Author: Haas News

Despite the wild ride for US equities, the student-run Haas Socially Responsible Investment (SRI) Fund outperformed the stock market during its first full year of operation.

The invested portion of the Haas SRI fund returned -11.4 percent during its first full fiscal year, from May 1, 2008, to April 30, 2009, which was one of the worst periods for US equity markets. Including the fund's large cash position — 69% of the more than $1 million fund as of April 30 — the fund's return was even better, at -3.5 percent.

Although the fund lost value, it outperformed the benchmark Standard & Poor's 500 Index, which tanked by nearly 40 percent during the same period. If the students had invested in the S&P 500 in the same amounts and times as when they bought their individual stocks, the S&P 500 index return would have been -15.1 percent.

"While it's never fun to be down, I think we've done a good job managing the fund in these turbulent times, as the invested portion of our account is easily beating the S&P 500," says Matthew Blair, MBA 09, one of the fund principals. "All of our stock ideas are long-term in nature, so it will take a few years to get a handle on how the fund is performing."

In addition to Blair, the fund’s second portfolio management team consisted of Ben Biddle, Megha Doshi, and Brandon Purcell, all MBA 09; and Eugene Pauksta, Mike Simmons, and Aiphi Wang, who graduated from the Master's in Financial Engineering Program this year.

They were joined in the spring semester by first-year MBA students Anup Anajpure, Jenny Hsieh, Amanda Murnane, Brendan Nemeth-Brown, Jeffrey Olson, Adam Valainis, and Harvey Villarica, and first-year MFE students Russell Elliott and Phillip Gillespie.

The Haas SRI fund is the first student-managed investment fund at a top business school to use socially responsible criteria. The fund launched in fall 2007, thanks to donations from three Haas School alumni.

Since last May, students have invested in 10 companies, including such well-known names as Nike, PG&E, Cisco Systems, and Berkshire Hathaway. The fund also invested in some lesser-known companies, such as recycling firm Darling International, which the students describe in their annual report as having "a dominant position in one of the most disgusting industries imaginable: the rendering and recycling of animal waste products and grease."

To make their investment decisions, the fund principals met at least 2 hours each week to discuss stocks ideas. After an idea was formed, one or two principals would read more about the company, analyze financial statements, research the industry, build a financial model, and often reach out to company representatives. The students then would create a comprehensive report and present the stock to the whole team for questions and perhaps a vote.

For more information about the Haas SRI Fund, visit haas.berkeley.edu/responsiblebusiness/HaasSRIFund.html.

Lloyd Kurtz, an adviser to the Haas Socially Responsible Investment Fund, meets with four of the fund's principals (from left to right): Megha Doshi and Matthew Blair, both MBA 09; and Eugene Pauksta and Aiphi Want, both MFE 09.

Two Haas graduates from the class of 2009 appear to have found grounds for a sustainable venture — coffee grounds, that is. Nikhil Arora and Alejandro Velez (pictured) recently launched BTTR Ventures, a firm dedicated to turning coffee grounds into a gourmet edible: specialty mushrooms.

Arora and Velez walked away from job offers in investment banking and consulting in order to focus on making an impact in their community. Their firm's name BTTR, pronounced “better,” stands for “back to the roots,” a phrase the pair chose to encompass their ideal of creating a company that stands for sustainability, progress, and social responsibility.

BTTR Ventures won in the Partnerships for Social Innovation category of the UC Berkeley 2009 Bears Breaking Boundaries Social Venture Competition and has been using the $5,000 award money to help fund their initial operations. The firm launched in the Bay Area with offices and a mushroom growing facility in Emeryville, and already has begun laying the groundwork for expansion into the Los Angeles market.

Coffee grounds are one of the largest waste streams in America. Coffee purveyors such as Peet’s, Café Strada, and Café Milano are on board to provide the coffee grounds that will become substrate, an enzyme-rich growing base for the mushrooms. BTTR's first large client is A & B Produce, a large Bay Area mushroom wholesaler, lined up to purchase more than 100 lbs. of oyster and shitake mushrooms weekly. Arora and Velez are also in final negotiations to sell their mushrooms to over 20 high-end grocery stores by the end of the summer.

Beyond the sustainable approach of using trash to produce a sought-after product, Arora and Velez aspire to provide urban jobs, prevent thousands of tons of valuable waste from being dumped into landfills, and donate a substantial portion of profit back into the communities where the coffee ground waste originated. The pair is working with Gunter Pauli of the Zero Emissions Research and Initiatives Foundation and two award-winning mycologists, who have trained 10,000 individuals in Africa and Colombia in sustainable farming methods.

