KINGSTON, R.I. -- April 3, 2001 -- Twenty-one University of Rhode Island business students will provide an update Wednesday night on their progress managing a $100,000 fund backed by the URI Alumni Association.
The students, who competed to be among the first to manage the Ram Fund, will present information to the Alumni Associations Executive Board, April 4 at 5:30 p.m. at URIs Alan Shawn Feinstein College of Continuing Education in Providence. The presentation will be in Room 242.
Since the start of the spring semester, the students have been managing the Ram Fund, which is backed by an initial $100,000 investment from the URI Alumni Association. On Wednesday night, they will inform the association that they have purchased stock in Tyco International Ltd., a diversified manufacturing and service company.
"This makes sense," said faculty adviser Keith Moore, a 23-year veteran of the Wall Street investment world and 1974 graduate of the University of Rhode Island College of Business Administration. "Tyco is a high-quality firm, and the students have treated this fund like it is their own money, and they have exercised excellent due care."
The idea of a student-managed equity fund was first discussed in the spring of 2000 by URI Finance Professor Dennis McLeavy, Dean Edward M. Mazze, the Alfred J. Verrecchia-Hasbro Inc. Leadership Chair in Business, and leaders of the Alumni Association, when the economy and the stock markets were chugging along. But by mid-March 2001, the Dow Jones Industrial Average dropped 821.21 points its biggest weekly point decline ever.
Has such market activity dampened the enthusiasm of the students? Not one percentage point.
"Its a lot of time, but you get exposed to more things than you ever would in a classroom," said Tommy Thompson, a senior finance and management information systems major from Albany, N.Y. "This is awesome. Its the most rewarding thing I have done here."
As the information systems director of the fund, his primary goals is getting a web site established so members of the group will have remote access.
Shandra Parenteau, a senior accounting major from Chepachet, R.I., is the business manager of the fund. She has been responsible for setting up the office, setting up the computers and putting together an information packet for those students who want to participate.
She admits, however, that she has little experience in finance. "I have had only two classes in finance, but I am learning a lot from the members of the team. With some classes, you have a professor talking to you, but here, we are doing the work."
As the value manager of the fund, Westerly, R.I.s Chad Brayman oversees 10 people. "I was one of the original members who helped developed the organizational plan and the business plan for the fund. We had to present our plan to the Alumni Association in the fall, and that was a great experience. With this program, we really have a chance to apply what we learn. We are doing many of the calculations to determine firms values."
Those comments are music to Moore, who started work on a doctorate in business at URI in 1998. Initially, he was asked to teach two sections of an upper level finance course, but now he is just teaching one finance class and advising the students with the Ram Fund.
After working with the Ram Fund students during the fall semester on a business plan and organizational chart, Moore began preparing the students for their first buy. He also brought them to New York for a Wall Street tour.
"They are going to experience firsthand investing with real money," Moore said. "They are going to be learning how to invest money for the long term. They are learning about fiduciary responsibility and their relationship to their client, the URI Alumni Association.
"How many students can say they participated in committing funds in this way?"
At the top of the organizational chart are the funds advisory board and Moore as the faculty adviser. Then the students take over in positions of general manager, business manager and information systems manager. Then the organizational structure breaks into positions that work with the value fund and the growth fund. The students working in the value fund arena are researching undervalued securities for companies that are out of favor and do not pose as much risk. The growth fund students are managing and buying securities that have the potential for strong investment return.
Each of the students had to apply for their positions and provide complete backgrounds. If accepted the students earn three credits per semester for their work.
"We want to expose our students to a variety of people in the investment world," Moore said. "Some have already been approached with job offers.
"There were students not accepted into the fund, but we have encouraged them to become volunteer analysts, so that they can learn the ropes and then reapply for a three-credit position."
In December, the students presented their business plan and organizational chart to the Alumni Association. The early returns show that people are impressed with their work.
"They were outstanding. They were prepared, professionally dressed, and they put together a wonderful Power Point presentation," said Michele Nota, executive director of Alumni Relations. "They anticipated every possible question. They stay up long hours working on this."
And Nota said Moore has been a wonderful mentor. "He is very approachable, and I think these students are going to stay in contact with him long after they graduate."
Alan Wasserman, Alumni Association president, and a graduate of the College of Business Administration, said when the group finished watching and listening to the December presentation, the only thing it regretted was that it wasnt taped.
"The students made a presentation to people who work for brokerage houses like Merrill Lynch and Smith Barney, and they were spectacularly impressed. Everyone who has had contact with Keith and the program has been very impressed. The Alumni Association is delighted to allow them to manage a portion of its assets. These students are wise beyond their years, and I give a lot of credit to Keith for that. But you can tell the kids have been charged up by the program, and have put in tons of time."
For Information: Keith Moore 874-4351, Dave Lavallee 874-2116