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Alumni + Friends

Newsletter 2016 F I N A N C E

D E PA R T M E N T


TABLE OF CONTENTS 3 A Message from the Chair 4 Faculty News 6 CISDM 8 Student Initiative 10 Meet the Faculty 14 Research Seminars 16 About the Department 18 Academic Partnerships 20 Alumni Profile 22 Advisory Boards

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A MESSAGE FROM THE CHAIR

In the past year, Isenberg’s Finance department made new strides that built on our many established initiatives in curricula, student mentoring/ leadership activities, and industry engagement. As the largest among Isenberg’s seven majors, Finance contributes significantly to the school’s reputation and rankings. You may already know that Isenberg’s national rankings have risen sharply and steadily over the past five years. More good news came this year from Businessweek’s 2016 rankings of our BBA program. Isenberg ranked 1st in the Northeast and 11th in the nation among all public business schools. On recruiter satisfaction, we ranked 7th among all public business schools. These gains owe a great deal to Dean Mark Fuller, whose dynamic leadership has been critical in improving the student experience, increasing faculty research productivity, and energizing alumni outreach and fundraising. Isenberg’s educational experience in finance offers a rigorous, expansive curriculum with 4 tracks and 16 finance courses. This foundation is solidified with practical skills and experience through i) reallife money management of equities, fixed income, and alternative investments, ii) real-life financial cases in multiple courses, iii) real-life projects sponsored by seasoned finance industry executives, iv) student leadership through industry-focused finance clubs, and v) internship opportunities in the best financial firms in Boston, New York, and other large metropolitan areas.

to nearly 675 majors today has generated new opportunities for adding more tracks and courses in finance. Thanks to alumnus Jim Hyatt, a senior executive at Arbella Insurance, we are offering two brand new courses in insurance this year. On the student initiatives front, our five finance clubs have continued to excel in activities from hands-on money management to writing financial newsletters to organizing trips to network at major financial firms like BlackRock, JP Morgan Chase, and others. In a noteworthy accomplishment, the Isenberg Investment Club organized a stock pitch competition in April at the UMass Club in Boston. Stock pitch teams participated from the best colleges and universities in New England. , Top money managers from the financial industry judged the pitch performance of the various student teams. I am proud to share that the Isenberg team won first prize (the $5,000 Sidhu Award). Harvard and Yale placed second and third. In faculty news, our year in research was very productive with publications in the top academic journals and presentations at the best finance conferences in the country. We also added two new faculty members to our department. Fousseni Chabi-Yo joins us as a senior Assistant Professor of Finance. Professor Chabi-Yo is one of the top asset pricing researchers in the world. Robert Feingold joins us as an adjunct professor of finance. Mr. Feingold is Managing Director of high yield at Babson Capital Management, LLC, where he is a member of the firm’s fixed income team. He has over 15 years of executive experience in the fixed income field. High-profile faculty additions like these will continue to augment our department’s rising national reputation.

The exponential rise in the demand for the finance major from fewer than 300 majors five years ago

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FACULTY NEWS

Yesterday and Today: For Ben Branch, a 40-year Career at Isenberg Continues to Resonate

Yesterday and Today: For Ben Branch, a 40-year Career at Isenberg Continues to Resonate “In my courses on investments, I try to include what’s happening in the here and now,” notes Isenberg finance professor Ben Branch. “Something is always going on—Brexit, changes in factors like monetary policy, exchange rates, and regulations—you name it.” Peppering his teaching with articles from the financial press, he emphasizes, illustrates how financial theory plays out in practice. It also shines a light on the financial system’s nuances and interconnectedness. And without question, it reflects Professor Branch’s deep, abiding passion for policy discussions.

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Now in his 42nd year at Isenberg, Professor Branch has taught investments, corporate finance, and other financial topics to the school’s undergraduate and graduate students since 1975. “When I arrived here after five years as an assistant professor at Dartmouth, the school was a very different place from what it is today,” he recalls. “I joined what was for many years the Department of General Business and Finance, Branch continues. “In addition to its five bona fide finance professors, it included faculty who specialized in real estate, insurance, regional economics, management science, and business law. There was a divide between the younger and older faculty, many of the latter who did little or no research. Today, everyone on Isenberg’s finance faculty is extremely productive in both teaching and research.”

