to execute those strategies. HIF is the finance experiential learning course in the Innovative Leader curriculum, in which students explore their own areas of unique insight, anticipate catalysts for change in those areas, and train on portfolio analytics tools -- all to develop unique investment strategies. In working as members of teams they also develop the capabilities of framing problems and opportunities, experimenting to learn, managing complexity and uncertainty, and influencing beyond authority.
The three judges -- including a hedge fund manager and a former chief investment officer and with two Berkeley MBAs and two PhDs among them -- were a bit unnerving before the competition but then wholly inspiring during the presentations. Feedback was equal parts praise and constructive suggestions, with a particular focus on prospects for achieving true "alpha" -- or market-beating returns -- through the strategies, while closely evaluating and managing risk.
Team Blue pitched a multi-manager strategy that capitalizes on areas of experience and insight among the teammates, identifying potential price catalysts through fundamental analysis and selecting a portfolio of under-covered small-cap stocks. Team Gold focused on the semiconductor and biotech spaces, gearing buy/sell decisions off an aggregator of mentions in online media -- following extensive testing of this data.
One member of Team Blue who found it "extremely valuable to be in a professional setting pitching our investment ideas," said the feedback was "concrete and actionable, and will definitely make our portfolio perform better over the next six months."
A member of Team Gold added that it was "invaluable that the judges had direct experience with our specific type of strategy and could pass lessons on to us."
In the end, the judges admired both strategies almost equally, and allocated the fund 55/45 between the two teams. After some adjustments based on the insights and suggestions of the judges, the teams will implement their strategies starting this month and will continue to monitor and manage their positions until December. The three judges were Minder Cheng, MBA 89, PhD 94, a former chief investment officer at BlackRock; Joel Drescher, MBA 05, co-head of equities and a portfolio manager at Symphony Asset Management; and Stephen Malinak, global head of investor analytics at Thomson Reuters.
This one-year, three-unit course is cross-listed between the Full-time and Evening & Weekend MBA Programs and is led this year by Finance faculty member Bill Rindfuss.