Finance Students at Virginia Tech Gain Hands-On Experience
February 26, 2004
Business students at Virginia Tech who think they need a finance degree before they dip into the stock market may be in for a pleasant surprise. The Student-Managed Endowment for Educational Development (SEED), now entering its 14th year at Tech, puts millions of dollars in the hands of students for investing in the stock market.
SEED is a completely student-run investment team developed through the Pamplin College of Business. Since its inception in 1991, the organization has developed into the third largest student-managed portfolio in the country.
The funds for SEED are made available through an endowment granted by the Virginia Tech Foundation. Each team starts off with $3.2 million at their yearlong term, an amount that either grows or decreases depending on the success of the portfolio.
Though a rough economy in the last two years has made investing difficult in the past, returns for the current 16-member team since April have already reached $3.6 million. The opportunity to partake in real experience with real consequences is what sets SEED apart from "stock simulation" programs, said Chris Merrill, of Vero Beach, Fla., a senior finance and marketing double major and CEO of SEED.
"Many people don't realize that this is real money entrusted completely to a group of students," Merrill said. "The team is not only gaining valuable experience, but also pulling in a large amount of money for the university."
Experience is not the only thing members are gaining. An equally important component of the SEED program is its ability to help students find jobs after college. Annual trips in the fall to visit investment firms and consult with SEED alumni in New York City are one way in which the organization cultivates contacts and opportunities for SEED members.
"The continual contact with alumni and the feedback we receive from them is a nice vehicle for us to stay current," said Randy Billingsley, SEED faculty advisor and professor of finance. "Since these trips began, we've built a lot more contacts with Wall Street and it has helped get our students successfully placed."
Members of SEED dedicate between 15 to 20 hours a week to the program. Though no compensation or course credit is given, many students are eager for the unique experience that SEED has to offer, Merrill said. The competitiveness of the application process is one indicator of that interest. This past fall, more than 60 students competed for only 24 available positions. Merrill also pointed out that students do not need to be finance majors to apply. Applicants range from marketing majors to engineering students, he said.
As the SEED program develops, progress will continue to be made to fine-tune the program, Billingsley said. One important development in the past year was the addition of a finance elective that is required of all SEED students. The course is taught by Billingsley in the fall and serves as reinforcement for the new members. Though required of SEED members, the course is also open to other Pamplin students.
"The addition of the class combined with improved training methods for new members has really increased the efficiency and success of the team," Merrill said.
The newest 25-member SEED team will complete training and take over management of the organization in April. A nine-person increase in membership marks the first step in the process of expanding SEED to 35 members over the next two or three years. As demand increases, the college hopes to give the unique experiences and opportunities that SEED has to offer to a greater amount of students.
"The key thing about this program is that it's giving students a chance to apply what they're learning," Billingsley said. "It's being recognized because it helps increase the amount of students who are graduating with jobs."
For more information, visit SEED's web site at http://market1.cob.vt.edu/seed/links.asp.