Research Informed by Practice Branch’s own research has explored diverse topics in investments, strategic planning, futures markets, and corporate finance. He is perhaps best known as an expert in bankruptcy investing, bankruptcy management, and distressed asset valuation. Two of his books, Bankruptcy Investing: How to Profit from Distressed Companies (Beard Books) and Last Rites: Liquidating a Company (Oxford University Press) (the latter’s book jacket evocatively graced in funerary black)—have tackled those topics systematically. And separate studies with international graduate students have dissected the bankruptcy systems of Russia, South Korea, China, Uzbekistan, Romania, Ukraine, and India. (Most have appeared in editions of the Annual Survey of Bankruptcy Law.) Those studies, says Branch, shed light on international variations in bankruptcy laws and practice, including the U.S. system’s own defining characteristics. “Our own bankruptcy laws, including Chapter 11, demonstrate our proclivity to

give businesses a second chance,” he observes. “Another distinguishing feature of our system is its superior commitment to enforcing contracts and equity rights.” Branch’s insights on bankruptcy and liquidation are informed by his own hands-on experiences. Beginning in the late 1980s, he managed the estates of a handful of large bankruptcies, including the First Republic Bank (a Texas-based commercial bank), Vlasic Foods (a.k.a. VFB KKC), and the Bank of New England, the biggest bank failure in the region’s history. For Branch, the latter was a multidecade learning experience, in which he ultimately recovered hundreds of millions of dollars for his clients—(principally) the bank’s bondholders. In a tangled web of maneuvers, Branch and his legal associates sued former Bank of New England directors and officers, Goldman Sachs, and Ernst & Young. They also parlayed millions of dollars in legal research and maneuverings against the FDIC, yielding results via private mediation.

Personal Investment Insights A seasoned personal and commercial investor, (his current investments include residential real estate properties in Tampa Bay), Professor Branch is also the author of If You’re So Smart, Why Aren’t You Rich?: A Guide to Investment Fundamentals (Praeger). Written in part as cautionary advice to individual investors, the book explores strategies tailored to different investment vehicles and domains, including mutual and closed-end funds, bankruptcy opportunities, takeovers and risk arbitrage, and real estate. At the same time, it shows how to time the market, incorporating macroeconomic trends. Above all, Branch discourages getrich-quick gambits: “If you want to get rich quickly, marry well or play the lottery and pray,” he writes. “If you are willing to settle for a shot at getting rich slowly, read on.”

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CISDM

Financial Pundits Propel Isenberg Research Conference “Fragile Markets, Financial Bubbles and Credit Markets” was the central theme of the Center for International Securities and Derivatives Markets’ (CISDM)* annual research day on October 9th. At the day-long gathering, a standing-room-only audience, including prominent Isenberg alumni and other influential industry practitioners, exchanged insights with the event’s principal speakers, headlined by Nassim Taleb, author of The Black Swan and other high-profile studies. Apart from his own presentation, Risks, Black Swans, and Fragile Markets, Taleb joined forces with National Bank of Greece chief risk officer Alexandros Benos, Bloomberg journalist and commentator Justin Fox, and Babson Capital managing director Dave Nagle in a panel discussion that explored financial bubbles, volatility, and contagion. Moderated by Isenberg finance professor Ben Branch, the discussion touched on a host of issues, including different flavors of liquidity during

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normal versus extreme times, investment timing around bubbles, and the fragility and freefalls triggered by excessively optimized financial markets.

Countering Fragility In his keynote talk, Taleb, a former lecturer at Isenberg, further explored the relationship between fragile financial systems and extreme “black swan” financial events—happenings that can take an investment bank, financial district, or economy down like a house of cards. “You can model everything that’s fragile as short volatility,” he told the gathering. Better to bake in judicious long-term doses of volatility that will secure “antifragility” in the system, he advised. The collapse in Greece runs deeper than financial, debt-driven concerns, observed Alexander Benos in his dissection of that country’s sovereign debt crisis. At bottom, the crisis is economic and cultural, reflecting a failed state where tax collections


About CISDM and debts are inconsistent and inconsistently buttressed by the rule of law. As a solution, austerity alone is insufficient; debt, he emphasized, must be serviceable. Complementing the event’s stellar guest speakers, Isenberg finance professor Nikunj Kapadia presented a paper that explored financial volatility. “It highlighted some of our own timely research in that critical area,” observes CISDM director Hossein Kazemi, who is Michael and Cheryl Philipp Professor of Finance at Isenberg. “Our last two research conferences have emphasized themes with public policy implications,” Kazemi continued. “Last year, our speakers tackled development and sustainability issues. The bottom line for us is to convey the central, significant value of our research for all of our stakeholders.” The 2016 CISDM Conference will be held on October 28, featuring keynote speaker Dr. Bob Litterman, a founding partner of Kepos Capital. *For two decades, CISDM has been at the forefront of research, education, and practical applications involving derivatives, alternative investments, and asset and risk management.

The Center for International Securities and Derivatives Markets (CISDM) was established through the generous support of Michael Philipp and Anshu Jain, both graduates of the Isenberg School. Since then, other UMASS graduates as well as other supportive corporate and individual contributors have enabled CISDM to build on these contributions to provide opportunities for graduate and undergraduate students to involve themselves directly in financial markets research. CISDM places the Isenberg School in the forefront of academic institutions that conduct research into derivatives, alternative investments and asset and risk management. CISDM promotes interactions between the academic and business communities, and is home to CISDMMorningstar Hedge Fund Database. The research and education initiatives of CISDM are largely supported by individual and corporate gifts. We sincerely appreciate your support. Please visit www.isenberg. umass.edu/CISDM/ if you wish to donate to the center.

