The Michael Price Student Investment Fund (MPSIF) is a family
of funds managed directly by NYU Stern MBA students. The fund,
part of the overall NYU endowment, was established in 1999 through
a generous gift from Michael Price, managing partner, MFP Investors,
LLC and former chairman of Franklin Mutual Series funds.
What is unique about MPSIF?
MPSIF provides Stern MBA students interested in pursuing a career
in asset management with hands on experience managing a real fund
with significant assets. In addition, MPSIF is required to pay
an annual 5% dividend to the University of Oklahoma Price School
of Business, Mr. Price's undergraduate alma mater, for its students'
tuition to attend summer classes at Stern.
What is the portfolio make up?
For diversification purposes, the fund is divided into three equity
funds-Growth, Value and Small Cap-and one fixed income fund. While
each fund has its own performance benchmark (Russell 1000 Growth
Index, Russell 1000 Value Index, Russell 2000 and the Vanguard
Total Bond Index, respectively), MPSIF's primary goal is to deliver
overall positive returns that exceed the rate of inflation.
How has MPSIF performed relative to market benchmarks?
At the end of FY10, MPSIF had a combined value of $1.48 million,
excluding more than $907,000 in mandated distributions since its
inception to the Price School. Since making its first investments
in March 2000, MPSIF has earned a cumulative return exceeding
36%, outpacing an equally-weighted blend of its market benchmarks.
What role do Stern MBA students play in managing the fund?
To become a portfolio manager or analyst with MPSIF, the basis
of Stern's "Managing Investment Funds" course, is a competitive
process. Stern MBAs must apply to this course, and demand has
always exceeded available spots. About 45 students enroll each
year and are then responsible for all fund activities: screening
and evaluating stocks, preparing and presenting pitches for buy
and sell recommendations and strategizing on broader portfolio
issues as it relates to industry sectors. These students also
write a periodic newsletter, The Educated Investor, and prepare
annual and semi-annual reports that are presented to the MPSIF
Board of Advisors, Stern faculty and other parties.
How does MPSIF benefit MBA students?
Stern MBAs who manage the MPSIF family of funds gain invaluable
experience in investment management, which provides a competitive
advantage when interviewing for summer internships or full-time
employment after graduation. Managing the diverse tasks in MPSIF
relies on teamwork, and the course is interdisciplinary in that
it requires students to draw on their knowledge of finance, macroeconomics,
accounting, competitive analysis, strategy and marketing.