The Practicum in Finance
The Practicum is an intensive program that spans the last half of the fall semester and the first half of the spring semester. Students work directly with sponsoring companies on a wide variety of finance problems.
Students may indicate an area of interest for their practicum project in early fall. Students work in small groups under the supervision of the MSF program director to complete the project, earning practical experience and developing a strong relationship with corporations and potential employers.
The MSF program director and Finance Department faculty work with various finance-related organizations to design projects that are valuable to MSF students and benefit the sponsoring group. Projects are designed to be accomplished within the Practicum time frame and culminate in a written report and presentation of work to the sponsoring company and program faculty.
2014-2015 Practicum Projects
- Deloitte Financial Advisory Services
Deloitte FAS will work with a Texas MSF student group on a project examining the potential for energy midstream infrastructure investments and the resulting impact of those investments. Deloitte has presented the student group with a list of specific questions that the firm considers when evaluating a potential midstream infrastructure investments and the students will research and analyze valuation and market factors related to the midstream infrastructure space. The student group will work with a Principal of Deloitte FAS to analyze specific research areas and ultimately write a report that will be presented to the firm.
- The Employment Retirement System
The Employee Retirement System of Texas manages approximately $30 billion in assets. They have tasked the Texas MSF student group to review, analyze, and assess the new generation index called "Fundamental Index". These indices are those which stocks are weighted by one of many economic fundamental factors, especially accounting figures which are commonly used when performing corporate valuation, or by a composite of several fundamental factors. A key belief behind the fundamental index methodology is that underlying corporate accounting/valuation figures are more accurate estimators of a company's intrinsic value, rather than the listed market value of the company (i.e., that one should purchase and sell companies that are in line with their accounting figures rather than according to their current market prices.) The team will compare fundamental indices against the current indices on a return, risk, and risk-adjusted basis.
- Farm to Girl
Farm to Girl (http://www.farmtogirl.com), is a group of women scientists (UT graduates!) and nurses that have started a sustainable skin care line in Austin. Their mission is to help women both in the US and in the developing communities from where they source organic & natural ingredients. As a company founded by social entrepreneurs, a percent of profits are given back to fund women's health and education in the US, Solomon Islands, Africa and Micronesia.
Farm to Girl is experiencing tremendous interest and they are continuing to grow. They have asked the Texas MSF student group to assist in their financial planning through constructing a financial model of the business that can be used for planning purposes. The group will also assist in sales and marketing through social media and other channels
- Invictus Water
Invictus Water provides a waste water solution for water used in hydraulic fracturing (fracking) in the oil and gas industry. Invictus just raised a significant amount of funding from VC investors to push the business forward, and the CEO Chris Kopacek is looking for help in virtually all facets of the business other than the technology. The MSF group will at minimum construct a financial model of the business, validating and constructing the Balance Sheet, Income Statement and Statement of Cash Flows, that can be used to project based on various future scenarios, help with market research and competitive analysis, and come up with additional ways to add value to this very exciting start-up.
- Raymond James
Energy MLPs are structured to provide a steady income stream in the form of regular quarterly dividends. Because the payment stream from an MLP resembles the payment stream of a bond, most investors believe that MLP shares perform poorly when interest rates increase. In today's low interest rate environment, many investors are worried that MLP shares will trade down when interest rates eventually begin to rise. However, energy MLPs are not exactly bonds, and there may be reasons why the presumed connection between rising interest rates and poor performance for energy MLPs is not as strong as people think.
Raymond James has asked the student group to investigate the investment performance of Energy MLPs with respect to interest rates. In short, the firm would like research and an analysis of the performance of energy MLP shares during times of increasing interest rates, times of decreasing interest rates, and times of relatively unchanging interest rates. The initial empirical analysis of a link between performance and interest rates should be followed by analysis into the cash flow structure of energy MLPs and how that structure might behave in different interest rate environments.
- Meritage Capital, LLC
Meritage Capital, LLC is a boutique investment management firm specializing in differentiated hedge fund solutions for family offices, high net worth individuals and institutions. The Texas MSF students will conduct research on global macro and managed futures strategies - - a core competency for Meritage Capital, LLC.
Some broad topics and parameters include: Definition of strategy and sub-strategies; Historical performance of strategy and sub-strategies; Role of strategies and sub-strategies within diversified asset allocation; Performance of strategy and sub-strategies within various market scenarios; Evaluation of our investments within context of broad universe; Overview of investment opportunities in strategy and sub-strategies.
Techstars is a three-month mentorship-driven accelerator program that provides teams with capital, guidance, M&A opportunities, business development and customer acquisition, and talent recruitment. Techstars is currently working on a set of financial model templates that can be used by the tech start-ups in the Techstars program. Start-ups of all kinds need financial modeling as a way to estimate future growth, revenue, and costs, and as a way to try and estimate value when it comes time to raise A-round money. Many entrepreneurs lack the financial modeling skills necessary to construct a meaningful and useful financial model of their business, but all start-ups need a working and useful financial model. Techstars would like a team of MSF students to help in developing template form financial models that will be as close to menu-driven as possible. The end goal would be a set of spreadsheets that Techstars could supply to start-ups as a tool to use in modeling their business. In addition to helping to create the financial modeling templates, the MSF team will have the opportunity in the spring to work with a Techstars company in building out a financial model and helping that company make valuable projections.
Employers interested in participating in our Practicum by submitting a project should contact firstname.lastname@example.org for more information.