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STUDENT INITIATIVE

Future Business Leaders Exceed Expectations Taking place at the Umass Club in Boston, around the heart of avid business individuals and entrepreneurs, the first annual Isenberg Pitch Conference administered an intellectual and hospitable experience. The conference was well received by over 150 Umass Amherst students, professors, alumni and industry professionals as an excellent opportunity for academic growth and practice with investment research and presentation skills. The attending students could communicate with professional individuals within the investment field, and learn from students from varying universities. The day kicked off with a presentation by Keynote Speaker Christopher Rapcewitz. As the Director of Risk and Operations at Helmsley Charitable Trust, Mr. Rapcewitz provided an exclusive and insightful analysis on his investment and risk prevention strategies regarding the Trust’s investments across all asset classes. He enlightened the audience on the ways in which the operations and regulations of a trust differ from that of other hedge funds and business entities. Following suit were the stock pitches. The com8

peting teams included Amherst College, Boston University, Harvard University, Isenberg School of Management of the University of Massachusetts, Amherst, the University of Connecticut, and Yale University. Presenting companies from a wide variety of industries, each school compiled and presented thoughtful evidence that displayed months of research. Each team had a unique approach and methodology as to why their company is a good investment, which allowed those watching to observe a multitude of ways to approach stock and investment research. After each presentation, the judges asked knowledgeable questions that provided more depth and analysis to the presentations. Winning the competition was the Isenberg School of Management, with Harvard and Yale coming in second and third respectively. The purpose of the competition was to promote students researching the current standings of these stocks and present their investments in a way that would make real investors feel that they would be making a sturdy financial decision. The students exceeded the expectations of the criteria that the


judges used to critique them and all provided strong cases towards their investments. Many perspectives were brought to the table, including two teams who presented the same stock in two distinctly different lights. An Investment Professional Discussion Panel moderated by the Chairman of the Finance Department, Sanjay Nawalkha. The panel answered a wide range of prepared questions and questions inquired by the attending students with respect to the state of the macro economy, details concerning the structure and strategies of their respective firm, and their personal investment strategies. This aspect of the conference provided students with an opportunity to obtain personal insight and useful investment research ideas from individuals of varying professions. The panelists for the conference included Gary Cameron, former Managing Director at JPMorgan, Jonathan Kasen, Portfolio Manager at Fidelity Management and Research Company, Peter Lupoff, Founder and CIO of Tiburon Capital Investment, and Michael Temple, Senior Vice President and Director of Credit Research at Pioneer Investments. The day ended with a networking reception attended by various top firms. Students, alumni, and faculty interacted, giving students were given an incredible opportunity to interact with other undergraduates with similar interests and introduce themselves to alumni in order to expose themselves to the business field and gain valuable contact information. This event was built on student initiative to build relationships, networks, and expand business acumen in the field of Finance. The Investment Club, with the help of Isenberg faculty, administration, and staff, brought together future business leaders to compete in this Pitch Conference. Students came from not only the finance major, but engineering, marketing, hospitality and tourism management, and economics. These student initiated events, along with the support of our community, are essential as it provides further academic insight through a new learning environment that integrates individuals from across the Northeast. 9


MEET THE FACULTY New Faculty, Fall 2016

Fousseni Chabi-Yo Assistant Professor of Finance joins Isenberg this fall as Assistant Professor of Finance after serving in the same role at The Ohio State University’s Fisher College of Business and as a research economist at the Bank of Canada. His research interests include theoretical and empirical asset pricing, heterogeneous investors in the financial market, behavioral finance, derivatives, higher moments premium, and financial econometrics. Professor Fousseni’s research has been published in top finance journals, including recent articles in the Journal of Financial Economics, Review of Financial Studies, Management Science, Journal of Economic Theory, and the Journal of Banking and Finance. Professor Chabi-Yo received his Ph.D. in Economics from Université Montreal in 2005. He earned a Master in Economics and Statistics from ENEA (Dakar, Senegal), a Master in Applied Mathematics from the University Cheikh Anta Diop (Dakar, Senegal), and a Bachelor’s degree in Mathematics and Physics from Universite d’Abomey Calavi (Benin).

Robert M. Feingold Rob Feingold joins Isenberg’s finance faculty this fall from Babson Capital Management LLC. At Babson, Rob was a Managing Director, a Portfolio Manager, and Group Head for the Alternative High Yield/Global Event-Driven Investments Team. He has over 20 years of investment experience, specializing in high-yield credit, small-cap equities, and distressed debt. Rob managed various hedge fund strategies for over a decade and several other absolute return strategies before launching the hedge fund business unit. Before Babson, Rob worked as Vice President and high-yield analyst at Wellington Management Company and as an investment banker at Houlihan Lokey, a boutique investment banking firm specializing in financial restructuring and equity valuation. Early in his career Rob joined Fleet Bank’s credit training program, subsequently working as a portfolio manager in Fleet’s middle market lending group. Rob earned a B.S. in Finance, magna cum laude, from Georgetown University and an M.B.A. from Northwestern University’s J.L. Kellogg Graduate School of Management with concentrations in Finance and Management Strategy.

