FIU business students who aspire to work as bond traders/analysts – some of Wall Street’s most demanding jobs — will have an opportunity to build their skills using real research and real money, thanks to a new class featuring a $300,000 investment from FIU.
This spring marks the start of the new Student Managed Fixed Income Fund class (FIN3561), one of only two experiential fixed income classes known to be offered at Florida universities. It will be taught by Mark Del Pezzo, CFA and Department of Finance instructor who previously managed portfolios in excess of $1 billion at a Wall Street firm and was a trustee at a similar program as a professor at Stetson University.
The class format will be modelled on the finance department’s popular Student Managed Investment Fund. Started with a $250,000 donation, SMIF allows students to study the fundamentals of equity and work in sector teams to choose a stock for investment and present their recommendations to a board of advisors, who are working professionals in the field. The board evaluates and accepts or rejects the students’ recommendation to purchase the stock.
The first four to six weeks of class will serve as a “bond boot camp,” giving students exposure to the fundamentals of bond trading and analysis, laying a foundation not covered in the general finance curriculum. The following weeks will allow students to work in teams to research and select investments. At the conclusion of class, students will present to a board, including members of the FIU Treasurer’s Office, which funded the fixed income effort.
Del Pezzo sees big opportunities for students willing to take up the challenge of bond analysis.
“There are lots of jobs in the bond market, because these markets are less efficient,” he says. “Experiential learning in this area is really important, and the feedback we’re getting is very positive.”
He adds that students who have an experiential learning background in both equities and debt will possess a unique combination of skills unmatched by most finance programs, a leg up in entering fields including investment banking, investment management, asset management and private banking.
To create the class, over the course of three years, Del Pezzo marshalled the support of the Department of Finance, led by chairman Shahid Hamid, and fellow members of the faculty. He found a willing partner at FIU’s Office of the Treasurer.
“We are a back office team and look for opportunities that can positively impact our students,” says University Treasurer Powell Jarrell, who oversees the university’s operating fund investment portfolio and was instrumental in creating the student fixed income fund. “When we heard about this, we wanted to take action as fast as we could.”
He notes the recent trend of hedge funds from New York, Boston, Chicago and other northern cities moving down to South Florida, creating new employment opportunities.
“We need to equip our students with the best experience we can to get these jobs,” he says. “When we mentioned this to some of our fixed income managers, they were really excited about the prospect of hiring graduates with real life, real dollar experience in trading bonds.”
As a condition of FIU’s $300,000 investment in the fund, the university’s Investment Committee will require students to provide performance updates justifying the investments they choose.
“We will treat the fund and the students in the same way that we treat our other investment positions,” Jarrell says. “Students will work like bond traders and analysts, pitching funds to their investment committee, and they will need to justify their performance to their client, the University Investment Committee.”
“This opportunity will give students experience presenting to a board of professionals," he adds. “This fund will help our students improve their technical and soft skills, and will provide them a competitive advantage when they apply for jobs in the investment community.”
College of Business Dean Joanne Li is supportive of the project.
“Fixed income represents the largest portion of the capital market, and it’s a very challenging subject,” says Li, who is also a CFA and a member of the Department of Finance faculty. “Training is an absolute must. Our new Student Managed Fixed Income Fund class is an excellent way for the Department of Finance to expand its commitment to disseminating the information our students need to for success in this important, lucrative field.”
For more information about FIN 3561: Student Managed Fixed Income Fund, contact Del Pezzo at firstname.lastname@example.org.