Student Teams Compete for Capital in Pitching to the Stars

By William Rindfuss, executive director of strategic programs and Lecturer, Haas Finance Group

Team Blue was feeling good following its investment strategy pitch…

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 6^th, 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.”

…while members of Team Gold were feeling even better at the post-pitch celebration, here with judge Minder Cheng.

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.

Winning Approaches: Wharton Latin American Private Equity Competition

Winning at Wharton: Javier Aranguiz, Dani Alonso, Carlos Prada, and Alex Igoshin

The competition: Wharton Latin American Private Equity Competition, Feb. 2.

The outcome: Tied for first with Chicago Booth.

The team: Dani Alonso, Javier Aranguiz, Alex Igoshin,  and Carlos Prada, all MBA 14.

The field: In addition to Berkeley-Haas and Booth, Wharton, NYU, Ross, and HEC.

The challenge: Presenting an investment opportunity in Latin America to a committee of managing directors from leading firms including Acon, CVCI, General Atlantic, Amzak, and IIC (Inter-American Investment Corp.).

The winning approach: “For the first round, we proposed a buy-and-build strategy to assemble a sizeable regional multi-brand fast food chain,” says Prada. “This would start with the acquisition of one of the leading fast food chains in Chile, a platform for future strategic acquisitions in Colombia and Peru.” For the final round, Booth and Berkeley-Haas went head-to-head on a case seeking recommendations regarding investment in a Colombian private energy generation company under financial distress.

Won because: “Our investment opportunity had all the features of an attractive investment for a private equity fund,” says Prada, citing the proven business model, strong brand equity in Chile, and relationships with real estate developers. “The judges also found the proprietary nature of our deal appealing–we selected a below-the-radar target company, demonstrating familiarity with the market.”

The “H” factor: Leadership Communications and Finance were the main courses from which the team drew essential skills and knowledge. “We kicked off the first presentation to the judges with storytelling and had a clear outline that allowed the judges to fully understand the structure of our presentation,” says Prada. He also notes that the team’s diverse background was an asset, with Aranguiz having worked in public equity investments, Igoshin in private equity, Alonso in consulting and retail, and Prada in private equity and consulting. Igoshin says an understanding of team dynamics, honed through the Teams@Haas component of the Berkeley Innovative Leader Development (BILD) curriculum, played a role as well.

The benefits: “Hearing directly from the industry’s leading practitioners in Latin America about the rationale behind their investment analysis process, their motivations to invest in the region, their thoughts on the future of the industry in the region, and their firms’ career opportunities,” says Prada. “From fellow students—our future colleagues and industry leaders–we sought to learn from their experience and establish relationships for future deal sourcing.”

Students Explore Finance on Bicoastal Treks

Felipe Gonzalez enjoys NYC pre-trek

Felipe Gonzalez, MBA 14, devoted one week in October to his future in finance, participating in two Haas School treks: the Wall Street trek to New York for investment banking, organized by Steve Willis and Mor Ben Efraim, both MBA 14, of the Haas Finance Club; and the LA trek for investment management, organized by Investment Club Co-Presidents Chao Zhang and Matt Therian, both MBA 13.

Gonzalez, who previously worked as a portfolio manager in Santiago, Chile, describes his career as “quant focused” and is pursuing his MBA to strengthen management and leadership skills. While he is now focused on investment management, Gonzalez participated in both treks. “When else do you get this kind of opportunity to network and explore such a wide variety of finance roles?”

Here are notes from his East/West, IB/IM experience:

Why he went: “To learn about the different jobs an MBA could do in the financial industry. And to compare New York and LA to San Francisco to see if I could picture myself living in either place.”

Culture matters: Gonzalez, who chose Haas for its culture, says he was “amazed” by the differences among the banks. “The cultures and ways of expressing themselves were very different. You could almost feel J.P. Morgan being the large ‘number 1 bank;’ how the rapid growth of a relatively new investment banking business has affected Wells Fargo; and the culture of utmost high achievement at Goldman Sachs.”

Fourteen hours a day with whom? “Almost every bank and investment management firm stressed a ‘no jerks’ (another word was sometimes chosen) policy. This definitely breaks the Hollywood personification of the Wall Street banker and even my own previous perceptions. These are long days and you’d better have nice people working with you.”

