Tuesday, August 30, 2016

The AIM program will participate in the annual Marquette O-Fest on Wednesday, August 31st

Marquette University AIM Program
Affiliated Finance Student Organizations

The AIM program supports the University’s mission in the search for truth, the discovery and sharing of knowledge, the fostering of personal and professional excellence, the promotion of a life of faith, and the development of leadership expressed in service to others. Belonging to organizations allows our students to go beyond the classroom and to better understand how their lives might be impacted by society trends, economics, and global issues. It’s called networking.
An important way for Marquette finance students to gain networking experience is to be a member of a student organization. The following organizations promote professional, career and social interests for students pursuing a finance major. We encourage our students to belong to a variety of groups which could include one or more of the following finance student organizations:

Financial Management Association (FMA)

Contact: Martha Wong (martha.wong@marquette.edu)

The Financial Management Association (FMA) is a global leader in developing and disseminating knowledge about the finance industry. Their mission is to broaden the common interests between academicians and practitioners and to provide opportunities for networking interactions between financial professionals and students.  Marquette’s FMA club regularly hosts speakers who discuss the topics of the day and showcase ethically oriented decision-makers in the finance industry. The group also organizes annual field trips to New York and Chicago, as well as arranging visits to local finance firms. A student membership in the FMA can be both professionally meaningful and a socially rewarding experiences for their members, chapter officers, and faculty advisors. The FMA Club is an ideal place to meet others who share the same interests and passions that you may not otherwise meet on campus.  By participating in the Marquette FMA Club, you gain the opportunity to:

  • Broaden your knowledge in finance and other areas
  • Sharpen your professional skills
  • Gain recognition for outstanding achievements
  • Meet new people and make new contacts and friends
  • Gain leadership experience you can list on your resume
  • Prepare yourself for the job world
  • Be aware of other ideas and career opportunities
  • Learn how to pursue your career path

Marquette Investment Club

Contact: Akash Vipani (akash.vipani@marquette.edu)

The student-run Investment Club seeks to further its members' knowledge of investment methods and strategies. The board and student members engage in intellectual discussions, make investment presentations, host guest speakers, and manage a real portfolio. Starting with seed capital of $25,000, the student-managed fund has grown over the years. The portfolio utilizes low-cost exchange traded funds (ETFs) enabling the students to gain experience investing in a wide variety of global financial instruments.  Members are also given the opportunity to complete bi-annually in an ETF national team competition.

Investment Banking / Private Equity (IB/PE) Club

Contact: Jeff Germanotta (jeffrey.germanotta@marquette.edu)

Marquette has recently created an Investment Banking / Private Equity Club. This group seeks to enrich the undergraduate experience by providing students with practical information, insights and resources to better manage their program of study. Professionals from the banking and private equity sector will help coach students on the process of obtain an internship and entry level positions – and offer long-term career advising.  Marquette students and alumni will manage the IB/PE Club holding topical seminars monthly during the school year.  Sample seminar topics include:

  • Resume writing and interview preparation
  • Identifying internship and job opportunities
  • Maximizing internships
  • Dressing for success
  • Social and organizational skills
  • Effective networking
  • Effective business leadership and meeting skills

Real Estate Club of Marquette

The Real Estate Club of Marquette (RECM) is an active student group that brings in external speakers on a nearly weekly basis throughout the academic year to allow members and others hear about current trends in commercial real estate and network with industry professionals. In addition, the club organizes site visits to various regional properties and locations and sets up shadowing programs with professionals in the commercial real estate industry in the area.

Monday, August 29, 2016

The AIM Program's Investment Banking Course

AIM's Private Equity & Investment Banking track is entering its second year.  This semester's Investment Banking course, taught by Jeff Germanotta, will continue to emphasize experiential learning, including group case studies, current events presentations, and guest speakers.  

