TheExchang e NEWS FROM THE FINANCIAL ECONOMICS INSTITUTE AT CLAREMONT MCKENNA COLLEGE VOLUME 25, SPRING 2018 CMC PRESIDENT Hiram E. Chodosh Director’s Report FEI BOARD OF ADVISORS by Joshua Rosett Alan C. Heuberger ’96 (Co-Chair) BMGI THOUGH THE both interns and post-graduation John R. Shrewsberry ’87 (Co-Chair) Wells Fargo & Company 2017-18 academic necessitated adjustments in the nature of the Gary Birkenbeuel ’80 year saw the New York City Networking Trip. Third, Ernst & Young, LLP, Retired continuation of the the maturation of the Student Investment Baxter Brinkmann P’16 FEI’s main Fund and the value of the holdings J. Baxter Brinkmann International Corporation Alan M. Delsman ’68 programs, much of presented the opportunity to create the FEI Deutsche Bank AG our focus this year Associates group with joint responsibilities Maureen Downey ’93 was on reviewing the to the SIF and the FEI. Fourth, the Russell Greenberg ’79 P’18 Joshua Rosett FEI’s mission and enormous advances in data availability and Altus Capital Partners Christopher D. Harris ’98 enhancing resources that fall within our computing power over the past 15 years put Damitz, Brooks, Nightingale, Turner & Morrisset sphere. We highlighted our successful great pressure on our data analysis Stella Ho ’97 endowment fund drive in the Fall 2017 environment at the FEI. LightBay Capital Newsletter , noting that the drive exceeded its In response to these factors and others, Benjamin Hunsaker ’06 Beach Point Capital Management goal and raised $560,488, including the Strategy Committee of the FEI Susan Matteson King ’85 P’18 $100,090 for the Terri Van Eaton fund. Advisory Board endorsed, and ultimately Foresters Financial This was matched with a gift from BMGI. the full Advisory Board approved, a new Christine Huk Mann ’87 Once again, thank you to all of those who mission statement reflecting what we Goldman Sachs & Co. James B. McElwee ’74 P’12 gave so generously. But in addition to believe are a good set of guiding principles Independent Venture Capitalist raising additional funds, we re-examined our for the FEI going forward. The new Paul H. Nathan ’80 mission statement and expanded our mission statement reads: Ledex Consulting Corporation resource offerings along lines we believe The mission of the Financial Economics Robert P. Thomas ’99 The George Kaiser Family Foundation will best benefit our constituents. Institute is to provide unique research, First, over the course of the year, the curricular and extracurricular opportunities FEI DIRECTOR Joshua Rosett Strategy Committee of the FEI Advisory engaging the Claremont Colleges in both the FEI ASSOCIATE DIRECTOR Board reviewed the mission statement of the theory and practice of financial economics. The George Batta FEI. The statements had not changed since FEI administers three programs directed at these ASSISTANT TO THE DIRECTORS the creation of the Institute in 2004, but the objectives. First, the FEI supports collaborative, Nancy A. Faust founding of the Robert Day School in the advanced student/faculty research in financial intervening time period and changes in the economics and overlapping disciplines. Second, In This Issue: broader environment in which we operate the FEI oversees the Financial Economics dictated that our focus needed to change. As Sequence, a unique curriculum grounded on PG 2: Director’s Report Continued examples, first the creation of the BA/MA rigorous quantitative courses in a liberal arts PG 3 –4: 2018 NYC Networking Trip program in finance impacted the Financial context, preparing students for career PG 5: The Financial Economics Institute: Economics Sequence, the networking trip, opportunities in finance. Third, the FEI sponsors A Student’s Perspective; Deutsche Bank Event and many other aspects of the FEI. Second, the change in timing of the job market for PG 6 –7: Spring 2018 Student Research See Director’s Report on page 2 Analysts PG 8 –11: Spring 2018 FES and BA/MA Oral Defense Presentations PG 11: FEI Affiliated Faculty Publications PG 12: Where will FEI Students Be Working? PG 12: FEI Summer RAs & 2018-2019 BMGI/Larson Fellows 2 THE FINANCIAL ECONOMICS INSTITUTE Entrepreneurship and Innovation). We will and follow on with a case competition Director’s Report from page 1 continue to review and purchase access to managed by the SIF and sponsored by the activities for the broader community, including data sources we believe serve the mission of FEI. We are very excited by this oversight of the Student Investment Fund, the FEI. development. provision of databases, space and hardware for Second, over the past year, we have We also note our ongoing activities. multiple purposes, and support for conferences, expanded our computing resources with For Spring 2018, we once again had a great workshops, internships, networking trips and both new hardware and additional software. trip to New York for the Networking