Candid views of the IB landscape: Bill Rindfuss, executive director of strategic programs for the finance faculty group, says the Wall Street trek provides students with exposure to the global finance capital and the headquarters for most firms. Students meet with  alumni and other professionals working in product groups and industry coverage groups that may not be represented in West Coast offices.  “We even got to meet with the co-head of investment banking at one firm, an alum who shared a very objective and candid high-level view of the IB landscape and outlook,” says Rindfuss.  “San Francisco is home to some very appealing activity within IB, including tech and healthcare coverage, M&A, and IPOs. But it is also eye-opening for students to see the scale and variety of opportunities in the finance capital.”

Wall Street trekkers between banks

Big Deals in the Big Apple:Gonzalez agrees and further rounded out his Wall Street experience by meeting with the Latin American fixed-income desk at Deutsche Bank. He also grabbed a quick lunch with a preoccupied friend from J.P. Morgan’s Latin American M&A team, who, it turns out, was in the middle of this $2.6 billion deal.

 LA Celeb Spotting–Finance Style: “We visited three companies, one of them being PIMCO. Founder Bill Gross is a huge fixed income guru and some of us saw him walk by when we visited the trading floor,” says Gonzalez. “I’ve been reading his market comments for the last six years and seeing him was incredible!” (Read more about the LA trek here.)

What now: “The treks definitely helped me make up my mind on where to look for a summer internship,” Gonzales says. “Now, I continue networking and keep working on my thank-you emails.”

LA trekkers at PIMCO

 

MBA Internships: Citigroup

Benny Du, MBA 13, celebrated 200 years of Citi by volunteering to refurbish a park on the Upper West Side and entertain kids for the Fresh Air Fund in Brooklyn

Student: Benny Du, MBA 13

Interning with: Citigroup, NYC, as part of the Digital Strategy and Channels Team at Citi Cards.

Thrilled because: “Citi is truly a global brand.” Also, since this year marks the 200^th anniversary for Citi, Du was able to take part in the celebration.

 Can’t believe he’s getting the chance to: Meet and interact with many senior leaders and executives, such as Jud Linville, CEO of Citi Cards. “Also, I’ve already had an in-depth discussion on the future of payments with the executive responsible for the Citi—Google Wallet partnership.”

The Berkeley MBA toolkit: Du has been using the observation and framing skills learned during PFPS class exercises. “I have also consulted with Sara Beckman during my time here. The framework that she provided of ‘use, usability, and meaning’ has been helpful in figuring out how consumers engage digitally through various devices, touch points, and functionalities; and determining potential opportunities for Citi. 

Inside Citi: “The summer associates were given a core values card (along with our name badges) as reminders to ‘be bold and curious,’ and ‘think and act like an owner.’ These definitely remind me of the Haas Defining Principles.”

Advancing career goals by: Gaining exposure to a wide variety of functions, such as traditional e-mail marketing and digital media strategy, along with “a front-row seat on applying innovation and cutting-edge technology to a consumer-facing business.”

Investment Fund Students Pitch Strategies to Distinguished Judges

By William Rindfuss, executive director of strategic programs, Haas Finance Group

It was a format familiar to many, but without any singing or dancing. And with much nicer judges.

On May 9, students in the Haas Investment Fund course — an experiential learning course in our Innovative Leader curriculum, competed against each other in pitching to judges the investment strategies they’d been developing over the past semester. The purpose was for the teams to benefit from feedback and advice from this panel of high-level investment professionals (who have a Berkeley MBA and two Haas PhD degrees among them), and for the judges to recommend allocation of the fund itself between the two competing teams, based on the market-beating promise of their innovative strategies — taken together with the degree of perceived risk.

Investment executive and Haas alum Minder Cheng (l.) with Haas Investment Fund students.

Judges included Minder Cheng, MBA 89, PhD 94, independent director with Investment Technology Group, Inc. Previously, Cheng served as chief investment officer for index equity and capital markets globally at BlackRock and as chief investment officer for the Equity and Capital Markets division of Barclay’s Global Investors worldwide.

Students in the course are encouraged to consider their own backgrounds and areas of expertise that would provide their teams with unique insights into the fundamental dynamics of particular industries or macro trends. They use skills learned in the Problem Finding Problem Solving course in “divergent thinking” to brainstorm multiple possible theses, and in “convergent thinking” to narrow and refine the list for further research and analysis. They are introduced to the particular financial instruments that might be used to implement a strategy (most students benefit from concurrently taking the Investments course), and they may then analyze their strategies with factor models and backtest them with historical data. Students received training on financial tools such as Bloomberg, FactSet, and BarraOne — as well as research tools and databases available from the Haas Library.

