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Finance club to manage portion of endowment

By Hannah Todd     9/11/14 10:17am

For the first time in Rice University’s history, undergraduates will be directly involved in the investment of Rice’s endowment, according to Marketing Director of Rice Finance Group Hayden Ren.

Ren, a Sid Richardson College senior, said he and other members of Rice Finance Group had the idea of getting involved in the investment of Rice’s endowment two years ago.

“The Jones Business School has a 200 million dollar Rice fund that the graduate students manage. The 4.6 billion dollar Rice Endowment entrusted the graduates with it,” Ren said. “However, the undergraduates here get nothing.”

Last year, the biggest project Rice Finance Group sponsored was an investment contest, according to Ren.

“We ran a Rice portfolio management competition using a program that inputs live data from Wall Street,” Ren said. “Around 30 teams with at least two to three members each signed up. Many who joined flooded us with emails about suggestions on what to buy, showing us the need for education about real-life application of finance.”

Following proposals, Rice Finance Group’s leaders worked to formulate due diligence documents and formal propositions to demonstrate to the university that they were ready to be trusted with managing a part of the endowment.

“Overseen by Allison Thacker and Larry Perez, heads of Rice Endowment, Rice Finance Group will provide research data, strategies and suggestions for the $10,000 of initial investment funding,” Ren said. “Ultimately, the final decision still lies with Thacker and her analyst, but our input requires that she put her reputation on the line.”

The transition of the Rice Finance Club to an investment group came about due to a need to educate the Rice student body.

“We have two main goals: one to educate people about finance in general, to use what they learn at Rice to what they do both at the office and for their personal lives,” Ren said. ”[The second] is to give students new research skills they can use in their own life in the future.”

Ren said commitment on the part of club members would be imperative.

“If you’re having five midterms next week, how are you also going to do five hours of research?” Ren said. “Currently, I’m trying to build up a model, but in some ways, that is more risky.”

Although Ren is a senior, h?e hopes this year will succeed as a building year for the group.

“This year, we came out with strict guidelines on the process of joining, looking for people who will stick with us for the next two to three years,” Ren said. “In addition, we are planning a structured course from which students will get some sort of certificate from Jones Business School, affirming the possession of certain business skills at the end, something involved students can put on their resumes that suggests experience, [which] help them find good finance-related internships and jobs in the future.”

In terms of yielding goals for the year, Ren said he is approaching the group’s new project without high expectations.

“Yield-wise, we hope to perform a bit under the market,” Ren said. “Hopefully we can catch most of the upside and little of the downside. Realistically, we probably will never beat the benchmark, but we will try our best to at least perform [to its standards].”

Marketing Director Drew Sutherland said he is proud that Rice students will have an opportunity to gain direct experience with investing.

“I am excited for what the future holds for the Investment Division of Rice Finance,” Sutherland, a Jones College junior, said. “This is just the beginning, and it is only going to get bigger and better as time goes on. I can only imagine where this will be 10 years from now.”

Find out more about the Rice Finance Club by visiting http://financegroup.rice.edu/

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