Even though it’s losing money, the student-run Golden Gopher Growth Fund, now in its third month of operation, is paying off for the students who run it.
Second year master’s of business administration candidates who work on the $2 million fund are gaining valuable money management skills that are proving especially marketable to employers.
Created this spring, the program allows finance students to run a mutual fund with real currency. Program sponsors US Bank and Norwest each contributed $1 million to the project.
Of the 20 or so students who worked on getting the fund up and running, all but two landed jobs directly after finishing their MBA work, said sources involved with the fund.
Students research the stocks and make a proposal before a board of eight local bankers from companies that include American Express, Piper Jaffray and Voyageur Asset Management. If approved, the stocks are bought into the fund and the students monitor their progress.
One of the strong points of the money management program is that students can go and look at these companies and meet with their directors, said Neal Dingmann, an MBA candidate who has worked on the fund since late May.
Most other schools with similar programs only have their students run data, analyze numbers and do most of their work in classrooms, he said.
“(Interacting with local companies) is more exciting than the analysis alone. Down the line at least, it is going to be a big selling point for the program,” Dingmann said.
Close contact with companies and working with large sums of money is a great way for students to get their foot in the door for future job leads, Dingmann added.
The same holds true for MBA candidates in the management program at the University of Texas. Established in 1994, the $10 million fund has been a model for institutions interested in an asset management program, including the Carlson School of Management.
“Almost every (student) fund manager we’ve had has been recruited by fairly large investment companies,” said Angela Dorsey, administrative associate for the school’s trading center. She named Lehman Brothers, Merrill Lynch and Goldman Sachs as some of the Wall Street heavies recruiting students.
“We’ve had two big things that have hit us,” said Dorsey. First, companies started recruiting directly from the University. Secondly, in a race to scoop up the students, companies are calling in to request the rÇsumÇs of the fund managers enrolled in the program, she said.
Though the Carlson School’s program isn’t as entrenched as that of Texas, local companies are keen on the opportunities that come with having a student money management program in town.
“By contributing to the program, Norwest can get close to these students and it gives us potential employee candidates,” said Rick Villars, a senior managing director at Norwest who was instrumental in their $1 million investment in the Golden Gopher fund.
So far, about $600,000 of the fund’s $2 million in seed money has gone into the purchase of six Minnesota micro-cap stocks — companies whose stock totals $500 million or less.
The remaining $1.4 million will be invested this September.
As of July 1, the fund is down 6.54 percent. Its best performing stock, ASV Inc, is up 22.14 percent since its purchase in May. The dog of the fund is Ciprico, a company with award-winning products but an unpopular stock: So far it’s down 40.73 percent.
Unlike a standard mutual fund open to any investor with a check-book, all profits or losses of the Golden Gopher fund will fall on the sponsors, Norwest and US Bank.
The fact that the fund isn’t in the black isn’t worrying people. “From the looks of things, people are pretty happy with how it’s going,” said Dingmann, who like the others involved, places importance on the learning experience, not the profit.