Team 1 had developed a “matched pair” strategy of long/short positions within multiple segments of the automotive components industry, with positions selected based on varying degrees of commitment to green technology. Team 2 had developed a screen for promising performance in the apparel retail space based in part on real-time trends in “Likes” of particular brands on Facebook.

Guidance was constructively delivered by the judges and was eye-opening to the students. A member of Team 1 felt the judges “provided extremely insightful feedback regarding our proposed investment strategy, including their suggestion to look more closely at current valuations and their recommendation to reconfigure our portfolio to a long-only one with risk analyzed through a factor model.”

A member of Team 2 added “The panelists’ questions were candid and thought-provoking.  It was reassuring to find that we had already discussed some of them in our team meetings — while there were others we hadn’t considered at all. To be able to present in front of such a distinguished panel was truly a phenomenal experience.  The panelists were respectful, kind, and generous with their compliments.”

In the end, the judges allocated the fund 60/40 between the two teams. After some adjustments based on the insights and suggestions of the judges, the teams will implement their strategies starting this June and will continue to implement, monitor, and manage their positions until December.

This one-year, three-unit course is cross-listed between the Full-time and Evening & Weekend MBA Programs and was led this year by Finance faculty members Christine Parlour and Bill Rindfuss.

With the pressure of pitching over…

…these investment fund teams will spend the next six months implementing their strategies.

Winning Approaches: University of Michigan Renewable Energy

The Winning Team: Dave Hirsch, Rohan Ma, Dan Stotts, Josh Lich, all MBA 13

The Competition: Renewable Energy Case Competition, University of Michigan, Feb. 2nd.

The Team: Dave Hirsch, Josh Lich, Rohan Ma, and Dan Stotts, all MBA 13.

The Outcome: First place.

The Field: Fifteen other teams, including those from Columbia, Tuck, Fuqua, and Kellogg.

The Challenge: To move a Michigan utility closer to achieving 20% of electricity generation from renewable energy technology. The team analyzed the cost-effectiveness of both renewable  and conventional energy generation; conducted risk and extraneous cost assements, and developed a risk-minimizing strategy that included analysis of tax implications.

The Winning Approach: Diversification. “We suggested a solution similar to diversifying a stock portfolio that would minimize the risks associated with renewable energy,” says Stotts. Also, a dose of reality.” We emphasized that there is no ‘magic bullet,’ but rather a combination of best-practices to employ around locational diversification, smart grid, energy storage, and market integration. Behind these recommendations, we provided robust financial modeling the corroborated our story.”

Won Because: Judges praised the team’s thorough and consistent approach. Stotts says the team’s two “quants,” Ma and Hirsch, exhaustively researched the inputs to the financial models that eventually led to the final costs presented. “The judges, industry experts, could see our costs were logical and realistic,” Stotts says” Additionally, the team’s strategy was specific to the market in which it operated and highly applicable.

The H Factor: “There’s no question that Berkeley-Haas has a vibrant energy community,” says Stotts. “The access that we, as first-years, have received through BERC, the Energy Institute, and experiential learning really provided an intuition from which we could think through the problems.” The team also credits the Leadership Communications course with helping deliver a confident presentation.

Defining Principles at Work: “Everyone left their egos at the door in order to facilitate collaboration,” says Stotts. The team took a Students Always approach by believing they could learn from each other and incorporating peer feedback to arrive at a more refined message. “Our maturity and authority on the subject matter also showed the Confidence without Attitude” that was behind our teamwork.”

Why it Mattered: “These are important problems and this is the preeminent energy case competition in the U.S. We wanted to represent Haas and leverage our respective backgrounds to develop solutions.”

ZZZ Factor: Every spare moment from receiving the case on Jan. 27 to presenting solutions on Feb. 2. was spent on the case. The night before departure, the team worked until 2 a.m., then left to pack for 6 a.m. flights. Copious amounts of caffeine and 80′s pop via Spotify kept them going in those final hours.

MBA 11s at Work: Dodge & Cox

Welcome to MBA 11s at Work, a periodic series on the career launches—in consulting, finance, tech, entrepreneurship, and more—of the Berkeley MBA class of 2011. First up: Hallie Marshall of Dodge & Cox.

Grad: Hallie Marshall, MBA 11

Working as: Portfolio Manager with Dodge & Cox, where she researches and analyzes large public companies looking for new investment ideas for the firm’s mutual funds and separately-managed accounts.

Thrilled to be with Dodge & Cox because: “The foundation of our investment approach has always been deep, fundamental analysis on companies and securities, combined with a strict valuation discipline,” says Marshall. “In the current climate of market uncertainty, I am proud to be part of an investment team that remains committed to its original values of integrity, client focus, continuous learning, persistence, accountability and independence.”