Nikolaos Artavanis Assistant Professor of Finance Professor Artavanis does research in the fields of asset pricing and financial crises. He is the recipient of the 2013 WRDS-Wharton Best Empirical Paper in Finance Award at the WFA meetings. His research is published in the Quarterly Journal of Economics, and has been featured extensively in the U.S. and international financial press, including The Financial Times, The Wall Street Journal and The Economist, among others. He has received many awards, honors and grants for his research and teaching. He holds a joint appointment with Isenberg and UMass Amherst’s Commonwealth Honors College. In that role, he works closely with Honors students in his capstone course on financial crises.

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Ben Branch Professor of Finance Professor Branch is an expert in bankruptcy investing, bankruptcy management, and valuation of distressed assets. He has managed the estates for several large bankruptcies, including those of banks and other corporations, and has been a director on several corporate boards. He has authored several books on bankruptcy management and investing, and is widely published in professional journals, including the Journal of Finance, Journal of Business, Journal of Political Economy, Journal of Financial and Quantitative Analysis, The Antitrust Bulletin, The Harvard Business Review, The Sloan Management Review, Journal of Business and Economics, Financial Management, Global Finance Journal, and Journal of Alternative Investments. Dr. Branch is a member of the Academic Advisory Council of the Turnaround Management Association. He is a member of the Financial Management Association and a member, past President, and past Trustee of the Eastern Finance Association. His teaching interests include investments, corporate finance, industrial organizations, and financial institutions.

Ginnie Gardiner Finance Lecturer Ginnie Gardiner, an associate professor from The University College of the Cayman Islands, joins us as a lecturer in the finance department. She enjoys teaching all courses in finance but her research is primarily in real estate where, as a lifetime member of the American Real Estate Society, she has published in, e.g., The Journal of Real Estate Finance and Economics, The Journal of Real Estate Research, and The Journal of Real Estate Appraisal and Economics, The Business Journal of the Cayman Islands.

Gardiner earned her BSBA and MBA from The University of Southern Mississippi and her PhD from The Terry College of Business at the University of Georgia. She has enjoyed trading and investing in securities since 1982. Ginnie has served on numerous non-profit boards such as her condominium strata, charter schools, Cayman Islands Red Cross, Financial Executives International (academic liaison), private lake community development, et al.

Nikunj Kapadia Professor of Finance Nikunj Kapadia is a Professor of Finance at the Isenberg School of Management, University of Massachusetts, Amherst. He holds a Ph. D. in Finance from the Stern School of Business, New York University, an MBA from the Indian Institute of Management, Bangalore, and an undergraduate degree in engineering from Maharaja Sayajirao University, Baroda. He has published articles in the Journal of Financial Economics, Journal of Finance, Review of Financial Studies, Journal of Derivatives, and the Journal of Alternative Investments. He has served on the editorial board of the Financial Analyst Journal, and is currently on the editorial board of Journal of Derivatives. He is the recipient of the Isenberg School Teaching Award for 2007-08, Isenberg School Researcher of the Year Awards for 2006-07 and 2011-12, Western Finance Association’s Caesarea Best Paper in Risk Management award for 2005, and a 2004 Fellow of the Federal Deposit Insurance Corporation. He has served as an independent Director on the board of AurionPro Solutions (listed on the Bombay Stock Exchange), and held a visiting researcher position with the Office of Financial Research of the United States Treasury. Prior to joining the University of Massachusetts, he was with Bear Stearns, New York. 11


MEET THE FACULTY Hossein Kazemi Michael and Cheryl Philipp Distinguished Professor of Finance Professor Kazemi is the Director of the Center for International Securities & Derivatives Markets. He has written over 30 scholarly articles in various areas of finance and has co-authored four books on asset allocation, investment management, and alternative investments. He is a Senior Adviser to the Chartered Alternative Investment Analyst (CAIA) Association, where he helps with the development of the CAIA program’s curriculum and directs the CAIA Association’s academic partnership program. In addition, he serves as the editor of Alternative Investment Analyst Review, which is published by the CAIA Association. His research has been in the areas or valuations of equity and fixed income securities, asset allocation for traditional and alternative asset classes, and evaluation and replication of active management investment products.

