The Wright Stuff
The Transformative Business of Managing the Wright Fund
On the third floor of McNair Hall, a glass wall separates the El Paso Corporation Finance Center from the eyes of a prospective MBA student. The room is alive with activity — a stock ticker, 10 computers, seven displays and two LED boards with commodities, currency exchanges and treasury markets on one and equity market indices, Jones School recruiters and Wright Fund holdings on the other.
A full time MBA student explains how the center is used, “Finance courses are based on theory, this room is about learning practical applications for that theory. You get training with the finance tools you might use in a job, like Bloomberg, FactSet and Capital IQ. It’s also home to the Wright Fund. ”
(L-R) Nolan Waugh, Jeff Montgomery, Edward Rowe, and Evan Bertrand (all class of 2011)
Natalie Higdem '11 in the El Paso Finance Center
Since 1995, the M.A. Wright Fund has served as an educational investment program for students at the Jones School. Founded with a gift from the former chairman of Humble Oil (now ExxonMobil) Myron “Mike” A. Wright’s estate to Rice’s endowment, the fund included a mandate that a portion of the endowment be managed exclusively by Rice MBA students in order to gain valuable money management experience.
The fund’s impact on students comes from coursework that develops an understanding of top-down asset management. The core of the Wright Fund experience is two semester-long courses that teach a broad view of investment management: students begin by performing analysis on individual securities, and by their second semester are analyzing factors that affect sectors or even the entire market.
This process teaches students the context of the market as a whole, making their analysis more robust and complete. The fund also allows students to foster their peers’ education: senior Wright Fund students supervise the analyses of junior students, and annually the fund awards scholarships generated from its own returns to the two top students.
These elements provide students more incentive to be good stewards of the endowment.
Three different students, three different degrees
The Wright Fund is run by Dr. Jill Foote, director of the El Paso Corporation Finance Center, along with assistance from students elected each semester as Chief Investment Officer, Chief Economist and Chief Operations Officer. This structure allows the students to be an integral part of the rigorous application process, which requires stock analysis and an interview.
The 2011 officers, all of whom graduated in the spring, have one unique characteristic: none of them were finance majors or held jobs in finance.
“The Wright Fund positions itself to be open to all three programs, whether there’s a finance background or not. We’re clearly a testament to that,” CIO Nolan Waugh ’11 says.
Waugh is a Rice undergrad (’04) in computer science. He worked as a web developer for a legal publishing firm in Houston for three years before taking a job at the Jones School in the El Paso Finance Center. “During college I helped set up the first version of the trading floor in the finance center. Coming back, the plan was to manage the finance center and also pursue an MBA.” Waugh graduated from the professionals program.
COO Natalie Higdem ’11 earned a hotel restaurant management degree from University of Houston in 2005. She worked for Aramark managing suite operations for events at Reliant Stadium and for a nonprofit putting on special events, raising funds and doing board relations. “My growing interest in finance and energy led me to the Rice MBA program.”
Chief Economist Evan Bertrand ’11 graduated from Rice with a music degree in 2005. He spent three years as a percussionist at the Jacksonville Symphony Orchestra. “I felt like there was more opportunity for growth and variety outside of the music world. I was interested in finance and knew that the only way to make that drastic of a transition was to get an MBA.”
The blend of student backgrounds enhanced the experience. “We all had something to offer,” Evan says. “The students with finance backgrounds obviously had technical knowledge, but the students with non-traditional backgrounds were able to approach equities in a fresh way.”
This fresh perspective is exactly the kind of innovation the fund looks for in its members. For Natalie, “The Wright Fund allowed me to do a deep dive into financial statements in a way I had not necessarily done in my classes. It also gave me the opportunity to meet alumni in many different industries and better understand what I wanted to do after school.”
As an associate in the Business Valuation group at Deloitte Financial Advisory Services, she says, “Participating in the Wright Fund helped not just my interview process but also my onboarding as a new hire. Much of what I am working on now is quite similar to the analysis and reports I worked on as an analyst in the Wright Fund.”
The Wright Fund contributed to Evan’s career as well. At ExxonMobil he provides financial analysis as part of the Controller’s division and is currently supporting the company’s IT business. “The Wright Fund, more so than any other activity in the Rice MBA program, requires you to formulate an opinion and defend it to a scrutinizing audience. Now I have to do that every day.”
Bridging the gap
With a four-hour class every Tuesday night the Wright Fund was a challenge for a fully-employed student. Nolan found that, despite the grueling schedule, he flourished. “Even in the first few weeks I was better at my job and had a better understanding of the resources in the finance center.”
Which is really the point. “Business school students are here for two years,” Jill points out. “They’re expected to immediately transition into a higher-level job than they had before. A big challenge is to provide a pathway between classroom learning and applying theory, principles and models to live situations. Both the Finance Center and Wright Fund aim to bridge that gap and in the process make the students more knowledgeable and more marketable.”
The Wright Fund currently manages $900,000. Its charter expressly forbids the kind of risk-taking that characterized the recent global financial crisis and encourages ethical, disciplined and holistic asset management.
This approach has generated dual returns: monetary and educational. The fund’s annualized return over the past 10 years has firmly outperformed its benchmark (the S&P 500). Second, the fund has produced successful professionals in a wide variety of disciplines, whose training in the Wright Fund continues to pay dividends in the form of substantial, mutually beneficial relationships with top finance firms, and increased prominence for Rice University on the world business stage.
Jill Foote is an industry expert who came to train the next generation of asset managers. As director of the El Paso Corporation Finance Center, she also directs the M.A. Wright Fund and is faculty advisor to the Rice Finance Club. She came to the Jones School in 2005 and has 13 years of experience from Goldman Sachs in New York, where, among other positions, she was vice president, managing a large group involved in strategic initiatives, new business ventures, risk management, and operational, regulatory, and financial audits and risk reviews. She is a Chartered Financial Analyst, has a BA in Economics and Managerial Studies from Rice (Magna Cum Laude and Phi Beta Kappa), an MA in Economics from New York University and a PhD in Economics from Fordham University.