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Memorial University school of business launches first student-managed investment fund

Luke O’Brien, vice-president, portfolio manager and wealth adviser at RBC Dominion Securities Inc. in St. John’s, speaks with members of the inaugural cohort for Memorial University’s first student-managed investment portfolio called The Fund at the White Trading Lab. O’Brien and Brad White, co-founder, partner and chair of EdgeHill Partners in Toronto and namesake for the trading lab, donated a combined $150,000 to make the program possible.
Luke O’Brien (left), vice-president, portfolio manager and wealth adviser at RBC Dominion Securities Inc. in St. John’s, speaks with members of the inaugural cohort for Memorial University’s first student-managed investment portfolio called The Fund at the White Trading Lab. O’Brien and Brad White, co-founder, partner and chair of EdgeHill Partners in Toronto and namesake for the trading lab, donated a combined $150,000 to make the program possible. From the left are students Kelechi Owasi, James O'Keefe-Daw, and Anika Walsh. - Kenn Oliver

Real money, real risk, real rewards

Things just got real for a group of Memorial University students with the launch of The Fund, the institution’s first student-managed investment fund.

For the last seven years, thanks to a pair of donations from two Memorial University alumni to establish the White Trading Lab, students in the faculty of business have been able to work on computers and software that provide real-time access to global market information, allowing students to do everything a stockbroker can.
The only exception being that they couldn’t make the trade.

“The machines were there, but then the impetus to make sure that students were really, really making the most of these machines was missing,” explains dean Isabelle Dostaler.

Now, thanks to another pair of donations from alumni, a new group of students will be playing for real.

The Fund is made possible by a $100,000 donation from Brad White, co-founder, partner and chair of EdgeHill Partners in Toronto — and namesake of the White Trading Lab, having made the initial 2011 donation — and another $50,000 from Luke O’Brien, vice-president, portfolio manager and wealth adviser at RBC Dominion Securities Inc. in St. John’s.

But White and O’Brien won’t have much control over what happens to the money. The research, valuations and investments will be the responsibility of the 15 students who make up the first cohort. To further the experiential learning aspect of the program, students will take on specific roles such as portfolio manager, sector managers and analyst.

“In speaking with our alumni and the business community, I was told that financial management firms will hire students preferably from schools where such a program exists,” says Dostaler.

“So, by giving this opportunity to our students now, we're really opening up the opportunities for them on the job market. “

Students aren’t entirely left to their own devices, of course. In addition to faculty advisers led by Erin Oldford — who Dostaler credits as the driving force to get the program off the ground — The Fund will also benefit from a team of industry professionals ready to guide students as they research investment opportunities, produce research reports and monitor and execute stock positions.

O’Brien, a 1997 bachelor of commerce co-op graduate, encourages the cohort not to be afraid to take risks.

“I think we'd be a little bit disappointed if we looked at a student-managed investment fund and the portfolio was exactly the same as if I sat down and looked at my mother's retirement portfolio,” he said.

“I'm sure there'll be some familiar names in the portfolio, but we'd be excited as well to see what students have been able to undercover in terms of valuation.”

Among the advisers recruited to guide students is Josh Quinton, who recently returned to the province to work with CIBC Wood Gundy after spending the first 10 years of his career working for Bloomberg LP in New York City. He was the second aforementioned donor who helped establish the White Trading Lab, securing a deal with the financial giant for the purchase of official Bloomberg terminals and software.

“We've put in some pretty detailed controls in place that go all the way through the dean and the rest of the university to make sure that the students aren't going to invest in anything they shouldn’t invest in,” explains Quinton, another MUN bachelor of commerce grad.

“We'll be sticking to, generally, large cap equities. So, companies, (exchange-traded funds), some bonds, some fixed income as well. The market always changes and evolves, so this will evolve over time.”

To start, any investment dividends stemming from student activity will be re-invested, but down the road it could be used to pay for entrance scholarships or chartered financial analyst exams. O’Brien sees it as having a “perpetual benefit potential” in that it could generate an entrance scholarship to a student in the cohort who could then go on to work in the field and one day contribute to the fund themselves.

If they lose, well, that’s part of the learning process and, as Dostaler suggests, like a formative experience for students.

“If you lose real money because of a bad transaction I would suppose that students will remember that, and making mistakes is very important in how you develop as a manager,” says the dean.

Bachelor of economics student Hieu Nguyen doesn’t possess any formal stock market experience and she admits that investing with someone else’s money can be a bit nerve-wracking.

“We're going to make sure that everything is good. We're not going to be negligent or screw up everything,” says Nguyen, a native of Vietnam who came to Newfoundland two years ago to complete her business administration degree.

“Also, we have the faculty adviser who's going to be reviewing all the research, weekly performance of the market, and we're also going to have industry mentors who are going to be contributing their knowledge in time to helping us throughout the whole process. We have a lot of support from faculty and mentors from the industry.”

Nguyen, 21, also lauds the White Trading Lab, which benefitted from a refurbishment made possible by a donation from former faculty member Alex Faseruk.

“This is a very wonderful computer lab with Bloomberg terminals. It costs a lot of money to have them and also costs a lot to keep them running,” says Nguyen.

“We have a home here which is a foundation for everything, with a lot of knowledge and a lot of resources.”

But they’re looking for more resources, particularly of the donation type to expand the fund and allow students even more breadth in their investments.

“We'll be reaching out, but people are welcome to get in touch with us and it would be awesome to have further help,” says Dostaler.

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