2008 Headlines
Johnson School Takes Largest Class of Cayuga MBA Fund Portfolio Managers
32 students direct $14 million hedge fund and predict S&P 500 next summer
December 9, 2008 | Ithaca, NY | The world has a sour view of Wall Street in light of a plunging stock market and the collapse of many leading banks that has dissipated investor sentiment during 2008. Maybe it is time investors looked to newer talent – MBA students at Cornell University's Johnson School. The Johnson School is proud to welcome its largest class of portfolio managers to run the $14 million market-neutral Cayuga MBA Fund. In a recent survey, the managers were asked to forecast broad market levels for graduation day, May 23, 2009. The averages of all responses predict the S&P 500 to rise to 1,093 and the yield on a 10-year US Treasury Bond to be 3.95 percent.
This year's class consists of 32 second year MBA students and six first year MBA students, making it the largest class to ever manage the Cayuga Fund. In the past, portfolio manager opportunities were reserved for second year students, however this year the Johnson School created assistant portfolio manager positions for first year students to accommodate the increased interest in the class and Cayuga Fund. There has also been increased interest from the Accelerated MBA (AMBA) population, the Johnson School's one-year MBA program, with seven AMBA students now helping to manage the Fund. The majority of current fund managers indicate they are primarily interested in buy-side career opportunities, but the Cayuga Fund alumni have a successful track record in buy-side, sell-side, and other finance positions.
The Cayuga MBA Fund follows a market neutral strategy and has consistently earned strong returns and low volatility relative to its benchmarks by emphasizing selective stock-picking and good risk management. As of market close on December 5, the fund is down 0.72 percent year-to-date, compared to a negative return of 25.46 percent for the HFR Equity Hedge index and a negative return of 0.71 percent for the HFR equity market neutral index. The S&P 500 is down 40.34 percent in the same time period.
Student portfolio managers apply at the end of their first year in a competitive process to join the ranks of Cayuga MBA Fund managers taught by Professor Sanjeev Bhojraj, Associate Professor of Accounting and Faculty Director of the Parker Center. Professor Bhojraj teaches a combination of quantitative and fundamental analysis, utilizing the Johnson School's proprietary quantitative model developed to identify a list of potential stocks, while teaching students the fundamental analysis and pitching skills needed to become a successful analyst or portfolio manager.
"This is an incredibly competitive job market for both buy-side and sell-side analysts," commented Karin Ash, director of the Johnson School's Career Management Center. "Students must differentiate themselves. The Cayuga Fund provides an opportunity for students to realize the immediate impact of their investment decisions on investors' money. Students can prove their abilities to negotiate risk and evaluate companies through the current economic turmoil."
To learn more about the Cayuga MBA Fund or the student portfolio managers, visit the Parker Center for Investment Research.
