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.
2013-2014 Practicum Projects
- Acuitas Inc.
Acuitas, Inc is a valuation and litigation consultancy based in Atlanta. One of the areas the firm specializes in is measurement of fair value in business combinations. Many M&A transactions involve premiums paid by the buyer, and the students are tasked with researching where those premiums are reported in financial statements and whether or not the accounting treatment at the time of the deal may contain a signal regarding the prospects for success of the deal. Texas MSF students will work with a managing director of the firm to research any possible link between the acquisition premium paid, the level of goodwill recognized by the acquirer and subsequent impairment of goodwill, and will write a white paper on their research and findings and present their findings to the firm.
- Bank of Texas and Bank of Oklahoma
The Texas MSF student group will work on a live new business generation project with members of the sales organization at Bank of Texas/Bank of Oklahoma. The team will utilize a large proprietary database to assess the market opportunity for each of 10 BOK/BOT markets and make recommendations on good potential prospects by industry and location. The student group will research industries, economic conditions, and current BOK/BOT market penetration and make eventual recommendations to the firm on where they should focus prospecting efforts.
- Chesapeake Energy
A group of Texas MSF students will research the emerging U.S. liquid natural gas (LNG) exports market that has become increasingly important with the shale gas boom. The students will analyze the expected economic and industry effects of LNG exports, including how LNG exports will impact domestic natural gas prices, infrastructure costs, and future exploration and production costs. Finally, the group will discuss and present to management how an energy firm should best participate in the LNG market.
- Deloitte Financial Advisory Services - Project 1
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.
- Deloitte Financial Adivsory Services - Project 2
Deloitte FAS has sponsored a project that will allow a Texas MSF student group to use their excel modeling skills to perform a detailed valuation of an oil and gas company holding oil and gas interests located throughout Texas, Louisiana, Mississippi, and Kansas. The company also has interests in a small oilfield services company and some real estate investments. Employing a proprietary Deloitte case study that contains firm financial statements, reserve reports, and energy pricing data, students will model the valuation of XYZ Oil & Gas and perform extensive sensitivity analyses on underlying value drivers. Students will ultimately present their valuation model and results to consultants in Deloitte’s energy practice.
- Durbin Bennett Peterson
Texas MSF students will explore the potential diversification benefits of adding commodities to the usual asset-class troika of stocks, bonds, and cash. In the past, institutional investors have used allocations to commodity managers as a way to diversify their portfolio due to the lower correlation of this asset class to others. The student team will work alongside senior portfolio managers to research the factors that influence and drive commodity returns and if those factors may be replicated through the use of other liquid and investable means. Statistical analysis on passive index returns will be used to test for statistically significant correlations and factor analysis. The student group will also address whether the use of CTA/Global Macro strategies is a good proxy for commodity investments. At the conclusion of the project the group will present their findings to portfolio managers and partners at Durbin Bennett Peterson.
- Gerstein Fisher
Gerstein Fisher is a New York-based investment company specializing in quantitative core growth equity strategies for individual and institutional investors. Texas MSF students will work with Gerstein Fisher portfolio managers and research staff on the Gerstein Fisher Multi-Factor Global Real Estate Securities Fund to analyze investment factors related to international REITs. The student project will start with a literature review on international REITs and then will focus on an analysis of global REIT returns and some of the underlying factors driving those returns.
- Goshawk Global Investments
Goshawk Global Investments, LLC is analyzing capital allocation outcomes within the semiconductor industry and is focusing on a subset of companies and their performance over the last decade. The Texas MSF student group will perform quantitative and qualitative analysis on the industry and analyze the impact that capital allocation has had on shareholder returns. The student groups will work to answer the question: Should an activist manager target companies in the semiconductor industry given the above-average cash flow profile and below-average capital allocation decisions by management? Students will have the opportunity to work closely with senior portfolio managers at Goshawk and will ultimately provide the results of their analysis in both a paper and presentation to partners of the firm.