Nelson Lacey Professor of Finance Nelson Lacey is a Professor of Finance at the Isenberg School of Management at the University of Massachusetts in Amherst. He is a CFA charter holder. Professor Lacey teaches in the areas of corporate finance, markets and institutions, risk management, and banking. He has extensive teaching experience both in the United States and abroad in countries such as Poland, Russia, Portugal, the Czech Republic, Greece, and Sweden. Professor Lacey has authored and co-authored over 40 articles in areas such as interest rate risk management and control, corporate ethics, sports betting markets, and derivatives. Recent invited talks include investing for the long run, liquid alternative investments, and teaching in large lecture classes. He currently consults for the Chartered Alternative Analyst Association where he holds the position of Director of Examinations.

Bing Liang Professor of Finance Bing Liang is Professor of Finance and The Dean’s Faculty Fellow at Isenberg School of Management. He was a visiting scholar at London School of Economics and visiting professor at Yale University as well as Shanghai Advanced Institute of Finance. He received his M.S. in Statistics from Chinese Academy of Science and Ph.D. in Finance from the University of Iowa. His research interests are capital market efficiency, mutual funds and hedge funds, risk management, and empirical methods in finance. He has taught undergraduate, MBA, MS, EMBA, EDP, and PhD students at various institutions. Professor Liang has published numerous articles in leading academic and practitioner journals. His papers have been cited by the Wall Street Journal, Financial Times, The Economist, Business Week, Forbes, and Barron’s. He is one of the invited panelists for the SEC’s Roundtable on Hedge Funds. He served as the Senior Risk Advisor for Entrust Capital Inc. and an expert for Analysis Group. Professor Liang is an editor for Journal of Alternative Investments and is on the editorial boards for Journal of Investment Management, European Financial Management, and Journal of Investment Consulting. He is the Guest Editor for European Financial Management’s Special Issue on Hedge Funds. Professor Liang has won numerous awards including the prestigious Graham and Dodd Award.

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Matthew P. Linn Assistant Professor of Finance An assistant professor in Finance, Matthew Linn has research interests in empirical and theoretical asset pricing, financial econometrics, options, and credit risk. With PhDs from the University of Michigan in both finance and statistics, he brings research and teaching prowess in finance and its mathematical foundations. Dr. Linn has published in the journals Communications on Stochastic Analysis and Stochastic Processes and their Applications. He has taught classes in financial management, probability, and statistical analysis of financial data. At Isenberg, he is teaching mezzanine-level courses in risk management and fixed income.

Sanjay Nawalkha Professor and Chairman of the Finance Department and the Rupinder Sidhu Faculty Fellow in Finance Professor Nawalkha is an expert in fixed income derivatives and interest rate risk management. He has authored scholarly books in different areas of fixed income, and has published numerous articles in academic and practitioner finance journals, such as the Journal of Financial Economics, the Journal of Fixed Income, Financial Analysts Journal, and the Journal of Derivatives. He has presented his work at national and international conferences, provided consulting services to large financial institutions, and given invited lectures to foreign central banks. Professor Nawalkha is associate editor of the Journal of Investment Management. He is co-founder of the finance portal, fixedincomerisk.com, which provides software and other resources for valuing fixed income derivatives. Under Professor Nawalkha’s leadership, the finance department has grown significantly, and currently offers sixteen finance courses and four track specializations to over 600 undergraduate finance majors. He teaches a variety of doctoral courses including interest rate modeling, option pricing, and credit risk and return modeling. His teaching style emphasizes a holistic view of finance based on the philosophy of enlightened self-interest.

Mila Getmansky Sherman Associate Professor of Finance Professor Sherman has diverse research interests that include empirical asset pricing, hedge funds, performance of investment trading strategies, financial institutions, systemic risk, and system dynamics. She teaches courses in corporate finance, financial modeling, and alternative investments to MBA students and undergraduates. She is an associate director of the Center for International Securities and Derivatives Markets (CISDM), which facilitates research in international investment and derivatives markets, and interactions between the academic and business communities. Her work has appeared in the Journal of Financial Economics, Review of Financial Studies, Financial Analysts Journal, and the Journal of Investment Management. Professor Getmansky Sherman is an associate editor of the Journal of Alternative Investments. She is a recipient of awards and grants from the Q-Group, National Bureau of Economic Research, Inquire-Europe, and National Science Foundation. She also received Isenberg’s Outstanding Research Award. Before joining UMass Amherst, Professor Getmansky Sherman worked in the quantitative research group at Deutsche Asset Management in New York and was a postdoctoral fellow at the MIT Lab for Financial Engineering.

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SPECIAL PROGRAMS

Isenberg Finance Research Seminars This past year, the Finance department reformed its research seminar series to create a compact, high-quality set of research presentations. This new series, the Isenberg Finance Research Seminars, aim to bring in Isenberg prominent scholars, from the best research institutions around the world, to present their most current work.

The seminars greatly benefit our Ph.D. students and faculty by exposing them to the latest finance research. Additionally, they foster an ideal environment for the exchange of ideas and provide valuable feedback to presenters on their work. Students have the opportunity to meet presenters after the completion of each seminar.

