An Investment in Education

A student-run organization is turning heads in the financial community and earning the Tommy and Victoria Baker School of Business some well-deserved recognition.

SMIF, The Citadel’s Student-Managed Investment Fund, works like an asset management firm, giving a group of about 40 cadets and students of all majors the opportunity to manage real money in financial markets, putting theory into practice.

In March, The Citadel Foundation agreed to invest $1 million of its endowed funds with SMIF, noting that its performance has been commensurate with the S&P 500. Likewise, The Citadel Trust authorized a significant investment. In return, the students will manage these portfolios just as a professional investment firm would, providing returns to TCF and The Citadel Trust as their inaugural clients.

“It’s not Monopoly money,” said Chuck Lawless, ’94, a senior managing director at Mesirow Financial in Chicago who in his role as chair of the Investment Committee for TCF’s Board of Directors led the charge to enable the college’s finance students to manage this small portion of the foundation’s endowment. “We’re entrusting students with legitimate funds and giving them real- world experience in security analysis and portfolio management. This is flight school for our business students. They are charged with reporting their market returns to the board periodically, as they will to future real-world clients, and we will allocate those returns back to the college as part of TCF’s annual academic enhancement grant.”

The advisor to the organization is Paul Meeks, CFA, CAIA, a professor of practice in the Baker School of Business. In addition to teaching, Meeks has more than 30 years of experience as an institutional equity analyst and portfolio manager. He is best known for investing in technology stocks and appears regularly on CNBC to “talk tech.”

SMIF meets every Tuesday in Bastin Hall, where students manage funds in an environment similar to an investment firm, with access to 12 Bloomberg terminals like those used on Wall Street.

“Bloomberg terminals have software that helps business professionals analyze markettrends in real time. Most schools have only one or none at all,” said Meeks. “It is unprecedented to have 12. They’re very expensive, and each terminal has a monthly street cost of $2,000.”

With the enthusiasm generated by the recent investments, Meeks is excited about the future for SMIF.

“Our students treat this as their part-time job. What they are doing is real work,” said Meeks, who added that these infusions of cash will put The Citadelon the map among schools with student-managed investment portfolios, particularly in the Southeast. “I am a baseball fan. With the addition of the 12 Bloomberg terminals and the investments from TCF and The Citadel Trust, it’s like going from the minor leagues to the Yankees in how we compare to many other academic institutions.”

SMIF also participates in conferences with other student financial organizations across the country. Last year members traveled to the 8th Annual Student Managed Investment Fund Consortium in Chicago hosted by Indiana State University, where they placed third in performance. At the conference, they engaged with other groups to share portfolio strategies and performance details.

Cadet Carl Custer, a senior Mike Company finance major with an Army contract, learned about the organization as a freshman when one of the SMIF leaders suggested he join. Now, he serves as the vice president of compliance for SMIF and plans to pursue a master’s degree in accounting after graduation.

Trevor West is a veteran student and accounting major who has always been interested in mergers and acquisitions. He serves as the portfolio manager and hopes one day to manage his own CPA firm. And Ashlyn Howard, a veteran student who is passionate about SMIF, serves as the real estate sector head, which makes up 3% of the entire portfolio.

“Think of us as a student investment firm. What we do translates very well into the private sector. I am not even a finance major,” said Howard, who is majoring in marketing and business development. “I just love being around like-minded people and learning from someone like Professor Meeks. He isjust a wealth of knowledge and helps us tremendously as we learn how best to manage the fund.”