Smeal College Students Begin Managing Unique $2 Million Investment Fund

UNIVERSITY PARK, PA (January 31, 2005)—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.

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 Smeal Dean Judy 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. 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 S&P sectors such as information technology, energy, and healthcare. 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.

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 state-of-the-art Trading Room.

“The managers of the Nittany Lion Fund are among Smeal’s most talented and driven students,” said Professor of Finance J. Randall Woolridge, CEO of the fund. “To be a part of this highly selective initiative not only requires an aptitude for equity research, trading, and economic analysis, but also an enormous investment of time and energy beyond the typical demands of college.”

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 as the fund CEO; and Olian in an ex officio capacity).

Additionally, an Oversight Committee comprised of active money managers advises the students on their investment strategies.

The Nittany Lion Fund is the latest innovation in Smeal’s educational program for students. In 2001, the college opened the Smeal Trading Room, a technologically advanced facility with live financial data feeds, ticker displays, and 45 trading stations. In 2003, the Trading Room served as host to the Global Trading Competition, an event featuring a field of more than 140 participating students representing 42 universities and eight countries from around the world.

Learn more about the Nittany Lion Fund at www.smeal.psu.edu/fund or visit the Penn State Investment Association at www.clubs.psu.edu/up/psia.

REPORTERS & EDITORS: For more information, please contact Wyatt DuBois in the Smeal College of Business Media Relations Office at 814-863-3798 or wed112@psu.edu.

Penn State's Smeal College of Business offers highly ranked undergraduate, MBA, executive MBA, Ph.D., and executive education opportunities to more than 5,500 students at all levels. Featuring academic departments of accounting, finance, marketing, insurance and real estate, management, and supply chain and information systems, the college is also home to major research centers such as the Center for Supply Chain Research, the Institute for the Study of Business Markets, the eBusiness Research Center, the Farrell Center for Corporate Innovation and Entrepreneurship, the Center for Global Business Studies, and the Center for the Management of Technological and Organizational Change.

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