The EnCap & LCM Alternative Asset Center
Professor William Maxwell is the Academic Director of the EnCap Investments & LCM Group Alternative Asset Management Center (AAMC) at the Cox School of Business at Southern Methodist University. The AAMC is at the forefront of training students for careers in finance. A selection committee selects finance undergraduates in their junior year for this highly selective BBA honors program. Admission is based on academic performance [the median GPA of the 2020 incoming class was 3.8], strength of courses, demonstrated work ethic, strong recommendation letters, and an interview. The center seeks to identify smart, ethical, and highly motivated students who are interested in pursuing a rigorous, application-oriented program with motivated peers.
The training begins in the spring semester of the junior year with a case-based class, which provides the basic skills necessary for private equity/investment banking. Students complete a summer internship after the junior year typically at an investment bank, consulting firm, hedge fund, or money management firm. In the fall semester of the senior year, the students take a second class from a list of recommended alternatives. A distinguishing feature of the alts program is the active involvement of accomplished speakers from the finance industry on topics covered in the program. Finally, in the spring semester of the student’s senior year, the Finance Department funds a voluntary CFA review course (the course meets for three hours on Fridays for 14 weeks) for students sitting for the CFA Level 1 exam upon graduation. In addition, the AAMC offers Graduate courses on Alternative Assets and Quantitative Trading Strategies.
Practicum in Portfolio Management
The finance department runs two Portfolio Management Practicum classes, one for undergraduates, and one for graduate students. The Practicum combines hands-on money management of equity and fixed-income investments, and the survey and application of the asset allocation and portfolio management process. The course is a blend of active investment management, student investment presentations, case studies, discussions of current investment topics, the study and applied analysis of different asset classes, and the management of multi-asset portfolios. Each spring, a selection committee selects approximately 30 undergraduates and 30 graduate students to participate in the program for the following year.
The Ann Rife Cox (undergraduate) and Nancy Chambers Underwood (graduate) currently have combined funds have assets of approximately $9 million, representing one of the largest and oldest student-managed portfolios in the United States.
The Practicum’s goal is to give students hands-on money management experience that culminates at the end of the year in an annual report describing the entire management process as applied to the Cox Endowment Fund. It also provides an in-depth examination and analysis of portfolio asset selection, allocation, risk management, and performance measurement. The courses are held in the Kitt Investing and Trading Center, which is a state-of-the-art instructional and research facility at the Cox School of Business. The Center is designed to integrate finance curriculum, enhance innovative faculty research, and teach students practical finance and investment applications.
