Lemma Senbet Fund
The Lemma Senbet Fund is a student managed investments fund offered as a limited-enrollment [1] year-round experiential learning course to top tier[2] undergraduate students from the Robert H. Smith School of Business at the University of Maryland (UMD).
Founding[]
The fund, named for , the William E. Mayer Chair Professor of Finance at the Smith School of the University of Maryland, was founded in 2006 with initial capital of US$50,000 from the school's endowment fund.[1][3][4]
Governance structure[]
The investment management team consists of 12 undergraduate students chosen through an interview and presentation process designed to simulate the hiring process of investment banking firms.[4] The team consists of 2 portfolio managers and 10 equity analysts each dedicated to a specific industry sector: consumer products (discretionary), consumer products (staples), energy, financial services, healthcare, industrials, information technology, materials, telecommunications, and utilities. Each sector analyst pitches approximately 4 stocks per year, and must persuade all 12 members (not just a majority) of the investment team to buy.[5] The student investment management team uses Bloomberg Professional Services running on Bloomberg Terminals to conduct in-depth financial analysis, manage the asset portfolio, and execute security trades.[6] The students are unpaid, and do not share in the fund gains nor receive distributions.
Investment strategy[]
The long-term performance goal of the Lemma Senbet Fund is to outpace appreciation of the S&P 500 Index on a risk-adjusted basis. Historically, the fund has adopted a top-down investment approach that is driven by Economic indicators, then Industry trends, and finally individual Company performance (EIC). Most asset instruments are long equity positions.[2] Specific stock selections are based on a combination of fundamental analysis and technical analysis valuation techniques under the (GARP) model.[7]
Fund growth[]
Since founding in 2006, even after annual distributions the Lemma Senbet Fund has grown 18-fold from $50,000 [1] to $911,032 (fiscal year ended March 31, 2017).[7]
Fund Distributions[]
The Lemma Senbet fund pays a 5% distribution to the UMD Deans Office each year. In 2017, this distribution amounted to $37,729.[7]
References[]
- ^ a b c "Smith School Launches $50K Undergraduate Investment Fund". College Park, Maryland, USA: University of Maryland. November 7, 2006. Retrieved March 26, 2018.
- ^ a b "U of Maryland's Undergrad Fund Earns 'Street Cred'". Wall Street, New York City USA: TheStreet. November 15, 2007. Retrieved March 26, 2018.
- ^ "Lemma W. Senbet The William E. Mayer Chair Professor of Finance, Director of Center for Financial Policy". University of Maryland. Retrieved April 19, 2018.
- ^ a b "University Fund Preps Students". College Park, Maryland, USA: The Diamondback. December 3, 2006. Retrieved March 26, 2018.
- ^ "Market Master's". The Washington Post. 1301 K Street NW, Washington, D.C., USA: Nash Holdings LLC. May 11, 2008. Retrieved March 26, 2018.CS1 maint: location (link)
- ^ "Wall Street Tools Give Edge To Smith Students". College Park, Maryland, USA: Robert H. Smith. July 10, 2014. Retrieved March 26, 2018.
- ^ a b c "Annual Report of Lemma Senbet Fund" (PDF). College Park, Maryland, USA: University of Maryland. May 2, 2017. Retrieved March 26, 2018.
- Investment funds
- Experiential learning