In fifth decade, Investment Management Club still picks winners

Although the Asset Management Program is a recent addition to the Kellogg School’s academic catalogue, Kellogg students have been honing their investment skills for decades.

A part of the Kellogg experience since the mid-1960s, the Investment Management Club gives students a unique opportunity to put their technical knowledge of markets and finance to work outside the classroom. The fund that established the club in 1964 — a donation from the Arie and Ida Crown Memorial — was originally designated for undergraduates in Northwestern University’s School of Business. Each of the sophomore, junior and senior classes was entrusted with $1,000 for its investment club to manage. As the years passed, the funds grew and merged and eventually found a permanent home at Kellogg.

Jeff Ubben ’87, a founding partner of Valueact Capital, recalls his early investing days at Kellogg: “The club fed my interest in investing,” he says. “At Kellogg, during my studies, [the school was best known for its] marketing program, yet the finance and accounting curriculum was terrific, and the club reinforced my interests in these areas.”

Ubben, who was president and chair of the club, says he often turned to Robert Korajczyk, the Kellogg School’s Harry G. Guthmann Distinguished Professor of Finance and the club’s adviser in the mid-to-late 1980s, for guidance.

Today’s IMC fund is worth more than $300,000, and club members show no signs of slowing down. Co-chair Steven Kalter ’07 says that in addition to keeping the portfolio vital, the club devotes considerable time to preparing its members to enter the field, which Kalter says “moves at lightning speed.” Club leaders review résumés and stage mock interviews with members, readying them for the barrage of tough questions specific to investment interviews. “You may think you’re a great investor,” says Kalter, “but they’ll cut through the B.S.”

Former co-chair Lisa Haas ’98 says that aspect of the club has served her well. “One skill I gained from the IMC was the ability to present and ‘sell’ an investment idea,” she says. “In the professional arena, convincing your associates of your investment thesis is just as important as valuation and formation of the investment thesis. The IMC provided a forum to practice public speaking and to defend ideas in a very non-intimidating environment.”

While some investing fundamentals are not decade-specific, others shift over time. Echoing Kalter’s sentiment about the rapidly increasing pace of the market is Gary Dvorchak ’92, a managing partner at Global Financial Private Capital LLC: “The main difference is probably the speed at which you can gather information. Back [in the early 1990s], to read a company's 10-K and other filings, you needed to call or write them and have them mail you a copy; now it’s all available instantly on EDGAR Online and other Web sites. There is really no advantage now in basic information gathering, so the game has changed into a mix of exercising better macro judgment (in large-cap stocks) to smart ‘on the street’ research for small caps that might be under-followed by Wall Street.”– Aubrey Henretty

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