- Halo Coating LLC
Texas MSF students will evaluate an oilfield tank corrosion protection business. Halo Coating sand blasts and coats with various epoxies the interiors and exteriors of storage tanks at well-sites. Halo Coating operates primarily in the Barnett Shale and Permian Basin, servicing major oil producers, and is considering expansion options. The MSF student group is tasked with analyzing and evaluating opportunities for expansion and growth of the business, including an analysis of market definition and size, competition, cost of implementing various growth strategies, and potential risks. The group’s findings will be presented to the founder and manager of the company.
- JCPenney, Hart Systems and RILA
The Texas MSF student group will work with loss prevention professionals at JC Penney to examine the return on investment for remote monitoring systems and programs at JC Penney stores. The students will perform statistical analysis on shrink and safety performance at stores where remote monitoring has been installed and compare these results to those from stores without remote monitoring systems. Additionally, the group will receive data from the company and measure the value of the shrink and safety incident reduction in these stores and compare it to the investment costs for the remote monitoring systems. Finally, they may also have the opportunity to develop a survey for the store leadership team and District team to see what they think about the program. At the conclusion of the project the MSF student team will present their research and results to senior management at JC Penney and also to industry leaders at the RILA conference in spring 2014.
- Large Financial Institution
The Texas MSF student group will work with a Senior Vice President at a large, well established financial institution to explore opportunities for growing their Private Wealth Management business. Utilizing a large database of information of Financial Advisors, students will work to identify strong performers whose business might fit in well and who may be amenable to joining the firm. This is a live new business generation project that is designed to produce an actionable list of potential good prospects. A natural byproduct of the project is that the students will learn what key attributes are common in order to be successful in the Private Wealth Management industry, different structural approaches that have been utilized in the industry (types of business and team structures) as well as an opportunity to interact with senior management.
- Pennybacker Capital
Pennybacker Capital is a real estate private equity firm based in Austin, Texas. Principals at Pennybacker will work with a group of Texas MSF students to analyze and value commercial real estate related to Pennybacker’s investments. The students will have an opportunity to work on underwriting a project that has recently been completed to gain an understanding of the process of underwriting commercial real estate assets. Following the initial underwriting project, students will be involved in a live underwriting deal during the spring semester, and will be asked to build excel valuation and analysis models of potential live Pennybacker investments and to present their own opinion to Pennybacker investment managers.
PennzSuppress will work on a project with a group of Texas MSF students that is three-fold. Initially, the students will have the opportunity to evaluate a company in the dust suppressant, soil stabilization and erosion control business against their competitors to provide insight on competitive advantages and disadvantages. Secondly, the group will research social media and search engine optimization and provide recommendations to improve marketing outreach. Finally, the group will research and recommend the most effective advertising and marketing tools for a start-up company and how to optimize video and web site advertising and education. Overall, the students will work closely with management at PennzSuppress to grow the business by finding new customers and new markets for PennzSuppress products. This is a live project and the students have a real opportunity to add value to the firm through their research and ideas on marketing and new business acquisition.
- Teachers Retirement System - Project 1
Texas MSF students are initially tasked to research relevant academic literature on value investing in bonds and commodity futures and to provide a brief research summary for Investment Managers and Senior Associates. After the research review the group will utilize their Excel skills to evaluate metrics for measuring fair value for global government bonds and across multiple commodities. They will also consider trading and portfolio construction rules to profit from deviations from fair value in bond and commodities. Upon completion of the project, the student group will have the opportunity to present their project to a group of senior managers at TRS.
- Teachers Retirement System - Project 2
Content coming soon.
The Texas MSF Student group will have the opportunity to research and review various option pricing models used by academics and practitioners. The student group will evaluate non-broker pricing sources (e.g. Bloomberg, Thompson Reuters, Fintools) for various index level calls and puts in relation to pricing from widely-used option pricing models. Using these evaluations, the students will be tasked with building an Excel model to monitor pricing, implied volatility and put/call spread for a variety of options based hedges, including, but not limited to, buying and selling calls, buying and selling puts, various spread trades, straddles and strangles. At the conclusion of the project students will present their models and findings to investment managers at UTIMCO.
Employers interested in participating in our Practicum by submitting a project should contact firstname.lastname@example.org for more information.