trip other events. Our new computers in the FEI Lab are high (see article in this Newsletter), again hosted In recognition of these principles, we end and geared for software packages such a very successful fourth annual BMGI Pitch are in the process of reviewing our main as Stata and the finance-related modules of event, sponsored the Student Investment activities with an eye to directing resources Matlab. Currently, we are in the process of Fund Finance Conference, sponsored an to where there will be the largest return for adding a server with much larger computing Athenaeum talk by Greg Mankiw, had 26 our constituents. Though we intend to capacity, approximately 10 times the student RAs working in the FEI Lab, continue working with the Strategy memory, CPU power, and storage of the collaborated with BMGI to choose 8 new Committee over the next couple of years to machines we can typically afford to put in BMGI/Michael Larson Asset Management review all aspects of the FEIs programming, the Lab. The server will allow multiple Fellows for 2018-19, and hired 5 students to we are already working through some of users to analyze much larger databases than work as RAs for Summer 2018. these areas. otherwise would be possible. This is a joint Finally, I want to take a moment to First, as noted in a previous report, we purchase with the Lowe Institute, and the thank two people. First, Nancy Faust has extensively reviewed our database offerings return on investment to both institutes is done a great job in her first year as over the past year. The number and very large. Administrative Assistant to the Directors. potential research value of databases has Third, we are working with the Robert She quickly learned and very well handled expanded dramatically during the past Day Scholars program, the Soll Center, and the myriad day-to-day activities as well as decade, and we believe it is important to the Student Investment Fund to enhance our many larger discrete annual events. She provide access to the highest valued among our training and networking offerings for had big shoes to fill following on from Terri these for both students and faculty. In part students. The continual shift of the job Van Eaton, and has so successfully done so. due to the cost, we have sought to find market to earlier timing within the college Finally, it is with a bit of sadness that I note partners to purchase databases where student’s career has necessitated an the departure of Colleen Bartlett, who is possible, including other institutes, the adjustment in our target audience for the leaving CMC to take another job. Many of Library, and the Robert Day School, and NYC Networking trip towards you know she was so instrumental in our the College. Over the past year, primarily Sophomores, and we are working with the successful fund-raising drive over the past through such collaborations, we have added RD Scholars program to add space for year. Colleen collaborated so well with the components of the Wind database on networking trips to other destinations, as Advancement Committee of the FEI economic series in China, both the well as finance training for students Advisory Board, pushed so hard to be sure Compustat Gobal and Point in Time associated with the FEI, the FES, and the we created a great plan, contacted so many databases (jointly purchased with the SIF. Similarly, we continue to work with the people, and doggedly followed up to get us Library), the Loan Connector add-on to the SIF to provide training to students across the finish line. I doubt we could have Library’s Thompson Financial Eikon interested in finance. The SIF has proposed accomplished what we did without her. I subscription, and the PitchBook database that for the 2018-19 academic year, they thank her and wish her all best luck in her (jointly purchased with the Center for will run a financial analysis training session new post. L CLAREMONT MCKENNA COLLEGE 3 2018 New York City Networking Trip By Josh Dorman ’20 and Evelyn Chen ’20 THIS JANUARY, THE FINANCIAL recently published book, The Spider Network, careers in the financial services industry. Economics Institute and the Robert Day and talked about how his passion for research On Wednesday, students started the day Scholars Program sponsored the 14th annual contributes to his role at the newspaper. by visiting Morgan Stanley’s offices in Times New York City Networking Trek. In the On Monday evening, dozens of local Square. The event was hosted by Scott final week of winter break, three juniors and alumni joined the students, Student Ashby ’95 (Managing Director, Debt Capital fourteen sophomores traveled to NYC to Opportunity Center staff, and professors for Markets), Ben Kraus ’11 (Trader, Equity learn about the different opportunities a networking reception at Vandal, hosted by Derivatives), and Phil Crawford ’15 (Equity available in the financial services industry.