Inspiration for the venture struck in Lecturer Alan Ross’ business ethics class, where Arora and Velez first met. Pauli from the Zero Emissions Research and Initiatives Foundation gave a guest lecture in the course on how rural women in Colombia and Africa were using coffee pulp to grow mushrooms as a means to fight malnutrition.

“Alex and I were inspired to see how we could use this newly learned fact to turn waste into high-end mushrooms in coffee-addicted urban America,” Arora says. “With the economic and environmental ruin we're currently in, it's clear we need to rethink the way we do business, to create closed-loop entities that work with the environment, not against it. And there's no better place to start than here in the Bay Area."

The Center for Responsible Business (CRB) is launching a new undergraduate scholarship funded by Give Something Back Business Products in honor of the late actor and philanthropist Paul Newman.

The Give Something Back CSR Scholarship will be awarded to an incoming Haas School undergraduate with a commitment to corporate social responsibility (CSR).

Give Something Back Business Products, the West Coast's largest independent office supplier, is establishing the scholarship in honor of Newman, founder of Newman's Own products, to recognize his commitment to business’s role in creating positive change in the world. Newman's Own donates all profits after taxes from its products — from salad dressing to dog food to wine — to charity.

The scholarship, the first of its kind offered to a Haas undergraduate, will provide $5,000 per year for two years. The recipient will be a need-based candidate who exhibits a strong interest in corporate responsibility, comes from an underserved geographical location, and demonstrates outstanding leadership potential.

Applications from incoming Haas undergraduates will be accepted in July. The scholarship recipient will be notified by early August and will be required to take CSR-related courses and maintain a minimum GPA while at Haas.

Newman inspired the founding of Give Something Back, which is based on the Newman’s Own model of giving back to the community. Newman was also a founding funder for the Haas School’s Center for Responsible Business, helping to launch the John C. Whitehead Faculty Fellowship in Corporate Responsibility. Newman, known for his role in such movies as Butch Cassidy and the Sundance Kid and Cool Hand Luke, passed away last September.

"Dad would be pleased that Give Something Back, a company he inspired, and the Haas School of Business’s Center for Responsible Business have honored him with this scholarship that will help students expand their education in corporate responsibility,” says Nell Newman, Newman's daughter and co-founder and president of Newman’s Own Organics.

For more information on the scholarship, visit haas.berkeley.edu/responsiblebusiness.

Despite a challenging hiring environment, more than 60 percent of graduating full-time Berkeley MBA students have received a job offer or accepted a position, according to MBA Career Services.

Among undergraduates, the Big Four accounting firms are hiring the most Haas students after graduation. Firms overall are placing a strong emphasis on converting interns into full-time employees, according to Tom Devlin, director of Berkeley's undergraduate Career Center.

Full-Time MBA Prospects

Starting salaries for full-time MBA graduates are holding steady, according to MBA Career Services, but overall compensation, which typically includes signing bonuses, may be down a bit this year when the final results are in.

Top employers include Adobe Systems, Amazon, Boston Consulting Group, and McKinsey and Company. Career Services account managers continue to mine their industry relationships to unearth opportunities for students. While on-campus recruiting is still down from last year, online job postings for full-time MBA students have gone up this spring compared to a year ago.

While fields such as real estate and financial services have taken a hit this year, as expected given the economy, Berkeley MBA students have used their career development skills to find internships and full-time positions in other industries, doing particularly well in the consulting, health care and the energy sectors, according to Career Services. The companies hiring the most interns include Abbott Laboratories, Amazon, Apple, Kaiser Permanente, McKinsey, and Microsoft.

MBA Career Services has added new offerings to help students even more during the tough economy, including directed job search teams facilitated by Haas Career Center advisors as well as Haas faculty and staff and new premium programs such as a workshop called the Art of Bragging, led by Fortune 500 communications coach Peggy Klaus.

PhD Graduates

Seven students in the PhD program have landed assistant professorships in the US and abroad. In the US, graduates will teach at NYU, Santa Clara University, Vanderbilt, Yale, and Rutgers. Two graduates are heading to Europe, to the University of Navarra's business school in Spain and INSEAD in France. One PhD graduate will work as a post-doc at Stanford University's Shorenstein Asia Pacific Research Center, working in the field of comparative health policy.

