Is it worth starting and running Student Led Investment Fund at non-target uni

Needless to say, I'm running out of hope this will go the way I imagined.


A little background: I'm last year at a non-target uni working alongside my friend to build and run SLIF at my uni. No one has done it before and I may know why.


The uni is very reluctant to give us any funds to start it despite many other universities receiving large charitable donations. They will only "consider" if we have a track record of outperformance against a benchmark. We have an advisory board consisting of alumni and professors however, despite this, all the operation and output is within our hands (me and my friend) and meetings are rare only once every few months. We went through over 100 interviews and rejected loads of people who were complete degenerates who didn't even know what the P/E ratio was, let alone how to build a DCF model. The CV formatting is something you have written in primary school. We picked 10~, however, they all have different levels of understanding and knowledge and it's difficult to make sure everyone is on the same page. It takes so much time to build a model and tell how to build a pitch deck. Most of it looks awful and needs loads of fixes. 


My questions are if anyone here was involved with SLIF, what sources, or websites would be helpful to analysts? Should we seek uni to be more involved in governance, management and training? How to make them more committed to their responsibilities? And most importantly is it really worth it for me to put all this time into it?

 

You could raise funds from alumni. Since it is your last year, you might not be able to manage the funds, but raising funds is an essential step and impressive if you could start the process.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee
 

I sort of understand their logic behind it. They don't want to give the money to the monkey who will blow it on penny stocks and out of the money calls and puts. But the dilemma for us this year because the strategy is long term buy and hold and so we need to find some event driven growth stocks. We tried to address this issue by hiring 2-3 1st years who we hope will be involved once we graduate but with this approach it may take years until they give at least £1k or 2. 

 

Eh I was supportive until I read 

We went through over 100 interviews and rejected loads of people who were complete degenerates who didn't even know what the P/E ratio was, let alone how to build a DCF model.

You’re talking shit but your school doesn’t even have a student investment fund. What’s that make you? 

 

Yeah, our school doesn't have an investment fund hence is why we trying to establish it and hire the brightest and smartest out of the applicants. I'm not talking shit, this is just the reality we face during the interviews stage. As soon as we get technical, the most basic thing like explain Beta or list all the important financial statement people usually waffle nonsense or simply don't know the answer. I'm struggling to understand the point you trying to make.

 

Dude you are talking to sophmores and possibly juniors.  What the fuck do you expect?  Them to be polished 3 year analysts?  The point of a student run fund isn't to make money it is to polish up students to get jobs.   The university already gave you your answer when they said beat the benchmark.  That's a No.  Spend your time on more valuable pursuits to building your resume and career enhancements. 

 
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The point is, you are at undergrad level

Who are you to be rejecting people becuase they don't know how to build a DCF? you should be screening people based on the desire they have to learn and there interest in the markets. Guys get 1-2 IB internships and think they are bobby big balls rejecting kids from some bs student fund

The purpose of a student fund is not to make crazy returns, its to build a network of likeminded individuals on campus so that you can all learn from each other.

Perhaps, take a more open minded approach. The reality is, if your uni is not helping much now, they likely wont in the future and your best bet is to reach out to friends at "targets" and see how they operate their funds.

 

Yeah, they are not expected to know how to build the model. It's not a requirement. But when someone has an awful CV and can't demonstrate their interest in finance in any shape or form, how can we be sure this candidate is capable of doing research and making a stock pitch

Our aim is to close the gap between academia and real world application to allow students to gain some exposure to financial analysis, research and portfolio management by as much as we can do so they can develop their skills, demonstrate their eagerness to learn or perhaps have something to talk about during an interview. We may be more strict and selective in the beginning because we leaned towards students who had internship experience but I think this will help us reach our aim and build a strong foundation once I graduate.

 

You made an argument as if you are running an investment bank.  You are talking about a student run fund that is designed to lose money and give students a few hours of expereince into what it would look like. 

You fundamentally do not understand the program you are trying to build. 

 

It shows initative, but you need to find out if the university or alumi base has any money.  As others have said raising capital is a big win.  The odds of that is incredibly low howver.