Jeff Germanotta
Mr. Jeff Germanotta teaches in the AIM program. He possesses more than 35 years of experience in investment banking, commercial banking and corporate planning, including extensive experience with commercial services, distribution, industrial and logistics business models.  His current activities include:
  • Adjunct Instructor at Marquette University, teaching investment banking and private equity courses within the Applied Investment Management Program.
  • Limited Partner and member of Supply Chain Equity Partner’s Advisory Board; a Florida based private equity firm established to invest in middle-market North American supply chain service businesses. 
  • Limited Partner and Special Advisor to Greenbrair Equity Group LLC; a New York based private equity firm focused exclusively on investing in the global transportation, logistics and distribution industries.
  • Opportunity International’s Board of Governors and Ambassador’s Council; the world’s largest not-for-profit microfinance organization headquartered in Illinois. 
Prior to his retirement, Mr. Germanotta was a Principal and Managing Director of William Blair & Company LLC, a Chicago-based global investment-banking firm. While at Blair, Mr. Germanotta was Co-Head of the Supply Chain Services practice within the Corporate Finance Department and Co-Group Head for the Equity Research Department’s Business Services practice.  As an investment banker, he assisted clients with the formulation and execution of numerous strategic initiatives, including capital raises and M&A activities.   As an equity analyst, Mr Germanotta was consistently recognized in the Financial Times/StarMine“World’s Top Analysts” rankings.

Mr. Germanotta holds a B.A. in Business Administration from the University of Wisconsin-Milwaukee and an M.B.A. from Marquette University. 

Talking about the course he said, "We're privileged to have numerous practitioners presenting real world examples of sell and buy-side M&A, leveraged finance, debt and equity offerings and more.   The class will explore shareholder wealth creation and key value drivers such as sources of sales growth, operating profit enhancement, the impact of income taxes, working capital and fixed capital investment,and the cost of capital.  We'll further employ a variety of valuations techniques , such as trading multiples, precedent transactions, discounted cash flow, leveraged buyout analysis, and accretion/dilution analysis to various investment scenarios.  Examples will include leverage buyouts, take-private transactions, dividend recaps, tender offers, and equity offerings."

Dr. David Krause, AIM program director said, "I am excited to have Mr. Germanotta as a part of the AIM instructional team. He has outstanding academic and institutional experience - and he has a passion for teaching. We will be adding a PE/IB club and brining many speakers to campus this semester. Thanks to the alumni and investment professionals for their support of Jeff and the AIM program's PE & IB track."

Friday, August 12, 2016

AIM Alumnus David Martin on CNBC Power Lunch: Small-Biz Owners vs. Trump's Economic Plan

David Martin

CNBC Power Lunch, Small Business Roundtable 
(Monday, August 8, 2016)

Small-Biz Owners vs. Trump's Economic Plan 

AIM Alumnus David Martin of HJ Martin & Son discussed the economy and their reactions to Trump's economic plan. David has been a frequent regular guest on CNBC over the past several years.

Monday, July 25, 2016

We are saddened by the sudden death of AIM student, Jake Kaufmann, a rising senior

University mourns the death of student Jacob Kaufmann

A message from Marquette President Michael R. Lovell
Dear Marquette community,
I am deeply saddened as I write to you today. This weekend, we learned that one of our College of Business Administration students, Jacob “Jake” Kaufmann, died unexpectedly. Jake would have started his senior year on campus this fall. While he left our Marquette family far too soon, I ask that we all come together as a community and honor his memory and legacy.
Jake was a gifted scholar who was dual majoring in Accounting and Finance and was active in our Applied Investment Management program. The recipient of Marquette’s Ignatius Scholarship, Jake was fluent in Spanish and enjoyed traveling, scuba diving and mountain biking. He was also a member of Marquette’s water ski and fishing clubs. Jake volunteered with Journey House and was a member of the Financial Management Association and Investment Club.
It is clear that Jake will be deeply missed. Our university leadership team and Jesuit staff are working with Jake’s parents to offer our support and provide every available resource for them. Please keep Jake’s parents, family and friends in your thoughts and prayers during this incredibly difficult time.
I want to reiterate what Keyes Dean of Business Administration Dr. Brian Till shared with the College of Business Administration students last night: These are the times when we need each other the most, so we ask that we all look out for each other.
Please know that the Counseling Center and Campus Ministry are available for students. In addition, the Chapel of the Holy Family in the AMU is available during the day for prayer.
Jake’s family has informed us of the funeral plans. Visitation will begin at 10 a.m. this Saturday, July 30 at St. Anne Catholic Church (9091 Prairie Ridge Blvd, Pleasant Prairie, Wis., 53158). Mass will follow at noon.
We extend our deepest sympathies to Jake’s family and friends for their immeasurable loss.
Michael R. Lovell

Monday, July 11, 2016

Are Common Stocks the New Bonds?