Undergraduate Trends

Undergraduates are assuming positions with a wide variety of employers, ranging from the Blackstone Group to Adobe Systems to Royal Bank of Canada, according to Devlin in the Berkeley Career Center, which serves Haas undergraduates.

Overall, employers are more selective in their hiring both on the internship and the full-time level. In some cases, rather than rescinding offers, employers have deferred start dates for their new hires, which reinforces their commitment to employing our graduates, Devlin says.

"Students have become more flexible in their job search in terms of industries and targeting a broad range of employers," Devlin says. "It surely is the year of multiple strategies, patience, and persistence in the job search. We are advising students to have a Plan A and a Plan B and to leverage their networks, student organizations, and the vast resources of the Career Center.

Berkeley's undergraduate Career Center also has stepped up its efforts, adding more drop-in counseling sessions focused on job search tactics in a tight economy, mining new contacts to attract employers to campus, and marketing electronic resume books to employers and students.

Paul Savage, an employee relations specialist for business students, has offered "pop-ins" this spring for group resume critiques, mock interviews, and strategizing on managing a job search during these challenging times.

Networking

In this economy, networking can make a big difference in getting an interview and a job, agrees Abby Scott, executive director of MBA Career Services. "You want to be a referral rather than a resume in a stack of resumes," she says.

Despite the recession, it's still not unheard of for students to get two job offers. Silvia Lacayo, MBA 09, will be moving to New Jersey in August to work as a brand manager at Unilever, but also received an offer from Del Monte, where she had an internship last summer.

Extending your job search beyond on-campus recruiting can help, advises Lacayo. Unilever called her for an interview after she submitted her resume to the company at the Reaching Out Conference in Washington, DC, in October.

"Go to these conferences," she says. "It just pays off."

For the first time in four years, Imagical, the Haas-sponsored chapter of the American Advertising Federation, has won the West Coast regional finals of the National Student Advertising Competition.

The chapter's 36 members will travel to the nationals, provided they can raise the funds to do so.

The team beat out six other schools at the qualifying competition in Berkeley April 15 with an innovative public service campaign, “Call the Shots,” to help decrease binge drinking on college campuses.

“Most schools told people directly ‘Don’t binge drink.’ We used the drinker’s friends,” says Esther Hwang, BS 09, the organization’s creative coordinator. “In the spirit of the 'friends don’t let their friends drive drunk' campaign, we told them when you see a friend overdrinking alcohol, you’re going to be the one who calls the shots.”

Imagical spent the entire year creating the campaign, which uses a variety of media from bus shelter hologram ads and email newsletters to viral videos. To prepare, they studied the effectiveness of three binge drinking campaigns (B4U Drink, Alcohol 101 and That Guy), surveyed 1200 college students at 84 campuses, and conducted 150 in-depth interviews.

This year’s competition sponsor is the Century Council, a national nonprofit funded by distillers dedicated to fighting drunk driving and underage drinking. The finals will take place at the American Advertising Federation’s national conference June 4 to June 6 in Washington, DC.

With less than one month to go, Imagical is campaigning for funds to attend the competition. The team needs about $7,000, but has only raised $2,000, mostly from local businesses, faculty, and the school community. Hwang says it’s a good investment.

“For Haas to be represented at the nationals would be really great,” says Hwang. It should also pay personal dividends. “There are a lot of corporate sponsors, like Pepsi, who come not just to watch the competition but to recruit as well.”

For more information or to donate to the team, email Esther Hwang at [email protected] or chapter President Erica Pang at [email protected].

Eric Rodriguez, BS 09/BA 09 (economics), won the curriculum innovation category of the Bears Breaking Boundaries Competition for a proposal that brings economics and business disciplines together to improve the impact of philanthropy.

Rodriguez proposed a course called The Economics and Business Perspectives of Philanthropy, which beat out 28 other submissions in the curriculum innovation category.

The competition is organized by the Berkeley student government (ASUC) and Big Ideas@Berkeley, an online marketplace supporting UC Berkeley students who have “big ideas.” Bears Breaking Boundaries aims to encourage the next generation of research, education, and service activities on the UC Berkeley Campus through a series of "idea competitions."

Rodriguez's interdisciplinary undergraduate business course would prepare students to make educated decisions as future nonprofit leaders, policy makers, and philanthropists. “With resources more constrained than ever, there is an even greater need to identify and prioritize nonprofit projects that have a high return in social benefit on dollars invested,” says Rodriguez.

