Eighteen Berkeley MBA students demonstrated their finance acumen Friday as they presented trading strategies developed for the Haas Hedge Fund class to outside judges in San Francisco.
The students, divided into three teams, competed for a total of $30,000 to invest as part of Associate Professor Christine Parlour's full-time and Evening & Weekend MBA course, officially known as Portfolio Management. In the spring, these students will have a chance to make actual trades with the funds from the competition.
The strategy that most impressed the judges was presented by a team called Alpha Life, which proposed combining their technical expertise with their specialized knowledge of the pharma and biotech industries to predict merger and acquisition activity and take advantage of consolidation. The team consisted of Evening & Weekend MBA 2011 candidates Aoyu Chen, Michael Greene, Michael Li, Jay Parrish, Anil Rao, and Anoobhav Singh. The team will receive approximately 40 percent of the overall funds to invest.
"Facing the pros was a great experience. They certainly jumped right on us to dig deep," says Li. "We learned a great deal from the judge's feedback, and I personally learned tons from my teammates in this class as well."
The second-place Haas Hedgehogs will receive 33 percent of available funds to trade stocks that moved in after-hours trading. The third-place Golden Bears will split their 27 percent of overall funding between fixed-income bets and bets on cloud computing.
"The presentations were all very solid," says Ralph Goldsticker, managing director of strategic investments at Mellon Capital Management, which hosted the event Friday at its downtown offices. "The students were able to link their work experience from their careers into their projects, and then they took the academic side that they learned in the classroom and brought it all together."
After a brief respite, the students will move on to the next phase of the full-year course: setting up their trading accounts and implementing their strategies in during the spring semester.
Parlour launched the Haas Hedge Fund class last spring as a pilot program with seven students. It came in response to the Haas Finance Club's strong desire for an investment fund, Parlour says.
"What the students do is try to synthesize what they have learned up to this point about finance to create a trading strategy," Parlour explains. "Then, after the competition, everyone will have the opportunity to put some money behind their ideas and gain trading experience."
Unlike the Haas School's Socially Responsible Investment Fund, students participating in the Haas Hedge Fund do not have any restrictions on what they can invest in (within federal rules, of course) and can take short positions.
Students have access to software donated by Barra and Thomson/Reuters.
In addition to Mellon Capital's Goldsticker, the panel of judges this year consisted of Ryan Lafond, head of Asia equity research at Barclays Global Investors; Haas School Professor Emeritus Terry Marsh, co-founder and CEO of Quantal International and Quantal Asset Management; and Bob Meade, director of investments at Ronin Capital.