During the 2015-16 academic year, we were proud to host, in the context of our seminar series, research presentations by Stefan Nagel (University of Michigan), Ron Masulis (University of South Wales), Ron Kaniel (University of Rochester), Gurdip Bakshi (University of Maryland), Tyler Shumway (University of Michigan), Margarita Tsoutsoura (University of Chicago), Sergey Chernenko (Ohio State University), and Mohammad Jahan-Parvar (Board of Governors, FED).

The research presentations are typically held on Friday mornings in Isenberg on designated dates. They are open to the public and also faculty and Ph.D. students of other departments, our alumni and market practitioners. If you would like to be informed for upcoming seminars, please send an email to nartavanis@isenberg.umass.edu and ask to be added to our mailing list.

In this coming year, following the same concept, we are happy to announce that the Isenberg Finance Research Seminars will include research presentations by prominent scholars with significant contributions in our field.

The Department of Finance gratefully acknowledges financial support by the Isenberg Deanship in organizing the Isenberg Finance Research Series. Nikolaos Artavanis, Research Seminar Coordinator

Seminar Schedule 2016-2017 Speakers

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Ian-Haw Cheng

Associate Professor of Mathematics, UMass Dartmouth

Slavas Fos

Assistant Professor of Finance, Boston College

Kris Jacobs

C.T. Bauer Professor of Finance, University of Houston

Richard Sias

Tyler Family Endowed Chair & Professor of Finance, University of Arizona

Wayne Ferson

University of South Carolina


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ABOUT THE DEPARTMENT

BBA in Finance Finance students don’t just study money; they study how money interacts with risk and time. Understanding this relationship is key. It allows finance BBAs to help individuals, companies and governments make wise decisions about managing capital, borrowing and investing funds, optimizing returns, and staying financially sound. It’s no small task, and at Isenberg, we prepare our students for the job by offering: Hands-on experiences with case method teaching, real-time data access though Bloomberg terminals, internships with the best financial firms, real-world money management through the Minutemen family of funds, and student club activities that develop core competencies for tackling complex financial problems. • A Rigorous, progressive curriculum that exposes the students to current issues and prepares them for new challenges and opportunities in the financial industry • Specializations that impart how to raise debt and equity capital, evaluate profitability and riskiness of projects, value small businesses and large

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corporations, and make traditional and alternative investments in global financial markets. The expansive and rigorous curriculum with an honors capstone sequence provides many choices and opportunities for students to specialize in one or more of four different tracks: Corporate Finance, Financial Analyst, Financial Risk Management, and Alternative Investments. • Financial support for travel and networking with alums, participating in case competitions, inviting executive speakers to the classroom, and obtaining scholarships to take industry certification exams. The expansive and rigorous curriculum with an honors capstone sequence provides many choices and opportunities for students to specialize in one or more of four different tracks: CORPORATE FINANCE - raising capital, investing in projects and managing working capital FINANCIAL ANALYST - investments in traditional assets such as stocks and bonds RISK MANAGEMENT - risk management of financial institutions, such as large banks and insurance companies


ALTERNATIVE INVESTMENTS - hedge funds, commodities, financial derivatives, real estate and private equity

MBA with a Focus in Finance The Isenberg MBA with a Focus in Finance offers a mix of general business and finance elective courses. This MBA is ideal for individuals who aspire to careers in corporate finance, venture capital, or consulting. Additional focus areas in finance through Advanced Investments and Risk Management have considerable value for future careers in investment banking and commercial banking. Isenberg faculty members have extensive experience in delivering state-of-the-art business education both onsite and online. As an early leader in online education, the Isenberg online MBA program—with nearly 1300 students -- is ranked 7th best in the nation and 11th best in the world by The Financial Times, and 12th best in the nation by U.S. News and World Report.

search and undergraduate-level teaching. Students make significant contributions to modern financial economics and position themselves to pursue successful careers in academia and industry. In the last 10 years, our students have published in premier journals, including the Journal of Finance, the Journal of Financial Economics, the Journal of Financial and Quantitative Analysis, and Management Science. Our program’s core competencies are: • Research-oriented faculty who work closely with our students from day one. That hands-on mentorship helps prepare students to write compelling dissertations. • Internationally recognized research in financial investments focusing on different types of risks including liquidity risk, interest rate risk, credit risk, operational risk, bankruptcy risk, counterparty risk, systemic risk, stochastic volatility risk, and tail risk. • Outstanding research resources, including The

PhD in Finance

Center for International Securities and Derivative

The Ph.D. program in finance offers students an opportunity to engage in scholarly academic re-

research in alternative investments.

