Columbia Business School MBAs Win $100K in Investing Competition

Image source: Chintung Lee / Shutterstock.com

The depth of enthusiasm for careers in investment was on display recently at Columbia Business School in New York City.

A throng of Columbia students won US$100,000 after pitching stocks to Bill Ackman, the hedge fund magnate and CEO of Pershing Square Capital Management. Participants in the annual Pershing Square Challenge, now in its 10th year, also got to learn a thing or two about philanthropy – the winners decide the amount of the prize that they wish to keep and the amount, if any, that they wish to donate to an area of their choosing within the business school.

Philanthropy central to Pershing Square Challenge

In past years, students have donated to the Heilbrunn Center for Graham and Dodd Investing, Tamer Center for Social Enterprise, and various scholarship funds at the school, including one aimed at women interested in investing.

“The goal of the challenge is to teach Columbia Business School students about investing and philanthropy from the beginning of their careers,” said Ackman.

“Successful investors inevitably earn more than they need for themselves and their families. The Pershing Square Challenge will help students prepare for a life of success and giving back to their communities.”

Columbia Business School’s dean, Glenn Hubbard, added: “This incredible opportunity gives students hands-on experience in two important areas — value investing and philanthropy — thereby creating the ultimate bridge between theory and practice.

“We are grateful to Bill [Ackman] for creating this challenge and for helping to instill the next generation of value investors with both the skills needed for success and a sense of purpose and responsibility in the world around them.”

Yum China the subject of winning pitch from Columbia MBAs

This year’s first-place prize of US$100,000 went to Windsor Cristobal, Anji Lin and Isabella Lin – all members of the MBA class of 2018 – for their pitch concerning Yum China (YUMC), which separated from Yum! Brands (home to KFC, Pizza Hut and Taco Bell) at the end of last year. Yum China is said to have generated over US$8 billion in system sales in 2015.

Last year’s winners, meanwhile, Thais Fernandes, Melody Li and Joanna Vu, went on to pitch their idea on CNBC’s Fast Money.

“We moved beyond our comfort zone each time we pitched” says former winner

“Participating in the challenge itself is rewarding. It allowed us to work as a team; form lifelong friendships; do semester-long, in-depth research; and present to distinguished investors,” Li said.

“I’m particularly impressed by how strong Columbia Business School’s network in investing is. We improved and moved beyond our comfort zone each time we pitched to them.”

The challenge caps a three-month competition among 40 student teams from Columbia’s ‘Applied Security Analysis’ course, taught this spring by adjunct assistant professors Naveen Bhatia and Rishi Renjen. Each team is tasked with putting together a stock pitch, with Ackman selecting the top five to be presented at the Pershing Square event. A panel of judges listens to each team’s pitch and selects the winners.

Another team clinched second prize — US$50,000 — for their presentation of Smucker’s (SMJ), a US manufacturer of fruit spreads, ice cream toppings, and peanut butter.

Business schools have increasingly tried to move learning outside of the classroom in a bid to bridge theory and practical experience — something they call experiential learning. Finance professor and director of the Heilbrunn Center, Bruce Greenwald, underscored the importance of the hands-on experience for would-be-investors.

“Giving students the chance to apply what they’ve learned in Applied Security Analysis to a real-world investment scenario, where they are pitching their ideas to top industry practitioners, is invaluable,” he said.

“It’s a once-in-a-lifetime opportunity for students to test-drive their work while gaining exposure to the field and learning firsthand about the responsibility that it brings with it.”