A group of eight University students won the first place prize for the second quarter of 2017 in the Real Confidence University Challenge (RCUC).
Students from the Leon Hess Business School and the Kislak Real Estate Institute competed, along with students from 38 other universities. Overall, there were 190 students competing, and the competitors included prestigious schools such as Harvard University, John Hopkins University, and Penn State University. Students also pursued the possibility of winning up to $50,000 for their university’s programs.
“To be part of the team, you have to be nominated by a finance or real estate professor,” said Caitlin Kovacs, a student who graduated Monmouth in January 2017 with an MBA in finance. She was a teaching assistant (TA) in a finance class with Andreas Christofi, Ph.D., a professor in the finance department at the University; it was Christofi who asked her to join the team in the first place.
“We first started by figuring out if we wanted to invest in private equity, REITs, public, or private debt. Based on whether we wanted to invest in equity or debt, we then had to figure out what industry we wanted to invest in.”
The competition was created as an education tool for universities, to be used as an alternative teaching method, with aims at introducing real estate investing skills to students, according to the Real Confidence University Challenge’s website. With the challenge, faculty are able to pursue a distinctive approach to education, showing the benefits of commercial real estate.
The competition, sponsored by The Atlus Group, required the student teams to allocate a hypothetical one billion dollars in real estate assets in December 2016. The assets will be tracked throughout 2017.
“It was a very interesting combination of the skills we have in the business school and the real estate institute,” said Peter Reinhart, Esq., the Director of the Kislak Real Estate Institute at the University and a faculty adviser to the team.
The competition also uses on-site investment tools, which support education by offering back-testing portfolio methods, asset correlations, efficient frontiers, and all historical data access. The competition also allowed for all portfolio returns to be analyzed via Altus attribution software, which was able to determine the performance associated with allocation.
Quarterly prizes are given for the best ‘returns’ each quarter. Throughout the competition, the Monmouth University team allocation was heavily invested in the industrial public real estate investment trust (REIT) sector.
“I see the win as a testament to wonderful education I received at Monmouth University,” said Kovacs. “Going into the competition I felt that I was prepared and excited to apply the financial theories that I learned from Dr. [Andreas] Christofi’s ‘Investments’ courses and Dr. [Robert] Scott’s ‘Risk Management’ classes.”
“I also think the team dynamic and makeup largely contributed to our success, as we had students that specialized in the areas of finance, economics, and real estate,” Kovacs continued. “I think having a team that had this type of variety ultimately allowed us to make a sound investment decision that was appealing to an investor from each of these aspects.”
“Prior to the competition, our team met for several weeks,” said Christopher McKenna, an MBA student at the time of the competition. “We created charts and models before ultimately deciding to invest 100 percent in Industrial REITs. Our professors were instrumental in the process. We had an amazing group of professors who were just as invested in the competition as we were.”
Other University students included Greg Nardiello, Nick Casciola, Samantha Smallwood, Michael Wasylyk, Aashni Shah, and Zach McDermott. The faculty advisors for the team were John Burke, a specialist professor; Robert Scott, Ph.D., a professor of economics and finance; Barrie Bailey, Chair of the Economics, Finance, and Real Estate Department and associate professor; Reinhart; and Christofi.
“Students learn to work as a team [during the competition],” said Christofi. “[They learn to] respect each other’s opinion, and to appreciate different points of view. All of these are traits of an effective leader.”
Besides being an advisor to the team, Christofi nominated two of the students who participated in the competition, and advised the students to bet “100 percent of the money in the riskiest REIT, with the highest potential for reward/return.”
“Once again, we proved that Monmouth is capable of beating the country’s top universities. I hope we can maintain our momentum going into Q3 [quarter three].”
The competition will run through the remainder of 2017, ending in December. Reinhart expected that the final results would be calculated by “February or March”.
PHOTO TAKEN by Kerry Breen