Markets (CISDM), a leading center at Isenberg for

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ACADEMIC PARTNERSHIPS

CAIA The CAIA Association, a nonprofit organization founded in 2002 through the joint efforts of CISDM and the Alternative Investment Management Association, is the world leader and authority in alternative investment education. The CAIA Association sponsors the CAIA Charter, an internationally recognized credential granted upon successful completion of a rigorous two-level exam series, combined with relevant work experience. The CAIA Association has recently introduced the Fundamentals of Alternative Investments, a new certificate program designed for investment professionals who wish to gain a basic introduction to alternative investments. Having grown rapidly, the CAIA Association now supports vibrant chapters in financial centers around the world and sponsors more than 120 educational and networking events each year. For the past 5 years, the CAIA Association has established a number of academic partnerships with learning business of the world. Qualified students and faculty receive scholarships to take the CAIA Charter exams. Isenberg is an academic partner of the CAIA Association.

JAI The Journal of Alternative Investments (JAI) provides its readers with cutting-edge research and expert analysis on managing investments in hedge funds, private equity, distressed debt, commodities and futures, energy, funds of funds, and other

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nontraditional assets. JAI is the official publication of the Chartered Alternative Investment Analyst Association. JAI provides readers with challenging ideas and practical tools to profit from the growth of hedge funds and alternatives, determine the optimal mix of traditional and alternative investments, measure and track portfolio performance, and manage alternative investment portfolios. JAI is read by hedge fund managers, portfolio managers, academics, and senior investment officials at corporations and financial institutions. Its editorial board members are Professors Kazemi (Managing Editor), Getmansky Sherman (Editor), Liang (Editor) and Noel Amenc (Edhec).

Leadership Professor Dr. Hossein Kazemi, is the Senior Advisor to the CAIA Association’s Program. He helps with the development of the CAIA program’s curriculum and directs the CAIA Association’s academic partnership program. In addition he serves as the editor of Alternative Investment Analyst Review, which is published by the CAIA Association. Dr. Kazemi has been involved in the CAIA Association since inception as a senior adviser and board member. In addition, he has worked with universities and industry organizations to introduce them to the CAIA program. Dr. Kazemi is currently the Director of the Center for International Securities & Derivatives Markets, a nonprofit organization devoted to research in the area of alternative investments, a co-founder of the CAIA Association, and home to CISDM Hedge Fund/CTA Database and the Journal of Alternative Investments, the official research publication of the CAIA Association.


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ALUMNI

Isenberg Alum Share Financial Trading Insights “By nature, I’m a trader,” observed Gary Cameron ’89 in an October visit to Professor Mila Sherman’s class, Alternative Investments. The Isenberg alum had just departed J.P. Morgan Chase after 18 years, the last 8 ¾ years as managing director of USD swaps. (Gary was on the firm’s board of directors of ISWAP North America, the premier swaps execution facility, from 2012-2015.) “I’ve traded derivatives my entire career,” Gary told the students. Among the personal attributes that make for a successful trader, Cameron gave high points to “the ability to hold an evaluation matrix in your head”—to devise alternative what-if scenarios and outcomes. At the same time, “You can’t be too smart. You’ll talk yourself out of everything,” he said.

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You also have to balance analytical prowess with interpersonal skills that support relationships, he continued. “Most important is trading with a complete lack of ego,” he emphasized. “We’re all Type A’s.” When things go awry—and they will—you have to accept and move on. Cameron also emphasized integrity. “My teams have been 100% honest,” he remarked. You have one chance at it—to secure your good name. If you cut corners, you will get caught, he insisted.

Precarious Bubbles And Their Aftermath Cameron’s classroom talk explored managing the effects of margin debt in financial markets. He discussed hedging against volatility and potential


Faculty Fellows bubbles, by deploying derivatives, swaps, and other financial instruments. “People get ahead of themselves,’ he observed, citing excessively leveraged, demand-obsessed markets and their precarious bubbles. The I senberg graduate was in the thick of financial crises as a trader during the late 1980s freefall, the internet bubble of 2000, and the Great Recession of 2008 with its real estate crisis. During the latter, a paralyzed financial community turned to the U.S. government, which responded with TARP legislation—for better and for worse. To explore margin debt, consider China, said Cameron, with its 50% portfolio leverage. Unlike Europe, which mistrusts equities markets, China finds them exciting. In short order, China created the world’s second largest economy. But the market has come down 35%, he told the students. Cameron is overseeing a team of six students in Sherman’s class who are dissecting recent high equity market volatility and weakness. Much of the upward price action appears to have originated in China. “What I’ve asked you to work on is a tall order,” Cameron remarked. “Which stock do you think best represents China? Is it Ali Baba? Should you buy it or short it?”

Dr. Sanjay K. Nawalkha, Professor and Department Chair, was the recipient of Rupinder Sidhu Fellowship in Finance. Dr. Sidhu (alum, MBA class of 1977) had a highly successful career in finance. He was the Co-Founder and Managing Director of Arena Capital Partners, and now serves as a Director at EverHome Mortgage Company, Gemini Industries, Inc., Callipso Corporation, Clinton Mills, Inc., Wherehouse Entertainment, Inc. and CMI Industries, Inc. The Rupinder Sidhu fellowship supports Dr. Nawalkha’s innovative work as department chair, driving curricular innovations, creating student opportunities, and fostering a positive departmental culture for both teaching and research. The fellowship also provides $25K annually for supporting various initiatives in the BBA program in finance at the Isenberg School.

