Fifteen years and $370,000 have a way of quelling uncertainty.
The university’s investment of $250,000 to start the Bentley Investment Group (BIG) has blossomed into $621,727 as of January 2013. Indeed, over its lifespan, BIG has convincingly outperformed its benchmark, with an average annualized growth rate of 8.2 percent as compared to 6.1 percent for the S&P 500.
“It’s nice to see a bunch of 18- to 22-year-olds beating the index over that period of time,” says Robert Adinolfi ’98, a former Finance major and founding member of the group. The alumnus is now a real estate development executive with New Jersey-based Renaissance Properties. “What a great legacy to leave behind. It speaks to the quality of the university’s program that students have been able to maintain that level of performance.”
All-Around Gains
There are other university-sponsored, student-run investment groups with similarly successful records. The BIG difference is inclusiveness: Any Bentley student, regardless of major, can join.
“Most other schools tie participation in their fund to class work or a specific major,” explains Dan Stroller ’13, the group’s democratically elected president for 2012-2013. “At Bentley, any undergraduate is eligible to participate. Grad students can participate too, but can’t Vote or act as an analyst or team leader.”
Several hundred students per year are involved in the fund’s administration. Weekly meetings draw between 100 and 150 attendees, who are organized into sector teams such as finance, technology and energy. Each team has a leader and a group of research analysts. The teams get together weekly to review and vote on investment decisions, much the way a typical mutual fund portfolio would be organized.
Reality Check
As research director of BIG, Economics–Finance major Bill Ledley ’13 leads training sessions on how to evaluate stocks using the three methods that equity analysts generally employ: price-earnings ratios, transaction comparables, and discounted cash flows.
“What I want to see is students being serious and passionate about investing,” he says. “For me, the best thing about BIG is that we take the theories we’ve been learning in the classroom and apply them to real-life situations and companies.”
From the start, BIG has been entirely orchestrated by students. Faculty adviser David Simon is available to provide guidance, but maintains a hands-off policy.
“The students have done an excellent job over the years,” says the professor of finance. “I’ve never felt the need to step in.”
Serious Skills
BIG members are seriously committed to their work, voluntarily spending upward of 20 hours a week on investment research and other aspects of fund management. They rely on Bentley’s Trading Room, which is outfitted with leading data feeds and analytical tools, to help find and evaluate investment ideas.
“The Trading Room and BIG together are phenomenal resources,” says Lauren Webb ’13, an Economics–Finance major. “Having these experiences to talk about during interviews with potential employers really sets students at Bentley apart from students at Ivy League schools.”
Webb would know. During a summer internship with the Asset Management group at JPMorgan Chase in New York, she was a go-to resource for the firm’s own freshly minted hires. They routinely sought her help with Bloomberg and other tools of their new trade.
“I had exposure to those tools for three years through my experience with BIG and the Trading Room, whereas these guys were in their first two years as analysts and just being introduced to the technologies,” she says. “I definitely felt that I had a leg up on my peers.”