Community Spirit: Douglass Eberhardt

From left: Victoria Gill, CEO and technology sector analyst; Chris Milani, economist and industrial sector analyst; and Martin Pham, COO and REITs sector analyst, participated in the spring 2017 Student Investment Fund program. Photo: Jaslyn Gilbert

At University of the Pacific, Bank of Stockton CEO Douglass Eberhardt’s Student Investment Fund program uses a real investment fund as a teaching tool.

By Katie Kuehner-Hebert

Doing is often the most effective—and interesting—way to learn.

Douglass Eberhardt, chairman and CEO of Bank of Stockton, would agree. The bank and the Eberhardt family’s permanent endowment to University of the Pacific funds an educational program that teaches students how to invest and give back using a real-life investment fund.

The Student Investment Fund (SIF), established in 2007 with a $1 million gift from Bank of Stockton and the Eberhardt family, is a rare opportunity for students to gain real-world experience in the U.S. stock market. Out of 9,000 business schools worldwide, only 200 operate this type of fund.

Quick stat

$1 million

Total funds the Student Investment Fund has given back to University of the Pacific since 2007

Inspiration for the SIF program came from Eberhardt’s own experience working at a New York City bank in the early 1960s. His supervisors took him to the various Wall Street brokerage houses and investment fund management companies to get in-depth, hands-on experience of the world of investing.

Just over a decade ago, Eberhardt, who was then president of Bank of Stockton, decided to take this concept one step further by designing the program at University of the Pacific.

“When I was young, I only wish someone had let me have the chance to invest money and had a class in it,” Eberhardt says. “There are classes that may teach you about all kinds of investments, but they don’t teach you about how to invest.”

As a part of the SIF class, a select group of undergraduate and MBA students manage the investment portfolio, which has tripled in value since it was created. They research, evaluate, write reports and make choices about where and how to invest the $3 million fund’s money. They use Bloomberg terminals to conduct equity and market research, and to track the performance of the portfolio.

Rohan Dixit, a 2012 graduate, “absolutely” credits his ability to get hired to the skills he gained in the SIF program. “I can say with 100 percent certainty that the skills will also help me in any future project or career I may pursue,” Dixit says.

Every year, the Student Investment Fund holds a ceremony to announce results and distribute philanthropic funds to various groups, including Eberhardt School of Business (ESB). From left: Angad Randhawa, SIF chief investment officer and financial sector analyst; Douglass Eberhardt; Tim Carroll, dean of ESB; and Jesper Kasanen, SIF chief technology officer and technology sector analyst.

Field trip

Each year, a group of 12 SIF students travels to New York City to participate in the Quinnipiac Global Asset Management Education (G.A.M.E.) Forum with other college students, faculty and finance professionals from around the world. The trip is a chance to interact with industry leaders and learn best practices in investment management in the heart of the U.S. financial sector.

During the trip, SIF participants also visit Nasdaq, the Museum of American Finance, Bloomberg headquarters, the New York Stock Exchange and other iconic New York City sites. In 2017, the students celebrated SIF’s 10-year anniversary at the Cornell Club–New York alumni house with Pacific alumni.

“The Student Investment Fund trip to New York was one of the most memorable moments in my college career,” says David Perrizo, a 2017 graduate. “It was amazing to see all of the alumni support that we received at the alumni event and how willing they are to help Pacific students like me succeed in their professional careers post-graduation.”

Eberhardt says it’s gratifying to see students get a leg up in their careers by participating in the university’s SIF program. But for him, it’s not just about making a financial contribution. The fund’s managers also help shape the program’s future by attending SIF planning sessions.

“We don’t just sit back and forget about it,” Eberhardt says.

Part of this effort is making sure the SIF program sees a steady stream of participants.

To help market the program to Pacific students, the fund’s managers helped create the Pacific Investment Management Association, a club open to all students. The club exposes them to the analysis and research required for stock selection through an online portfolio simulation game that doesn’t involve real money. If they get a taste for it, they can apply to be part of the program.

High performance

From a performance perspective, 2017 was a landmark year for the Student Investment Fund. According to the annual report, the fund returned 26.3 percent on the year versus 14.6 percent for its blended benchmark. This was not only an 11.7 percent outperformance, but the fund also significantly outpaced its cumulative compounded return of 10.9 percent.

“The Student Investment Fund trip to New York was one of the most memorable moments in my college career.”
—David Perrizo, 2017 University of the Pacific graduate

Leaders say this is a real success story for program participants—as well as for University of the Pacific. At the end of every year, the SIF gives back 4 percent of its market value in distributions to the university to teach a philanthropy component. In 2017, it distributed a total of $121,831 to the speech-language pathology program, the men’s water polo team and the Eberhardt School of Business.

The fund also distributed more than $58,000 to the university’s general endowment. To date, the Eberhardt SIF has returned nearly $1 million to University of the Pacific.
As Eberhardt says, “The endowment is now giving [the university’s administration] even more money to invest and also more to run the university.”

Katie Kuehner-Hebert is a writer in California.