What is the student investment fund all about?
The Fund was designed as a complement to classroom learning, so it’s about giving students an opportunity to develop practical skills in buy-side investing. Therefore, we welcome all students from the Business School, whether they have previous investment experience or not.
It’s also about bridging the diversity gap in the investment and broader finance industry – one of our key aims has been to develop a fund with a diverse and inclusive membership and analyst base. Currently, we have around 150 members of 25 different nationalities, and 25% of our members are female. Our analysts are 19% female, and we are currently working on strategies to attract and retain female talent at all levels of the Fund (member, analyst, Executive Team, and Advisory Board).
Furthermore, we are committed to upholding Imperial College Business School’s key value proposition – blending business and technology. To our knowledge, our fund is the first student-led investment fund to run both fundamental and quantitative strategies. In line with the Business School’s technological focus, our investments are divided 70/30 across our quantitative and fundamental strategies, respectively.
We also work alongside innovative start-ups, like QIARK, which allows us to make democratic investment decisions. In theory, this platform could allow us to open up the Fund to the entire College in the future.
How is this expected to benefit students?
The key benefit to students is the practical experience that they’ll gain as an analyst. By equipping students with skills that they can apply on the job, they are better placed to step into an equity analyst role after graduation.
A secondary benefit is the network that surrounds the Fund – we are supported by a group of renowned industry professionals and senior faculty. Our Advisory Board is comprised of professionals from JPMorgan Asset Management, Tikehau Capital and Aviva Investors, to name a few. Students have the opportunity to network with industry professionals at our events, including our regular stock pitches, where analysts receive feedback on their analysis and presentation skills from these professionals.
Take me through the genesis of this idea.
One of our co-CEOs, Davide Sciuto, previously set up Lancaster University’s student investment fund during his undergraduate studies and wanted to create a similar initiative at Imperial. The idea for the Fund was thus dreamt up by Davide, and then brought to life by a group of MSc Investment & Wealth Management, MSc Finance & Accounting and MSc Strategic Marketing students.
Our aim in creating the Fund was to close the gap between classroom learning and best practice in the asset management world – given that breaking into the investment industry is a highly competitive process. In addition, we’re hearing from employers that graduates are entering the workforce with a great grounding in academic theory, but few practical skills. The Fund thus assists students who seek employment in the buy-side industry both by cultivating practical skills and by exposing them to Fund’s network of industry professionals, and eventually, the Fund’s own alumni.
In addition, the Fund also encourages learning outside of one’s core discipline – our membership base includes students from across the Business School, from financial and non-financial backgrounds.
What does the fund entail?
The Fund works under the following structure: It is run by an Executive Team of 6 MSc Investment and Wealth Management students, a MSc Finance & Accounting student and a MSc Strategic Marketing student, these are:
- Co-CEOs – Jonathan Fielding and Davide Sciuto
- Chief Investment Officer – Nicola Zanetti
- Chief Risk Officer – Atiba Jackson
- Head of Research – Edoardo Pediconi
- Head of Communications – Katherine Tunaley
It is overseen by an Investment Committee, which ensures that we are complying with requirements and risk controls agreed upon by ourselves, the Business School, central College and the Endowment, this is:
- Professor Walter Distaso – Chairman of the Investment Committee (Professor of Financial Econometrics at Imperial College Business School)
- Professor James Sefton – Investment Committee Member (Chair in Economics at Imperial College Business School)
- – Professor Paolo Zaffaroni – Investment Committee Member (Professor of Financial Econometrics at Imperial College Business School)
- – Professor Alexander Michaelides – Investment Committee Member (Professor of Finance at Imperial College Business School)
As previously mentioned, we also have an Advisory Board, made up of several industry professionals, including:
- Guillaume Benhamou (Investment Director at Tikehau Capital)
- Victor Li (Fund Manager at JPMogan Asset Management)
We run two types of strategies: a discretionary strategy, based on fundamental analysis, and quantitative strategies, based on algorithms. We will be dividing our investment across these strategies by about 30/70 respectively. It’s our aim to showcase Imperial’s unique value proposition – that of a technologically innovative university – in the type of investing we do. As such, our quantitative strategies are allocated a larger proportion of our available funding.
In terms of the actual investment process, equity analysts produce tear sheets, which they use to present their ideas for new investments. If approved, this tear sheet forms the basis from which they produce a proper equity research report. These tear sheets are presented at our frequent stock pitches. Then, stocks that are approved by the Executive Team are implemented within the portfolio.
There are limitations to what students can do with the investment money. Like all funds, we have restrictions on what we can and cannot invest in. For example, our quantitative strategies are run only in the US market, as such, students can only invest in US publicly listed stocks under this strategy. On the other hand, those working on the fundamental side are only able to invest in publicly listed stocks in the European market, in Euros only (e.g. not in Switzerland or the UK). In terms of specific stocks that are prohibited, we are not permitted to invest in tobacco stocks, among others. We aim to invest responsibly.
What is the criteria to enrol in this fund?
Currently, membership to the Fund is open to any Business School student. In the future, we hope to open the initiative to the wider College. The student analysts we look for must have a real passion for research and investment management, a systematic and methodical way of thinking and an analytical mind set – they should truly enjoy in-depth company analysis.
Do you think Imperial College is setting a new trend among business schools with such an initiative?
Yes – while many business schools also run student-led investment funds, they do not run quantitative strategies. As such, our fund may serve to encourage a more quantitative focus within existing and forthcoming student funds.
How will this activity prepare asset managers better?
The Fund gives students real life experience in investing and allows students to refine the practical skills required for a successful buy-side career, such as the equity research component of the fundamental strategy. Members and analysts can also attend frequent industry-led lectures to bolster their practical experience and ensure they remain up-to-date with emerging trends in the industry. For example, our most recent seminar on Practical Investment Theory was run by Ryan Shea, Head of Research at Amareos.
What is the future of an initiative such as this?
We have worked closely with the Imperial College Business School’s finance faculty, alumni relations and student experience managers to develop handover plans that will ensure that the initiative continues well beyond our graduation in September.
To ensure continuity, we are also working with the Business School’s admissions teams – and particularly the MBA cohorts – to ensure that we are attracting students who will be with the College for more than one year (as all MSc degrees are 12 months only, whereas two of Imperial’s MBA programmes are 2 years).
Our goals for the short-medium term future include growing our AUM via donors, driving sustainability by ensuring our fundamental and quantitative strategies adhere to the principles of responsible investment, and eventually, opening access to the Fund to the entire College.