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Henry Fund Investment Grows to $371,000 over 10 Years

In 10 years, The Henry Fund has provided dozens of University of Iowa MBA students with hands-on experience managing a real money fund. The fund has performed well: from its inception in the spring of 1994, the portfolio has grown from its initial investment of $50,000 to a value of more than $371,000.

Named for its two founding benefactors, Henry Royer and Henry B. Tippie, the Henry Fund is an endowed equity portfolio that invests in companies that are industry leaders with above-average investment opportunities. Managing the fund provides MBA students enrolled in the Applied Securities Management course with hands-on experience investigating and recommending stocks.

Henry Fund students and alumni recently celebrated the fund's 10th anniversary. Over 100 Henry Fund alumni have gone on to successful careers in the financial field, employed in top companies around the world.

Doug Fehr, a vice president and portfolio manager at Great Western Bank, said his Henry Fund experience was instrumental in helping him get interviews for jobs after graduation. "My investment picking style was grounded in what I learned as Henry Fund analyst," he added.

The experience is invaluable for students interested in working as financial analysts. Geoff Berg, a current MBA student and Henry Fund manager, said he uses concepts learned in class to manage the portfolio. "It's a natural extension of what we learn in class. We're testing theories and seeing how they work in the real world."

To enroll in the two-semester course, at the end of the fall semester, interested students must submit an original research report on an assigned company. The reports are reviewed by a committee, which selects the class the class of 12 or 10 students.

Each of the 12 analysts works within one of 10 economic sectors and is responsible for developing an investment review, researching new companies to purchase and evaluating the ideas of other managers. In addition, fund managers perform the administrative tasks of portfolio management, such as marketing the fund to outside donors and producing an annual report. An independent advisory board of financial professionals oversees the Henry Fund. At the end of each semester, fund managers present their research and investment recommendations to this board for approval.

"Students interested in the field get an idea of what the work will involve," said Todd Hogue, assistant professor of finance at the Tippie College, who served as the Henry Fund advisor for 10 years. "They also benefit from the work of their classmates. They are all involved in reviewing their classmates' work and recommendations and, by doing so, they learn from each other."

Brian Kelley, a lecturer in the Tippie College Department of Finance and current Henry Fund advisor, said the fund is currently returning 5.75 percent compared to its benchmark, the S&P 500, at about .89 percent. At times, the Henry Fund has outperformed the S&P 500 by as much as 17.84 percent, he added.

Trailing returns over 10 years are 16.26 percent, compared to 13.17 percent for the S&P 500. The portfolio has 32 active companies, with its largest holdings being United Healthcare, Target, Citigroup and Guidant. Its best performers year-to-date are Autodesk (up 92.9 percent) and Offshore Logistics (up 44.2 percent)

"This is one of the best things Henry (Royer) and I did to help students," says Henry Tippie, a UI benefactor who has created several multi-million-dollar companies over his 50-year career. "There is no substitute for using real money; students have achieved things they wouldn't have been able to achieve without it."


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