Dr. Bing Liang, Professor, was the recipient of the Dean’s Faculty Fellowship. The fellowship rewards Dr. Liang’s scholarly contributions in the areas of hedge funds, risk management, and institutional investors, and supports his innovative work and curriculum development for the BBA program in finance.

Growing Job Market Leverage For Isenberg Students At J.P. Morgan, Cameron has been a catalyst in securing internships for Isenberg students. He and his employer have not been disappointed. “Almost every intern has gotten a job offer,” he remarked. “In fact, UMass has the highest retention rate of any school in our program. When I was at Isenberg, a UMass degree did not open doors [on Wall Street]. That is changing. Have pride in I senberg and your degree!”

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FINANCE ADVISORY BOARDS

The Finance Advisory Board (FAB) is composed of 20 global business leaders, finance innovators and creative visionaries. Many members of the FAB are also graduates of the Isenberg School and they share a keen appreciation for the mission of the School. The FAB advises and supports the department in developing deep and mutually beneficial relationships with global corporations, government partners, foundations and other appropriate organizations. The FAB collaborates with the dean, chair, faculty, staff, and students and to fulfill the School’s mission by driving and facilitating corporate engagement, providing counsel and feedback, and supporting and advocating for the finance department and the Isenberg School. The board plays a key role in helping to shape the School’s future and to advance its academic and research excellence by: Identifying and cultivating potential corporate and organizational relationships. Supporting career opportunities for students. Envisioning new educational initiatives. Shaping new research agendas. Promoting philanthropy toward the department and Isenberg School.

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Finance Advisory Board Gary Cameron Managing Director, JP Morgan Chase

Michael Carne CFA, Senior Investment Management Executive, Portfolio Manager, NWQ Investment Management

David Caruso Founding Chairman, Coastal Capital Group

Harjeet Chopra Managing Director and Country Risk Officer, Citi Singapore

Kristin (Slusser) Fafard Chief Investment Officer, Federal Street Advisors

Peter Hadelman Principal, Copper Rock Capital Partners

David Harris Senior Fixed Income Portfolio Manager, Schroders

Jerry Hong President, Qfour Inc. (prior experience at ZAIS Group, and Merrill Lynch)

Kerry Hueston Analyst, Surveyor Capital, Citadel, LLC

Elizabeth Husted, Retired Managing Director (2006), Goldman Sachs

Jim Hyatt Senior VP of Personal Lines, Arbella Insurance Group (prior experience at Hanover Insurance Group)

Gordon Johnson Managing Director, Global Equities at LMCG Investments

Chuck McQuaid

Young Finance Advisory Board Alex Ambroz Executive Director, Miner Partners

Jonathan Barron Director, John Hancock Financial Services

Nicole Bisson Investment Analytics and Communications Business Associate, Wellington Management

Adam Ferrarini Vice President, Ares Management

Martin Greenberg Founder, Launchpad

Ryan Harwood Launch Research Associate, Wellington Management

Sam Laorenza Financial Advisor, Northwestern Mutual Financial Network

Aaron Liebhaber Vice President, Credit Suisse

Martin Lindberg Vice President, Research, The Millburn Corporation

Melissa Lockett Vice President, Citi

Sean McDavitt Manager, Special Projects, CIOX Health

Michael McDonough Senior Consultant, FTI Consulting

Daniel Mis Vice President, Fidelity Investments

Former Chief Investment Officer, Columbia Wanger Asset Management

Ted Morton

Nandan Mer

Arpit Patel

Group Executive, Global Consumer Credit, Mastercard Worldwide

Business Associate, Wellington Management

Dave Nagle

Investment Management Analyst, Fixed Income at J.P. Morgan

Managing Director and Head of Investment Grade Portfolio Management, Barings

Cliff Noreen President, MassMutual

Asst. VP, Wellington Management

Kristin Peters

Chad Rubin CEO, Skubana

Ozi Sander

Michael Philipp

Associate, Citi

Chairman, Reykjavik Geothermal (also at AMBATA and First Artist Bank)

Andy Toussaint

Charles Robinson Vice Chairman, Rogers & Gray Insurance Agency, Inc.

MBA Candidate, University of Chicago

Brian Young Senior Analyst, Finance and Strategy, The Trade Desk

Rupinder Sidhu Retired Co-Founder and Managing Director, Arena Capital Partners (prior experience at Merion Capital Managament, LLC, and Merrill Lynch)

Kristen Walters Managing Director, Risk and Quantitative Analysis, BlackRock

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Finance Department 121 Presidents Drive Amherst, MA 01003 A145759

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Finance Newsletter 2016