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Penn State Students to Manage $2M Investment Fund
"UNIVERSITY PARK, Pa. -- Investors have placed more than $2.2 million into the hands of students at Penn State's Smeal College of Business. With the launch of the Nittany Lion Fund, an investment portfolio designed to achieve long-term capital growth for investors, students are provided a learning experience that is as real as life in the financial-services sector, according to Judy Olian, Smeal College dean.Although many business schools offer student-managed investment portfolios of various types and sizes, the Nittany Lion Fund is distinct because it is structured as a limited liability company with investor dollars and not as a fund carved from endowments or donations. "The Nittany Lion Fund brings decisions and accountability to the student experience that are true to life, where due diligence and careful analysis become supremely important because of the real money at stake," said Olian, an ex officio member of the fund's board of directors. "By investing more than $2.2 million, alumni and friends of Penn State have helped create a learning experience that will further prepare students to handle the situations they will face after graduation."To qualify, each Nittany Lion Fund investor has committed a minimum of $25,000, Olian noted. The investment strategy is focused on undervalued companies with a minimum market capitalization of $800 million. The student fund managers are aiming for holdings of 30 to 40 stocks at any given time, with a buying strategy focused on companies with consistent or rising earnings growth and compelling business strategies.As part of the fund's structure, undergraduate lead analysts oversee equity research conducted by 10 student teams, each of which focuses on Standard & Poor's sectors such as information technology, energy, and health care. Other student teams analyze the portfolio's overall performance, execute trades, and monitor compliance with policies and procedures. Smeal MBAs are also involved in the fund, providing macro economic and sector analysis to the equity research teams and handling investor relations, Olian said.On a weekly basis, the lead analysts present investment recommendations to the fund manager team, which includes officers and directors of the Penn State Investment Association, other lead analysts, and other student fund managers. All investment decisions are then made by the fund managers, with all students relying on the tools and resources of Smeal's trading room, said J. Randall Woolridge, professor of finance and fund chief executive officer.Nittany Lion Fund oversight is being handled by a board of directors: Chairman Edward Hintz, president of Hintz, Holman & Robillard; David Branigan, executive director of Penn State's Office of Investment Management; Arthur Miltenberger, retired executive vice president and chief financial officer of the Richard King Mellon Foundation; J. David Rogers, founder and managing member of JD Capital Management; Woolridge and Olian. Additionally, an oversight committee comprised of active money managers advises the students on their investment strategies.In 2001, the college opened the Smeal Trading Room, a technologically advanced facility with live financial data feeds, ticker displays, and 45 trading stations, Olian noted."