Common Stock Yields for the S&P 500 Above the Yield on Newly Issued Corporate Bonds

With the 10 year US Treasury recently hitting an all-time low of 1.3% yield and the S&P 500 dividend yield at 2%, this is an amazingly large inverse spread!

Historically we are witnessing some head-scratching corporate finance relationships. For example, this past Thursday, The Walt Disney Company sold a 30-year corporate bond with a 3% coupon rate and a 10-year bond with a 1.85% interest rate coupon, the lowest long-term borrowing costs in United States corporate history! 

Disney’s common stock (ticker: DIS) is selling at $100 per share and its dividend yield is 1.43%. While this isn’t a negative spread to their dividend, it is none-the-less puzzling because Disney is not a low growth utility company --- there is still plenty of potential stock appreciation for DIS shareholders.

What corporate CFO is not looking to lock in these incredible low corporate borrowing rates and repurchase their firm’s common stock? Is there a better investment that a company can find - its almost an arbitrage opportunity for firms.

Get ready for another large wave of corporate refinancings and increased stock buy-backs. 

And for bond investors seeking yield, take a look within a firm’s capital structure – you might be surprised to find the dividend yield on a firm’s common stock outpacing the corporate bond yield – amazing times! 

Friday, July 8, 2016

Performance of the AIM Fixed Income Funds as of 6_30_2016

The third fund managed by the students in the Applied Investment Management (AIM) program at Marquette University is the Fixed Income Fund. This portfolio consists of a mix of fixed income exchange traded funds (ETFs) and is benchmarked to the Barclays US Aggregate Bond Index. The fund was seeded in January 2006.

AIM Fixed Income Fund vs. Barclays US Aggregate Bond Index
(Cumulative Returns since January 2006)

As the chart above shows, the AIM Fixed Income Fund has slightly exceeded the return generated by the index over the 10+ year holding period - good performance given that the net returns (after transactions costs) are presented.

AIM Fixed Income Fund vs. Barclays US Aggregate Bond Index
(Annual Returns)

The bar chart shows the annual returns of the AIM Fund vs. the Barclays benchmark. Note that the portfolio produced positive returns each year (except in 2013). The AIM Fund generated its best relative performance during the Financial Crisis of 2008.

Trailing Returns of AIM Fixed Income Fund vs. Benchmark
The AIM Fixed Income Fund has surpassed the benchmark by nearly 30 basis points annualized (4.84% vs. 4.58%). The table shows that the recent returns have been below the benchmark as the students maintained a 'short duration' strategy which did not perform well during the period of falling interest rates.

The current top 10 holdings are shown above. All of the AIM Fixed Income Fund holdings low cost are iShares ETFs.
Key Metrics of the AIM Fixed Income Fund

The chart above provides key statistics for the AIM Fund. The average duration of 5.1 years is slightly below the benchmark effective duration of 5.3 years. The maturity breakdown depicts a relative even schedule across time, which during the period of a flattening yield curve also reduced relative returns vs. the benchmark. The AIM Fund is high quality with virtually no non-investment grade holdings.
Mix Comparisons to the Benchmark
The table above shows that the AIM Fixed Income Fund has an underweight to US Treasuries and an overweight to secured fixed income securities. Given the strong performance of government securities this weighting also resulted in performance slightly below the benchmark. As mentioned previously, the portfolio is of high quality.

Risk-Return Chart
The final chart shows the long-term return and standard deviation of the monthly returns for the AIM Fixed Income Fund versus the Barclays US Aggregate Bond Index. The AIM Fund has generated a slightly higher return at the same level of risk as the benchmark.

The AIM students will be returning to campus in late August and will begin to make any needed adjustments to the AIM Funds. By then it will be apparent hopefully that the Federal Reserve Bank's monetary policy will be better known.

Thursday, July 7, 2016

Congratulations to Baird for Being Named 'European Corporate Finance House of the Year'

Earlier this year, Baird was named the 2016 "European Corporate Finance House of the Year" at the Private Equity Awards in London, which are among the oldest and most respected accolades given to those who work in the private equity industry and those who advise it. 

As part of this honor, Baird was recently featured in a Real Deals story and Q&A that highlights the firm’s strong sector focus, culture of collegiality and impressive track record.

“Strong sector focus, a culture of collegiality and an impressive list of deal mandates made Baird a worthy winner.”

Read the feature story and Q&A.

To learn more about how the award was determined, read Baird’s press release.