2005 Headlines
Student-Managed Cayuga MBA Fund Up Nearly 19% in 2004Total Asset Value Nears $7 Million February 14, 2005, Ithaca, New York The Johnson Graduate School of Management at Cornell University and the managers of the Cayuga MBA Fund are pleased to announce that the student-run investment fund saw a return of 18.6 percent in 2004. The Cayuga MBA Fund, housed at the Johnson School's Parker Center, is one of the largest student managed hedge funds in the world as its asset value is close to $7 million. Founded as an S&P 500 index-tilted fund in 1998, it now follows a market-neutral investment strategy designed to provide positive returns to investors independent of the overall market direction. "The Cayuga MBA Fund is an investment vehicle that aims to provide a competitive rate of risk-adjusted return to its investors, while enhancing the educational and professional opportunities of Cornell Johnson School MBA students," said Lakshmi Bhoraj, director of operations at the Parker Center. "We are pleased with our performance in 2004, as our return of 18.6% exceeds twice the S&P 500's return of 8.99%. The Fund's investment approach is clear: to maximize expected returns while maintaining low volatility through a diversified portfolio of equity securities that meet the quantitative and fundamental specifications adopted by its twenty-four student managers. After managers prepare and present investment ideas that cover key economic sectors in the S&P 500, investment can be made only after a two-thirds majority is achieved in a formal vote. Sophisticated risk-management software is used to ensure the final portfolio exhibits low overall risk and minimal market exposure. Faculty advisors and Investment Committee members (typically alumni of the Johnson School working as portfolio managers or research analysts) aid in research and deliberations. Ultimate fiduciary responsibility for the Fund's assets and operations rests with the Board of Directors, consisting of a faculty advisor and two outside board members. The Board appoints an Investment Committee to oversee the investment decisions of the Fund and each student's stock recommendation must be approved by two Investment Committee members before it is implemented. An advisory council, consisting of distinguished members of the investment and academic community, also provide dialogue and input into the management of the Fund. The Parker Center at the Johnson School is a financial resource center dedicated to the creation and dissemination of leading-edge research relevant to investment managers. Its mission is to support the educational goals of the Johnson Graduate School of Management by establishing a world-class facility for integrating cutting-edge investment research, innovative teaching material, and real-time data feeds. The Johnson School is Cornell's graduate school of management. Founded in 1946, and located at the center of one of the world's top research institutions-the largest in the Ivy League-the school's programs include MBA and doctoral degrees, an executive MBA, and a variety of customized executive education programs.
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