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Students who manage the Carlson Growth Fund and The Carlson Fixed Income Fund gain real-world experience in analysis and investment.
A decade of growth
The Carlson School's Funds Enterprise celebrates a significant milestone
By Alyssa Atkins
July 29, 2008
Since its inception in 1998, the Carlson School of Management's Carlson Growth Fund has consistently outperformed the Russell 2000 Growth Index, and is currently worth approximately $10 million. As a result of being successfully managed by more than 200 students over the course of 10 years, the Carlson Funds Enterprise held a celebration on May 1.
The Carlson Growth Fund, a small-cap growth fund, is one of two partnerships managed by students at the Carlson School as part of the Carlson Funds Enterprise, a program designed to give students real-world experience analyzing companies and investing in their securities. The Carlson Fixed Income Fund, the other fund in the program, is celebrating its five-year anniversary. The Enterprise has more than $25 million distributed between the two funds.
The Carlson Funds Enterprise was launched on May 4, 1998, with $3.5 million in initial investments from Alliance Capital Partners, Ameriprise Financial, U.S. Bancorp, and Wells Fargo & Co. to be used for the Carlson Growth Fund (originally named the Golden Gopher Growth Fund). Since then, the fund has gained Securian Financial Group Inc., Piper Jaffray & Co., and two individuals as participants.
The Aleks I. Ablamunets Angel Investment Fund is a new program at the Carlson School of Management meant to inspire students to pursue business ventures while continuing their college education.
It was created in memory of Aleks I. Ablamunets, a passionate young entrepreneur. Among many business ventures, Aleks created a company called Healthy Home Technician, which provided home owners with all-natural cleaning services.
Alek's fellow entrepreneurial students hope they can extend his inspirational legacy to future generations.
As of March 2008, the Carlson Growth Fund had grown 134.76 percent since 1998. On a compound annual rate, the fund has increased at 8.99 percent per year, while the Russell 2000 Index has returned 1.7 percent per year.
Students in the Enterprise research potential investments and consult with Program Director Joe Barsky and expert mentors several times per semester. In the end, the students make the call on where to invest the money."To give students the opportunity to make decisions on where to invest real money and have industry leaders offer them advice is an unmatched experience," says Barsky.
The Enterprise program has become one of the school's distinguishing trademarks due to its great success. The most notable success in the Carlson Growth Fund's history came five years ago with the investment in Intuitive Surgical Inc., an obscure medical equipment firm.
Avanish Vellanki and Christian Lundsgaard, two MBA students at the time, recommended the stock, not knowing how successful it would become. A small portion of the stock was purchased for $15.60 per share in December 2003, and a larger portion was bought at a similar price in 2004. As of April 8, 2008, Intuitive Surgical stock had risen to $347.10 per share, with the fund having realized profits of over $1 million since the original purchase.
"It is very rare to identify, invest in, and hold on to a stock that has risen twenty-fold in five years," says Barsky.
To celebrate the impressive growth of the two funds over 5 and 10 years, respectively, the Enterprise has initiated a fund-raising campaign to raise $7 million to fund a lab remodeling, a fellowship program, investments in portfolio management and accounting systems, and an endowment fund that will cover annual operating expenses, with the goal of becoming self-sustaining.
Reprinted with permission from the Spring 2008 Carlson School magazine.