The robust focus on private equity at UNC Kenan-Flagler extends from educational and career preparation for students – including the only student-run private equity fund at a top-tier business school – to the faculty’s research.
Another key differentiator is the annual UNC Alternative Investments Conference (AIC), a premier event organized by the Private Equity Club, an MBA career club. Students and business professionals explore innovative ideas in the fields of private equity, hedge funds and venture capital. The sixth annual conference drew more than 250 attendees to explore “Seeking Returns in a Dynamic Market” in February.
Keynote speakers were Jonathan Gray, global head of real estate for Blackstone Group Management LLC, and Dwight Anderson (MBA '94), principal and portfolio manager for Ospraie Management LLC. Panel discussions covered private equity, hedge funds, real estate, debt investment strategies and venture capital.
Anderson discussed his work with Ospraie Management, which invests in commodity markets and basic industries around the world. He previously did similar work for Goldman Sachs, JP Morgan and Tiger Management LLC. “When I came out of school in the 1980s, America was in decline,” Anderson says. “I went into manufacturing consulting with the idea that I could raise the standard of living somewhere and I bounced all around America.”
Factors that have made his company successful in the commodities market: building trust with overseas partners, developing a vast information store about the industries they invest in to create a competitive advantage, and carefully considering a country’s political and social landscapes when choosing to invest.
“The 1989 fall of the Berlin Wall cause massive commodity inflation, and then we were hit again in 1994 with the Chinese devaluation of their currency by 50 to 75 percent,” Anderson says about the complexities he has faced in the investment marketplace.
Looking to the future, Anderson says China will remain a key player in the investment market, although he expects slower growth and fewer workers entering the Chinese work force in the next several years. “China potentially has the geology to become our next biggest competitor in commodities,” he says.
The venture capital panel featured Peter Barth, founder of Iron Yard Accelerator; Mike Elliott (BS ’80, MBA '82),partner, Noro-Moseley Partners; David Jones (MBA '05), partner, Southern Capitol Ventures; Mitch Mumma, general partner, Intersouth Partners; R. Wilson Orr III, managing director, SSM Partners; and Chris Stoecker, deal team leader, Silicon Valley Bank.
The panelists launched the discussion with a focus on angel investing, a trending form of funding that startup companies have begun to pursue as easy capital. “Angel investing is not the best place to start your fundraising,” says Barth. “It’s not pushing out venture capital but it can complement and value-add to the space.” Looking at the current investment landscape, the panelists then highlighted several areas that both appeal to and deter investors.
“Healthcare IT remains very interesting and there are a lot of new developments in that space,” says Jones. “Ecommerce continues to be interesting, and both big data and real time data are the next big things for venture capital.” On the opposite end of the spectrum, Orr says he would not invest in healthcare providers due to their uncertain position in the economy for the past few years. Concluding the discussion, the panelists agreed that the venture capital model of funding is not broken, but rather simply changing.
“With venture capital we have to get smaller, get focused and differentiate,” says Elliott. “Raising funds of any type has been brutal the last couple of years.” Jones adds, “We welcome more competition and need more venture funds locally. There is less capital coming in and the financing risk is greater, but returns for the winners will go back up.”
Inspired by the uncertainty in the marketplace evident since the financial crisis, the conference’s theme of “Seeking Returns in a Dynamic Market” was extremely successful, says Geordy Johnson (MBA '13), vice president of the Alternative Investments Conference.
“This gives students a chance to learn first-hand from real world practitioners on how to best invest and develop their careers,” he says. “It showcased the strength of UNC Kenan-Flagler in the alternative investments space, and I hope that firms will consider UNC Kenan-Flagler as an employee recruiting source when they look to add personnel.”
Proceeds from the conference support the Alternative Investments Fellowship, which allows qualified students to gain internships with leading firms in working in alternative investments. For a complete list of speakers, visit http://uncaic.com/speakers/