Judges hailed the course topic as “truly compelling and completely relevant.”

Erika Walker, executive director of the Haas Undergraduate Program, adds, “Eric is an excellent example of a student who truly understands the notion of leading through innovation. His foresight has the potential to change the development and perspective of our future philanthropists."

Three fellow members of the Beta Alpha Psi business fraternity will work on making the class a reality after Rodriguez graduates.

By considering every stakeholder from scientists to circus performers (and impressing comedian Dave Chappelle along the way), UC Berkeley students held onto the coveted Golden Shovel trophy as they won the Cal-Stanford NAIOP Real Estate Challenge for the second year in a row.

For 20 years, teams from Stanford and UC Berkeley have been competing in three events during the semester and then presenting an extensive real estate development proposal to a jury of seven industry professionals. The competition, sponsored by the San Francisco Bay Area chapter of the National Association of Industrial and Office Properties, was held this year at the Four Seasons Hotel in San Francisco on May 5.

Berkeley’s winning team included evening and weekend MBA student Eric Ramm, MBA 09; full-time MBA students Zach Chan, Will Hu, and Bao Vuong, all MBA 10; and graduating environmental design student Behn Farahpour. The Cal team won the audience choice award as well as the judges’ award, bringing the lifetime score for the competition to Cal-11, Stanford-9.

The competition challenged teams to create a comprehensive redevelopment proposal for Piers 19 to 23 on San Francisco's northeast waterfront. Proposals include entitlement strategy, leasing strategy, financing, highest and best use of the site, and stakeholder interests. “Essentially, we do in seven weeks what a developer would normally do over two to three years with a full staff,” observes Ramm.

The team’s winning proposal was an office/retail/restaurant project called Telegraph Piers. “We played off the fact that the Exploratorium will be moving to Piers 15-17, bringing new visibility to this stretch of the waterfront,” says Ramm. “We knew we needed something to attract the families, field trips, tourists, and people interested in science who would be coming to the area.”

In response, the group proposed an exhibit hall that could showcase tangible outcomes of the science showcased at the Exploratorium, such as the electric sports cars made by Tesla Motors.

Additionally, the group uncovered that Teatro Zinzanni, a mix of European cabaret and cirque, would soon be searching for a new home — and invited the arts group into the project as an additional attraction. The team also envisioned waterfront offices for green technology companies.

As proof that the team made a compelling presentation, comedian Dave Chappelle, in town for a performance, happened to be in the Four Seasons lounge when the team was rehearsing and stayed to hear the entire dry run. “He asked a lot of intelligent questions,” Ramm recalled. Tongue firmly in cheek, Ramm joked, “We may have had an edge when we told the judges our proposal had been vetted by Dave Chappelle.”

Haas for Students has received a record number of applicants this year seeking funding help for their internships in the nonprofit and public sector.

Seventeen students have applied to receive funds from the annual Haas for Students campaign. The campaign asks students with private sector summer internships to donate a day's salary to help cover basic living expenses for first-year students with nonprofit or public sector summer internships who will receive a sub-market salary.

The idea behind the campaign is to level the playing field so that there is less disincentive for students to work in the nonprofit field or public sector, explains organizer Jason Hirschhorn, MBA 10.

Haas for Students has raised $29,018 through student donations, while the campaign goal is to raise $33,000. Student organizers held a Scotch and bourbon tasting event last week as part of the campaign.

Thirty percent of the first-year class has donated to the campaign; second-year students are encouraged to donate, too.

"I give to reward the implied commitment someone is making to the public sector as a long-term career," says Sean Simplicio, MBA 10, who worked in the public sector before coming to Haas. "We should do all that we can to encourage bright people to enter the sector."

The organizations that applicants will work for include Coral Reef Alliance, the only international organization working to protect the planet's coral reefs; Education Pioneers, which develops leaders to improve and transform urban K-12 education; and Agora Partnerships, which fights poverty and inequality by unleashing the potential of developing world entrepreneurs. Six applicants will work in developing countries.

Students can donate a day's salary online at givetocal.berkeley.edu/egiving/index.cfm?Fund=FN1218000. (Make sure you enter 10265-55608 in the “Special Instructions” box.)

For more information, please contact Jason Hirschhorn, MBA 10, at [email protected].