Student Managed Investment Fund

The three members of the Bucknell Investment Office visited the SMIF to discuss their management of the University’s endowment. Students were joined by John Luthi, the Director of Investments for the school and a 2004 Bucknell graduate. In his role at the University, Mr. Luthi is responsible for managing the University’s endowment, which entails research, developing investment strategies, performing due diligence on investment managers, asset allocation, as well as monitoring portfolio performance and risk. Also visiting were Derek Varner, who joined Bucknell in 2015 as the Associate Director of Investments, and Angela Motto, who assists with investment and cash management, investment performance reporting, and conducts research and implementation of special investment products as the school’s Investment Operations Analyst.

While visiting the class, the three discussed the responsibilities associated with each of their roles and the unique challenges of managing a university endowment with distinct requirements for cash outflows. They were also briefed on the progress of the SMIF and some of the key decisions made in recent months by students.

Jeffrey Dong ’19 pitched Alibaba Group Holding Ltd. (NYSE: BABA) to the Student Managed Investment Fund (SMIF) on November 6, 2018. Founded in 1999, Alibaba is a Chinese multinational holding company that specializes in core commerce, digital media & entertainment, financial services, cloud computing, and innovation initiatives. Alibaba focuses on providing transformative and efficient avenues for smaller businesses and individuals to connect and engage with their users. By leveraging technology and innovation, Alibaba strives to create the future infrastructure of commerce. With its established platforms like Tmall and Taobao and strategic acquisitions in growth sectors like cloud computing, it will continue to grow its active consumer base domestically and globally, especially in Southeast Asia, Europe, and Africa. Alibaba has key stakes in a wide variety of subsidiaries and ventures around the world like Magic Leap and Paytm Mall, and their immense global presence in local communities allows them to deliver the services needed to help businesses grow and compete on a global scale. The class voted to buy 70 shares of Alibaba at $149.75, making BABA more than 1% of Tuesday SMIF’s portfolio.

Bennett Turner ’19 pitched Anthem (ANTM) to the Student Managed Investment Fund (SMIF) on October 30, 2018. In October 2001, Anthem demutualized and conducted an initial public offering of common stock. Anthem, Inc. merged with WellPoint Health Networks in 2004. At the time of the merger, the parent company assumed the name WellPoint, Inc. In December 2014, WellPoint changed its name to Anthem, Inc. Anthem is a health benefits company that provides health, pharmacy, life insurance, medical insurance, as well as a host of other products to consumers. They offer a wide range of managed care plans to commercial businesses and government organizations. Through its subsidiaries, Anthem provides coverage to over 40 million Americans. The introduction of the IngenioRx pharmacy business, the Walmart partnership, the M&A growth strategy, moving away from the ACA marketplace, and low medical costs will continuously allow Anthem to gain significant market share amongst its competitors. The class voted to buy 70 shares of ANTM at $264.00.

Adam Rueda ’19 pitched Costco Wholesale Corporation (COST) to the Student Managed Investment Fund (SMIF) on October 22, 2018. Costco is an American, multi-national corporation that manages 700+ membership-based warehouse clubs that continue to provide their customers with the best prices and savings over a wide variety of products and services. Costco first went public in 1985 and has not slowed down since. Costco pulled in more than $120 billion in revenues in fiscal year 2017 and sport a 90% membership renewal rate in the US. Costco continues to lead the way in terms of operating and logistical efficiencies and passes these savings onto their faithful members worldwide. Costco boasts 94.3 million members over 11 countries ranging from the US to Canada to Taiwan. Costco was rated #1 in Forbes’ “America’s Best Large Employers” above Google and Penn Medicine. The large corporation remains extremely active in the communities and environments they impact. As Costco continues to build stores in new markets as well as increase store traffic, Costco is truly a premier company from top to bottom. The class voted to buy 50 shares of Costco, making COST more than 1% of Monday SMIF’s portfolio.

Toby Cozzolino ’19 pitched Invesco (IVZ) to the Student Managed Investment Fund (SMIF) on October 23, 2018. Founded in 1935, Invesco manages nearly $1 trillion in investment assets for retail and institutional clients. The firm’s primary investment categories include equities, fixed income, alternatives, money market, and balanced funds. The company has a robust lineup of actively managed investment funds with a growing presence in passive products. Management looks forward to driving growth through a variety of revenue streams, including multi-asset & alternatives, traditional & smart beta ETFs, and digital investment services. The company has experienced above-average organic growth while also promoting expansion through a series of strategic acquisitions. Following Invesco’s expected acquisition of OppenheimerFunds in the second quarter of 2019, the combined firm will manage a total of $1.2 trillion in client assets. The class voted to buy 700 shares of IVZ.

Susan Valenti, a Managing Director at Wells Fargo and member of the Bucknell class of 1984, returned to her alma matter to join the Student Managed Investment Fund on October 22nd and 23rd. Ms. Valenti, who graduated with a degree in mathematics, has enjoyed a long and successful career in the finance world where she has focused primarily on the securitization of residential and commercial mortgages. She began her career as an analyst for Salomon Brothers. Her experience includes positions at Bear Sterns, GE Capital, and Deutsche Bank. Ms. Valenti has been a part of Wells Fargo since 2010 and is currently responsible for client relationships and transaction execution for the securitization of private label residential mortgage loans and structured lending facilities.

During her time with SMIF, Ms. Valenti described her career path and explained many of the technical aspects of her responsibilities. She also offered students her perspective on current economic conditions and her assessment of the housing market and its impact on current economic probabilities.  Ms. Valenti observed the presentation of the SMIF Economic Committee and discussed student’s academic and professional goals.

Jeff Gottesman ’19 pitched Morgan Stanley (MS) to the Student Managed Investment Fund (SMIF) on October 15, 2018. Morgan Stanley is one of the largest banks in the world with some $865 billion in total assets and a market cap of around $80 billion. MS provides people, companies, and institutional investors the financial products and services they need to achieve their financial goals. Morgan Stanley’s three main business segments are institutional securities, wealth management, and investment management. The majority of the company’s revenue is generated by their investment banking, trading, and asset management services. The company’s strategy under the leadership of James Gorman has been to emphasize more stable businesses like wealth and asset management and de-emphasize riskier and less predictable businesses like stock and bond trading. Additionally, MS has been focusing on the reduction of their expenses and has increased margins in all three business segments. MS plans to return value to shareholders through stock repurchases and increased dividend payouts. The class voted to commit 1.90% of the equity portion of our portfolio to Morgan Stanley.

Bucknell alumnus David Granson addressed the Student Managed Investment Fund (SMIF) on Tuesday, October 1 as the first guest speaker of the 2018-19 year. Granson, who graduated Bucknell in 1993 with a B.A. in political science and history, is a Managing Director at Goldman Sachs and a professor of fixed income at Georgetown University. Mr. Granson joined Goldman Sachs in 1997 and was named a Managing Director in 2012; as part of the firm’s Investment Management division, he advises endowments, pension plan sponsors, and other tax exempt entities, as well as high-net-worth families and private companies.

Mr. Granson shared his perspective of current economic conditions and offered predictions for the coming year, as well as the reasoning underlying his forecasts. He also discussed his path to Bucknell and from Bucknell to Wall Street, advising students to work to develop their careers on a daily basis.

Mr. Granson joined SMIF students for lunch, where he shared stories of his time at Bucknell and advised students on planning for their futures in the workforce.