I think you need to figure out what you want out of this before you decide to move forward.   If you are just trying to resume pump getting an internship will be far mroe valueable than wasting your time on something the university wants nothing to do with.  The response line of "beat the benchmark" is a soft way of saying no.  They hope you will do it and make them some money as a bonus.  But the odds of them giving you money is about 0.

 

Sounds like you need to create an analyst program to train the people you’re interviewing and present that analyst course to the school. Hopefully they’ll see it’s good enough to trust the kids with the funds.

Do you have an investment strategy? Sectors covered? Portfolio management guidelines? Investment guidelines/process?

Will most likely go over better if you can lay out plans on how to successfully manage the fund.

No school is going to expect your fund to have top performance, but more focus on learning and preserving capital by diversification and small position sizing is most likely the way to go

 

And you can do all of this and then start investing in a paper portfolio as you work to secure funds. Nobody is going to allocate money based on the fact that someone wants to start a fund. Need to put in much more thought/work before anyone will consider it

 

Hey there,


That's what we sort of doing. My idea was to run a 1-2 week long boot camp where different professors would cover different aspects of finance and analysis but this idea was unobtainable due to time clashes and limited time availability from school faculty. Therefore we had to run individual workshops with professors. But I really like the idea it's just hard to organise it.

We have a strategy and benchmark suggested by the advisory board which is the FTSE All-Share ESG Index, the overall strategy is value investing, buy and hold with a strong emphasis on ESG consideration which I don't know if it is the best one given the time frame of people involvement of analysts during their studies. I wanted to suggest something more short-medium term so that if someone makes a pitch they have some figures to measure their performance but I can imagine with the current strategy if someone identifies a great opportunity it will take a while until it will be reflected in share price. 

The plan for now is to show what we are capable of to the Business School faculty to gain more than verbal support and increase the social media presence by publishing reports on LinkedIn and the website. Potentially this will help us if we decide to reach out to alumni as well.

Lastly, we made it really clear to analysts that we won't have money and our focus is performance against benchmark but having some money would be better than a demo account.

I would love to hear what you have to say. Appreciate it

 

Quiite frankly you are being appallingly inconsiderate.

You mentioning you had "low expectations and being "shocked" is really quite disappointing - it is as if you think making fun of them gives you brownie points on here, even though the interviewees are literally performing as you would've done as a first-year student completely new to finance.

Did you expect students to know the technicals, what interviewers look for when asking questions, having had no infrastructure of an investment fund / any culture around financial careers that they do at target universities?

You seem to guage your expectations based on the perspective of an actual investment bank - which you are not. You need to have more sympathy. Point being, you CAN & SHOULD teach this to them - just because they messed up an interview it is not indicative of future performance, nor is this interview even necessary for the actual purpose of a student fund, as echoed above.

Them turning up to an interview is a sign of interest, but to confirm they are in your words a "candidate capable of doing research and making a stock pitch", why don't you ask questions that draw on similar skills - like asking about projects in university that required a sharp learning curve, or an intense / long project that required a longer commitment? Internships are a good sign but you will have to concede some highly talented students have no idea of these nor how the process entirely works, so not everyone will have one.

My advice would be to make the bootcamp recorded & provide an introductory slideshow or something to that effect to supplement the recordings (for students going foward) if you are still looking to start this up.

It is a good initiative, but you really need to change your tune before you continue.

 

Not to be too negative, but this is a massive waste of your time.

For a couple of reasons:

  • You're an undergrad yourself, you have zero clue what you're doing 
  • None of your peers (they are your peers, not your analysts or interns) will take you seriously if you're this much of a hardo
  • Undergrad investment funds don't mean shit in the real world, so it's just a useless exercise

I'd like to understand two things: do you have a job lined up and what are you hoping to get out of this endeavor? 

If you don't have a job, you better focus on that.

If your goal is to leave a legacy, then come back as a successful alumnus and do this thing - when you have some expertise and people might actually listen to you.

 
Five Star Man
  • Undergrad investment funds don't mean shit in the real world, so it's just a useless exercise

So I guess these funds are useless? I don't think so bruh. 

Poets&Quants For Undergrads - At The University of Dayton, Student Investors Make Magic — And Millions (poetsandquantsforundergrads.com)

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"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee
 

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"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

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