The Carlson School of Management’s Golden Gopher Growth Fund received a $1 million contribution from Norwest Bank, bringing the fund’s available resources to $2 million.
The mutual fund, the only one of its kind at the University, is run by 24 second-year MBA students and was started last May. US Bancorp, the only other contributor, invested $1 million in the fund a month after its inception.
Announced Dec. 14, Norwest transferred an initial $250,000 to the University and will incrementally transfer the remaining capital as the students and their professional advisory board approve the purchase of additional stocks.
Norwest insists that the $1 million is an investment, not a donation or contribution. “It’s an investment in Norwest’s future work force,” said Teresa Morrow, a spokeswoman for Norwest who expressed the company’s plans to continue recruiting MBA graduates from the University.
Norwest’s need for skilled financiers is acute. The bank runs one of the three largest brokerages and mutual fund operations in the Twin Cities and will soon take over management of a mutual fund series belonging to its parent company, Wells Fargo & Co.
Aside from their monetary investments in the fund, both Norwest and US Bancorp have employees who serve on the Golden Gopher Growth Fund’s advisory board, which oversees and gives the final word on student investment decisions.
So far, those decisions have been slow and arduous.
Each investment decision requires a time-consuming review process. Like most professional fund managers, student managers meet with the officials of the company under review, as well as its major clients. After analyzing financial data, the fund managers present their suggestions to the advisory board for approval.
The date for full investment of the $2 million is set for December, less than half of which is presently invested.
“Right now we have more cash than we know what to do with,” said Neal Dingmann, a student fund manager.
Investing slowed further when the fund’s faculty manager, Paul Seguin, was hospitalized, and remains so, after a recent automobile collision.
There are five equity, or stock, positions in the Golden Gopher fund — ASV Inc., ATS Medical Inc., FSI Inc., Secure Computing Corp., and Urologix Inc. — as well as a marginal investment in S&P 500 SPYDRS, an index fund traded on a share-by-share basis on the New York Stock Exchange.
All companies in the fund are small-capitalization Minnesota-based companies. Because most of Minnesota’s small growth companies are in the medical technology or technology industries, as the fund matures it will likely branch out to mid-sized and large companies to retain its diversity. Dingmann mentioned Best Buy Co. Inc. and Funco Inc. as possible additions.