Students to manage $40 million for UW System

Students in the Applied Security Analysis Program (ASAP) of the UW–Madison School of Business have been authorized to manage more than $40 million in fixed-income securities for the University of Wisconsin System.

It is believed that the approximate $44 million in total assets under management is the largest pool of capital managed by students at any university in the nation.

On Oct. 5, the Business and Finance Committee of the UW Board of Regents voted to allow the ASAP program to manage approximately $20 million for investment in nominal U.S. Treasuries and approximately $11 million allocated to Treasury Inflation Protection Securities (TIPS). These allotments were in addition to approximately $10 million in fixed-income securities that ASAP students had already been successfully managing for the UW System since 1998.

“What was stressed with the committee is that the ASAP program has proven that it can provide competitive returns in an actively-managed bond portfolio setting,” says Regent Charles Pruitt of Milwaukee, chair of the Regents’ Business and Finance Committee. “This has convinced Trust Funds’ investment staff, and obviously our committee, that ASAP should be able to effectively manage these additional portfolios. The process also provides students with valuable, real-world experience.”

Business Professor Mark Fedenia, the academic director of the ASAP program since 1986, says the Regents’ decision is meaningful “beyond the sheer size of the portfolio. Students will now experience the additional complexity of managing money in multiple portfolios with differing investment objectives. I am confident that our students will live up to the enormous responsibility placed with them.”

School of Business Dean Michael M. Knetter says the Regent decision was especially gratifying because students had to deliver a performance that met or exceeded the board’s expectations in a multi-manager environment. The decision to give additional funds to ASAP students to invest is “a ringing endorsement of their performance,” he says.

UW Regent President David Walsh, BBA ’65, says the board was pleased to provide these funds to enable ASAP students to experience “real-life investment opportunities. This is consistent with UW–Madison’s commitment to research and education. It is another reason why UW–Madison is truly one of the great public universities and its School of Business is a nationally recognized business school.”

ASAP was launched in 1970 with a gift of $100,000 for students to invest and was one of the first applied investment programs in the nation. Thirty-five years later, the program has more than 500 alumni, many in leading investment positions on Wall Street and elsewhere.

Up to 21 students are selected to participate in ASAP each academic year and are placed in one of three portfolio teams: equities, fixed income or REITs. ASAP is housed in the Stephen L. Hawk Center in the School of Business. The endowed center is named after the program’s founding faculty director.