Most excited to be working on: Analyzing  international companies means Marshall gets to study the political economy of countries worldwide. “I’ve always been interested in the intersection of politics and economics, particularly in the developing world, and my work allows me to study these topics on a daily basis.”

Inside Dodge & Cox: The firm brings professors in to instruct equity analysts on topics from accounting to technology strategy analysis. “Haas professors and instructors will be teaching a series at Dodge & Cox in 2012!”

Networked: “There is a healthy Cal vs. Stanford rivalry at my office as there are many alumni from both schools here,” says Marshall (who does admit that this past football season was a tough one.)

Best career search strategies: “Working as an equity research analyst intern was the single most important factor that allowed me to confirm my career choice,” says Marshall. She also met with the Career Management Group to hone her resume and interview strategy. “My adviser went the extra mile to make sure I was prepared.”

From the classroom to reality: “The analyses I learned from Professor Richard Sloan in his “Financial Information Analysis” class are techniques I use regularly to assess earnings quality of the companies I study.”

Living the Bay Area life: “In my free time, I hike on Mt. Tamalpais with my 2 year old son in a backpack.  (My son is known by classmates as ‘Baby Oski’ because he was born during our first year at Haas.) I’m expecting another baby in May, so it’s getting harder to make it up the mountain!”

MBA Internships: Visa

Student: Amy Josephson, MBA 12

Interning with: Visa Inc, Foster City, CA

Thrilled to be with Visa because: It’s “a major global brand with tons of interesting areas to focus on as a marketer– from global brand strategy to Olympics sponsorship to innovative new payment solutions in the mobile and eCommerce space. “

Can’t believe she’s getting the chance to: Get exposure to the CMO (Chief Marketing Officer) through intern executive breakfasts and project presentations with her team.

Already she’s learned: “How to prep a building for painting!” (through a Visa Volunteers day at a local elementary school.) She’s also gained good strategic frameworks for product marketing.

Advancing career goals by: “Applying strategic thinking to marketing in a way I haven’t done before.”

Who makes you proud to be Berkeley-Haas? Tell us in the comments below or share your stories with vgilbert@haas.berkeley.edu.

Award-Winning Instruction

Students Honor Faculty, GSIs with Cheit Teaching Awards

Poised on the brink of summer, with its new career opportunities, internships, or continuing coursework, Berkeley-Haas students took time to pay tribute to faculty members and graduate student instructors (GSIs) by bestowing Earl F. Cheit Awards for excellence in teaching.

Asst. Finance Prof. Walden

Finance faculty were honored with four of the awards, with Peter Goodson winning for his teaching in the Berkeley-Columbia Executive MBA Program, Mark Rubinstein for the Master’s in Financial Engineering Program, Alexei Tchistyi for work in the PhD Program, and Johan Walden for his teaching in the Evening MBA Program.

The Full-time MBA program honored Richard Sloan of the Haas Accounting Group, while the Weekend MBA Program, recognized Terry Taylor of the Operations and Information Technology Management Group. The Undergraduate Program gave the award to Jennifer Walske of the Lester Center for Entrepreneurship and Innovation.

Students recognized with GSI awards were: Edward Egan, a Business and Public Policy PhD student, who worked in the Full-Time MBA Program; James McLaughlin, a Finance PhD student, for his work in the Weekend MBA Program; and Sam Snyder, MBA 11, former president of the Haas Finance Club, for his work in the Undergraduate Program.

Recipients are selected by student panels from student nominations. Dean Emeritus Earl “Budd” Cheit established the awards in 1976 and made teaching excellence one of his top priorities.

Who makes you proud to be Berkeley-Haas? Tell us in the comments below or share your stories with vgilbert@haas.berkeley.edu.

The Oracle of Omaha

Berkeley MBA Students Visit Warren Buffett

Twenty Berkeley MBA students journeyed to Omaha to meet legendary investor Warren Buffett, on a March 11 trip organized by the Haas Investment Club. They toured Berkshire Hathaway portfolio companies and had a generous Q & A session and lunch with the Oracle of Omaha. Read all about it in a blog post by Investment Club Co-president Aaron Azelton, MBA 12. Azelton (in headlock below) hails Buffett as inspiring, insightful, and, well… humorous.

Who makes you proud to be Berkeley-Haas? Tell us in the comments below or share your stories with vgilbert@haas.berkeley.edu.