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Who wants to be a millionaire?

by Archives February 14, 2001
Want to know what it’s like to manage $1 million?
Ask a group of students in a new investment program recently established at Concordia. A select group of eight students from Concordia’s John Molson School of Business made their first professional trade and launched a new investment management program funded by a $1 million gift from former alumnus, Kenneth Woods, MBA ’75.
The students bought five different stocks on Feb. 1 and plan to be fully invested with a diversified portfolio by April 1.
The students are the first in the Kenneth Woods Portfolio Management Program (KWPMP), a two year, extra-curricular program that combines practical experience with mentoring. It is designed to give business students a ‘hands on’ experience in day-to-day investment management.
The primary purpose of the portfolio management program is to allow students in investment management to be responsible for the selection and management of an investment portfolio using actual funds.
Expanding on theory
“In the classroom, we teach a lot of principles and a lot of theory which is very important for practical use, but we are going one step beyond this. In this program, we are saying let’s put theory into practice and have students run real money and have them manage a portfolio with the objective of maximizing returns with a minimum level of risk,” said Lorne Switzer, Chair of the department of finance.
Students have access to three mentors each, drawn from a group of highly qualified professionals who have diverse areas of expertise in the investment management community. These professionals are drawn from companies such as the Caisse de Depot (Quebec’s public pension fund), CIBC World Markets, Formula Growth, Goodman and Company, Jarislowsky Fraser, Nesbitt Burns, Scotia Capital, Standard Life and TAL.
Despite the mentors’ busy schedules, the students work and meet with them on a regular basis.
All the students interviewed were very enthusiastic about the mentor relationship and felt it was extremely valuable to them. “They give us the benefit of their experience and the knowledge they have acquired through their own successes and failures. They are a great asset in helping us, in providing a support system and guiding us with future career decisions. The contacts we are making now are invaluable and the network is incredible,” said 22-year-old student Alka Patel.
Mentoring remains an important aspect of this program. Woods, co-founder and vice-chair of a major Canadian investment counselling firm, made the donation in memory of his own former professor and mentor at Concordia, Dr. Calvin Potter. Accordingly, graduating students from the program will be referred to as Calvin Potter Fellows.
Free to choose
Besides their mentors, students work closely with faculty in the department of finance and a client committee who oversee the funds.
Members of this committee include the chief investment officers from major investment funds, including CN Investments and BIMCOR Inc.
The students are totally autonomous in their choice of the funds within the portfolio and are subject mainly to criteria they themselves established prior to the program launch.
They were also required to develop an investment philosophy describing their style of investing and to establish investment policies which set guidelines for their choices in the portfolio. These were approved by the client committee who act as consultants and “keep us on track and oversee the direction we take,” Patel said.
“We have to support our decisions with arguments, show our research and basically prepare reports for each company we select. They read through the reports and question us. We just have to prove we’ve done our ‘due diligence’. They wouldn’t stop us unless it doesn’t comply with our own criteria and guidelines,” said Andreea Constantin, age 22.
Every year, eight students will be selected to join KWPMP for a two year period. “The idea is to keep the program small, because in the real world, that’s how portfolios tend to get managed – by small intimate teams of bright minds,” Switzer said.
Entry level students to the program must have successfully completed their first year in Concordia’s Bachelor of Commerce degree or Bachelor of Administration degree program and have completed the Canadian Securities Course. They are students with excellent academic credentials who have undergone an interview process to demonstrate their communication skills. They will act as research associates assisting the second year students who will be the portfolio managers.
Each student in the KWPMP is expected to give a significant amount of time to the daily management of the portfolio. Time is a big factor and is best explained by Constantin. “You have to be prepared to put a lot of hours into it and should really think about this before getting into the program. I would ask people first if it’s their passion, because for me it is a passion. I think it is for most people in the group… so it already is part of our life.”

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