Penn State Investment Association
The Penn State Investment Association was founded in the Fall of 1999 with the intention of providing students with a strong foundation in the functioning of the capital markets. In designing the organization, the primary founders, Sachin Aggrawal, Ali Chaudhry and Nathan Kline sought to involve students in the research, analysis, and maintenance of a securities portfolio using a hands-on approach that would effectively bridge the gap between classroom concepts and real world situations.
Moving forward to the Spring 2000 semester, the club existed in a trial phase and assumed the role of a provisional, not yet official, organization. At this point, the club maintained its exclusivity and carried out general meetings accordingly. At first, decisions were primarily made regarding geographic regions and research chairs reflected these areas as well. However, concentration shifted to sectors more closely reflecting the S&P shortly thereafter. Obtaining the authorization of the University for “official organization” status was of paramount importance during this period and was successfully granted. The founders attribute the ease of acceptance to PSIA’s interactive and realistic qualities, which differentiate it from virtually any other organization.
As interest in the club began to grow, the student leaders began to brainstorm ideas on how to turn the paper portfolio into a real fund with actual money. Although several attempts had been made in the past, this goal did not become a reality until 2004 when a team of students led by Sean Spillman and Jon Wyss assembled a marketing plan and business structure for what would eventually become the Nittany Lion Fund (NLF). The students presented the idea to faculty and convinced Professor J. Randall Woolridge to sign on. Soon after, pitches were made to Penn State alumni and the NLF received initial investment commitments.
In January of 2005 the first trades were made and the Nittany Lion Fund, LLC was born. The launch of the NLF was the culmination of the efforts of many groups and individuals. These include: the students involved in PSIA, both past and present, who pushed for the opportunity to invest real capital; the administration of Penn State and the Smeal College of Business, who provided both financial and administrative support for the formation of the Fund; the Fund’s Co-Managers, Board of Directors and Oversight Committee, who agreed to provide the leadership and guidance for the Fund; and last, but certainly not least, its investors, who were willing to invest the capital to make it all happen.
As members of the Penn State Investment Association (PSIA), the student fund managers had managed a paper stock portfolio for several years prior to the formation of the Nittany Lion Fund. This experience proved valuable in gaining insights into the investment process through the evaluation of stocks and overall portfolio management. However, the formation of the Nittany Lion Fund in January of 2005 challenged the student managers because they were suddenly investing real dollars and managing a real portfolio. The accountability for actions increased dramatically for all involved.
Currently, the Nittany Lion Fund and PSIA co-exist. The Nittany Lion Fund is a student-managed investment fund with $8.5 million in investor assets. PSIA is the student organization that assists the Nittany Lion Fund, LLC and is open for students of all majors and experience levels to join. Both organizations develop leaders who have landed careers with Investment Banks such as Bank of America Merrill Lynch and Goldman Sachs.