Johnson faculty and alumni launch investment internship with the Cayuga Fund

By: Susan Hu
Stocks: Charts and graphs printed on a piece of paper

Early this year, the COVID-19 pandemic swept across the globe, disrupting lives as the world has never experienced before. Every industry has been impacted in some way, and the economy as a whole has been shaken dramatically. Amidst all the turmoil, students have not been spared, as classes were transitioned to virtual settings and internship and job opportunities declined. To support students in this difficult time, the Cornell SC Johnson College of Business created an unpaid summer investment internship with the Cayuga Fund, a student-run organization that manages money for the Cornell University endowment.

The internship program was designed and launched by Scott Stewart, MBA ’83, PhD ’85, clinical professor of finance and accounting at Johnson, a faculty co-director of the Parker Center for Investment Research, and former Fidelity fund manager, together with Kerstin Ramstrom, MBA ’01, an equity analyst with experience at Fidelity, State Street, and Northern Trust, who has served as a career advisor for asset management students at Johnson. Thirteen students enrolled in this two-month-long program, including seven undergraduate students, five MBA students, and one master’s degree student from the College of Agriculture and Life Sciences.

As the spring semester neared its conclusion, it was evident that some students were beginning to struggle with their summer plans as the entire country headed into lockdown. For some, internships that were already secured were being rescinded. For others, it became increasingly difficult to land that perfect opportunity. In speaking with a number of MBA students on the investment track who were worried about their lack of plans for the summer, Ramstrom initially advised them to find a sector and write an industry report, but soon after decided to help make the experience more formal. She contacted Stewart to discuss her thoughts; as it turned out, he was thinking along the same lines.

By May, the internship was created with the goal of providing real buy-side experience to students for the summer, while also supporting the Cayuga Fund during this volatile period. Notices were distributed to students who had been enrolled in NBA 4120 – Equity Investment Research and Analysis, as well as the Investment Research and Asset Management (IRAM) immersion, and all 13 interested students were accepted.

Mentors advise students on one of two tracks

The Cayuga Fund internship consisted of two tracks: an equity track and a quant track. The equity track was modeled after Fidelity Investments’ summer internship program. Based on their own experiences, Ramstrom and Stewart sought to replicate the experience that a student would have had, had they been interning at a top-tier investment firm. Students on the equity track were expected to analyze one assigned sector, write up an industry review, and prepare initiation reports on three stocks, one of which was to be a stock currently owned in the Cayuga Fund. The quant internship required students to develop and test stock-ranking metrics, prepare a pro forma risk-controlled equity portfolio using those rankings, and apply what was learned to review Cayuga Fund holdings. Together, Stewart and Ramstrom mentored the interns, taking questions as they arose and guiding them on how to appropriately come up with targets for their stocks.

A third mentor, Sean Lim, MBA ’20, guided interns in leading Tuesday morning market calls to ensure they were immersed in the financial news and markets. As a recent Cayuga Fund portfolio manager, Lim was well-versed in the running of the fund and volunteered his time this summer to support the interns.

A Zoom screenshot with a presentation that says industry trends
Scott Stewart, clinical professor of finance and accounting at Johnson, hosts a Zoom meeting with Cayuga Fund summer interns

ILR student investigates the “work-from-home” tech industry

Claire Haklik ’21 (ILR) had enrolled in the internship program. Like all her classmates, Haklik’s semester was cut short due to the pandemic, and she returned home to Atlanta, Georgia, where she has spent the summer. She first learned about investment research last year at the Parker Center’s Undergraduate Women in Investing Conference, an annual conference founded by Lakshmi Bhojraj ’95 (Arts & Sciences), MBA ’01, executive director of the Parker Center. The conference is designed to educate undergraduate women about the rewarding career opportunities available to them in the field of investment management. Haklik’s original internship plans were disrupted as a result of COVID-19, so she reached out to Stewart, her professor for NBA 4120, who informed her of the potential summer internship program, and, knowing this was precisely what she wanted to pursue post-graduation, she signed up immediately.

“We had to make real-time decisions about everything,” said Haklik, who chose the equity internship track. Each intern on this track was assigned a different industry based on their sector interest, and all of the industries were ones that had been affected by the pandemic. Haklik, interested in technology, was assigned the work-from-home technologies industry, which she found extremely interesting and absolutely pertinent at a time when many workers have transitioned to remote work environments. “These are super interesting companies,” she said of her holdings. “With the push to continue working from home, these companies aren’t going to go away.”

Though most of the work was conducted independently, there was also time for discussions with the other interns. In addition to weekly morning calls, during which interns came together to talk about updates in the economy and the market, interns also formed their own group chats. Although they hadn’t communicated much in class prior to the internship, they found themselves asking each other questions and discussing industry trends.

MBA student researches environmental investing

Yoshitaka (Taka) Suda, MBA ’21, was previously in the fundamental research space. While working as a researcher at an investment bank, he realized the importance of quant investing. In the Cayuga Fund summer internship, as one of two interns on the quant track, Suda evaluated which factors, such as momentum or value, work best specifically for ESG (environmental, social, and governance) investing. This is important for improving the long-term performance of pension funds, for example, and for improving environmental responsibility in society. The Cayuga Fund may pursue ESG investment strategies, and Suda hopes that his research will become useful sometime in the future when it does.

Suda originally secured a summer internship in New York City, but due to COVID-19, the internship, like many others, had been cancelled. Suda explained, “This is a very difficult time for everyone, and the internship experience has been above our expectations.” Besides a few small limitations imposed by the virtual setting, such as somewhat constrained data access and a lack of spontaneous conversations that could be struck up with peers, he was extremely pleased with the learning environment that had been set up for students in the field. “I haven’t heard of any other schools offering this kind of opportunity,” he said. “This is very special.”

Putting classroom theories into practice

At the end of June, students who were conducting fundamental equity research delivered industry reviews and those who were completing quant projects submitted preliminary analyses.

A copy of the front page of an industry report with a chart and graph
The first page of an MBA intern’s review of the online home goods industry

Students had largely been working on their own, which is similar to the real world of investments; in the industry, analysts are left to do much of the work independently. The reviews, therefore, were a test of how the internship was progressing. According to Stewart, the reports were strong. Students will be giving final presentations to industry guests, from firms such as Oppenheimer and Invesco, at the conclusion of the internship program.

“Ideally,” said Ramstrom, “students would get internships with companies, because it provides a different experience than in school and is a chance to see different atmospheres.” If a student didn’t like the environment, for example, they could then have a chance to pivot in a different direction. While the Cayuga Fund internship didn’t necessarily provide students with the validation that comes from securing an opportunity with an external organization, it did allow them to put classroom theories into practice, which can make all the difference for future recruiting. When the time comes for interviews, these students will have acquired hands-on experience researching the industry and up-to-date knowledge of the markets—not to mention a few fresh stock recommendations on hand.

Haklik believes she has gained valuable connections beneficial to her now and in the future. “It has definitely exceeded my expectations,” she said of the Cayuga Fund internship. “I’ve learned so much more than I thought was possible.”

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