Student-run private equity funds?

Do any schools have student-run private equity funds that manage real money? I know most schools have regular funds with stocks.

Comments (51)

 
Dec 2, 2020 - 7:26pm

I currently work as an associate at University Growth Fund (UGF), the largest independent student-run PE firm in the US. It has been the single most valuable experience in all of my college career because of the deal exposure and extremely smart people you meet. From day 1 you get to work on all sorts of VC deals but PE deals as well (although way more VC than PE and Growth Equity). UGF is a $50M fund that's led by 2 general partners, both are incredibly talented investors as you can see in the portfolio, one of them even studied at Harvard Business School. The fund is entirely run by mainly undergrad students but also some MBAs & PhDs from colleges in Utah & San Diego, California. It's game-changing because you get to work with the smartest students you'll meet on real live venture deals, making you way more competitive in recruiting during college; making students from UGF place at top bulge brackets banks and PE funds regularly. I have landed an IB Technology coverage SA 2021 offer in San Francisco at a bulge bracket (think JPM/CS/BofA) thanks to all the experience and training I received at UGF and I couldn't be happier. The only downside is that it is unpaid, but the experience and opportunities make up for it in the long term.

 
Nov 29, 2020 - 4:49pm

I know what the links are, I posted them.

Well, what exactly is the expectation here? That there is a 10 billion dollar fund run by students who have no actual work experience? I would say, no, have never heard of such a fund.

 

 

  • 1
 
Nov 29, 2020 - 4:52pm

Imagine having your job and livelihood depend on the competency of a bunch of inexperienced 21 year olds running a over leveraged company.

Array
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  • Intern in CorpFin
Nov 29, 2020 - 4:49pm

This could be a great idea. Maybe I'll start getting the LBO questions right on superdays

 
Nov 29, 2020 - 5:16pm

Do you know how risky and downright stupid it would be for a bunch of undergrads with no experience and limited knowledge of the financial and legal risks to run a pe fund and call up a business owner to pitch the standard " Control supply chain, vertically integrate, off shore your employees and dividend recap". 

Can you explain to me what will happen when you lever a company up to Lehman Bro levels circa 2007 in order to get those fees, juicy returns, flex the IRR and it collapses because your greed is good circle jerk does not know how to adequately adapt to the competition or industry headwinds and your "insight" is a bunch of academic bs.

How are you going to explain that financial stress to creditors, how are you going to explain that a business is now royally fucked to the owner that wanted to exit into doing coke off a models asshole in Ibiza after listening to Avicii for the 10th time in a row?

 

 
  • Analyst 2 in IB-M&A
Nov 29, 2020 - 5:17pm

I think the fact that you have to even ask this question pretty much answers it. Private equity investing is esoteric, risky, and illiquid; so why the FUCK would an investor willingly fork over a few mil to some dumbass college kids who don't know the first thing about navigating a sale, debt issuance, or managing a company. Do you think a bunch of 20 year olds are fit to handle millions of investor equity? HA!! Student run "funds" are usually >$1mm AUM long-only equity pools with no leverage that invest in blue chip stocks and ETFs. Chump change in a bunch of highly liquid constituents. Rich alums will throw in a few thou here and there for shits and giggles.

 
  • Prospect in IB - Gen
Dec 5, 2020 - 9:58pm

I go to UNC and all these students are really respected, definitely the top of the top out of anyone finance focused. I also think its the same amount of MBAs and undergrads usually and you enter as a second semester junior (or first year for MBAs I guess).

 
Dec 5, 2020 - 2:15am

Without digging in myself other than looking at their portfolio, I'm guessing they co-invest as a minority on transactions associated on the majority with larger more seasoned PE firms? Still good analytical experience for top students with lesser risk / need for a strong reputation / likely tied to deals w alum in PE is my guess. Who knows though, I'm always surprised in this world

 
  • Associate 1 in PE - LBOs
Nov 29, 2020 - 5:35pm

^someone mentioned it but Kenan-Flagler has a pretty amazing but selective program for undergrads and MBAs. A coworker of mine (at UMM) was in it. It lasts 3 semesters (get class credit for it) and you coinvest with legit sponsors. It's no BX, but they raise a few million every couple of years which is impressive.

 
  • Analyst 1 in IB - Gen
Nov 29, 2020 - 8:08pm

Wait sorry, what can you do with a few million dollars? Not trolling, srs.

Also, I love the caveat "it's no BX." It's a bit disingenuous..

 
Nov 29, 2020 - 10:06pm

many schools have departments or outlets for student's entrepreneurial ventures that some of these student-PE funds invest in. Other than that I'm not sure. Really great way to boost university offerings to students on two fronts

 
  • Associate 1 in PE - LBOs
Nov 30, 2020 - 12:07am

"The Kenan-Flagler Private Equity Fund will offer you a unique learning experience. Launched in 2007, this fund has more than $6 million in committed capital under management and was the first student-run fund associated with a top-tier global business school that seeks to provide real returns to its limited partners. Working for the private equity fund, you'll receive course credit while you manage all aspects of the investment cycle - raising capital, sourcing deals, performing due diligence, making investment decisions, and presenting decisions to the faculty/advisory committees and the board of directors."

Didn't go to UNC but it looks like it's more about the learning experience. Obviously they're not generating massive returns but coinvesting a small amount gives you insight into the process. Seems like an interesting club/class, that's it.

 
  • Intern in IB-M&A
Nov 29, 2020 - 9:04pm

Tbh not super unheard of. Know a few schools that have funds that are more focused on small businesses/VC and some real estate PE. Lot of times they invest in like a 5% equity stake with a "real" sponsor that is affiliated with the school (usually alums or have a strong connection to a particular professor). Those deals could probably still be done without the students, but its a way for sponsors to give back to the school. Sure- they aren't really true PE sponsors, but it's cool and super educational to be part of those processes. 

 
Nov 30, 2020 - 1:54pm

Check out University Growth Fund. It's ~$50M AUM and has offices in Utah and California. It's mostly growth equity but participates in the occasional control investment.

It's run by two partners (one an ex Merril banker). All of the diligence is done by college students, who research and pitch deals.

Typically, it invests in growth-stage deals (Series B through Pre-IPO). Since it's a co-investment firm, it gets access to great deal-flow (check out the portfolio).

Note: it is NOT affiliated with any one university; it's called "University Growth Fund" because the diligence is done by university students.

 
  • Intern in IB - Ind
Dec 3, 2020 - 6:43pm

I as the class of 2023 can 10000% say without a reasonable doubt that the cringe started in 2024. All classes before that, especially the class of 2023, where never, EVER, cringy. #CO2023Supremacy

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