Major Gift to Provide Business Students Experience Managing Six-Figure Investment Portfolio
- By Jon Reidel
Students in the School of Business Administration have been afforded a rare opportunity to apply the investment skills they have acquired in class to a sizeable portfolio thanks to a major gift from an alumnus.
The Green Mountain Investment Fund (GMIF) was created in November of 2013 with a gift in excess of $100,000 from Whit Wagner ’78, president of Clear Brook Advisors, an independent investment firm with expertise in private investment partnerships focused on large wealth management firms, family offices and high net-worth individuals. Selected juniors and seniors will have the opportunity to propose securities for investment. A designated group of seniors will form the investment committee responsible for managing the fund.
“There’s an enormous difference between managing a paper portfolio and managing real money, where if you lose it’s pretty painful,” said Wagner, who majored in political science but opted to go into commercial banking, later joining an investment firm leading to more than 30 years of investment experience. “If you can eke out a gain, it’s fairly satisfying. The object of the exercise is to try and generate decent long-term returns.”
As part of an established investment policy, the fund may be invested only in listed equity securities or cash. Qualified investments include all U.S. listed equities and American Depositary Receipts of companies with market capitalizations in excess of $250 million. Students are prohibited from investing in exchange-traded funds; mutual funds; IPOs; options, futures, or other derivative securities; preferred or convertible shares; securities not traded on a regulated exchange; private securities; debt securities or private loans.
The fund may hold any mix of cash or equities, although no single position (other than cash) may represent more than 10 percent of assets. The fund may not hold more than 25 securities.
“The responsibility and risks associated with managing real money provides a unique learning experience that cannot be replicated in a conventional academic setting,” said Sanjay Sharma, dean of the School of Business Administration, who will select a faculty adviser for the fund. “We are very grateful to Mr. Wagner for providing another avenue for experiential learning for business students that is at the heart of our curriculum. Whit Wagner’s gift is a significant starting point on which we hope to build the fund through additional gifts and wise investments by the students.”
The annual returns earned by the fund, in excess of inflation, will be distributed each January to the Dean’s Discretionary Fund. Sharma may elect to have the gains reinvested in the GMIF. “I wanted this to benefit the dean and his programs. If students can crank out a six percent return over inflation, you’ll have $30,000 going to the dean,” said Wagner, who is a member of the UVM Business School's board of advisers.
With consent of the advisory board, Sharma will select three individuals to act as an Oversight Committee, which will meet four times per year with the Student Investment Committee and faculty adviser. The Oversight Committee will work with Sharma to establish policies regarding the selection of the juniors and seniors to participate in the program. All investment decisions will be made by the Investment Committee with final approval by the faculty adviser.
“I really want the kids to be making the decisions and be responsible for the fund,” said Wagner, who was on the ski team for one year and played tennis for four years at UVM. “Only if they are about to make a really big mistake should someone from the business advisory board or faculty adviser step in. Mistakes are how they are going to learn; you just want to make sure that the mistakes aren’t fatal.”