ËÄÉ«AV

As a junior, Corey Flynn '23 got involved with an exciting new opportunity at the University: its new Student Investment Fund. He immediately had the chance to demonstrate his skills and enthusiasm for the initiative, as well as to connect with his classmates and, even, a potential donor. Since then, the fund has evolved, growing to include a group of dedicated student-managers, faculty, and the support of a generous alum.

Now known as the Gaia Initiative, the student-driven investment fund is an opportunity for students such as Flynn to gain hands-on investment experience while still in college. They are managing a fund known as an ESG (environmental, social, and governance) – a type of fund intended to have a meaningful impact on society. It's also at the leading edge of what's new and evolving in the field of finance, offering exciting opportunities for Flynn and his fellow student-investors.

"The knowledge and experience gained through having created an established investment fund is not something that can be taught in a classroom," said Flynn, a finance major and founding president of the University's Investment Club. "This is a real-world experience that I can proudly carry with me throughout my future. It is inspiring to be laying the foundations for a fund with very long-term goals."

ESG has become an important part of the investing world, says David Sacco, MBA. What exactly it means to be an ESG fund is something that is still evolving. Prof. Sacco says that since the environmental component is the only one with quantifiable and objective metrics (carbon can be measured, for example), quantifying social and governance impacts can be tricky.

This is something the fund's student-managers have been addressing head-on. Students have been focused on researching ESG as it relates to investing, and they've come up with their own investment strategies and guidelines, helping to develop a framework for the fund.

Prof. Sacco, who spent 25 years in the institutional fixed-income business, says the world of finance he entered was more established, and therefore, there wasn't as much space for exploration. But his students are pioneers in a new financial frontier, and he's excited about the opportunities they will have to be part of the process of figuring out how ESG will impact the field. While he's offering his guidance, he says they are taking the lead.

"ESG has become a big part of the investing world, and we want to prepare students for careers in that," said Prof. Sacco, who has a background in banking, investing, and trading. "This isn't me telling them what to do. This is me watching in awe of what they're doing and being amazed at what they're able to produce. This is about them."

Currently in its introductory and exploratory phase, the fund was kickstarted with the support of Frank Martire '77 MBA. Students put together a pitch deck that outlined their plans for the fund, just as they would in the real-world, and Martire generously agreed to lend his support.

Executive chair of , a leader in banking and commerce solutions, Martire says he was excited about the opportunity to support current students. As a first-generation college student, Martire believed supporting the fund combined his own background and his dedication to helping others. He hopes it will enable Chargers of today and tomorrow to learn about the impact of inflation and acquisitions, and the importance of teamwork.

"I hope they learn about making tough decisions," he said. "Simply knowing something isn't enough. You have to work with others. Being able to see these students advance, enjoy this, learn from their mistakes, and build relationships is wonderful. They'll have that for a lifetime, and that's why I did this. I think it's a great program, and I'm glad to be a part of it."

Students have support from each other and from faculty as they pursue this work. They're collaborating as part of a committee, voting on investment decisions before moving forward and developing investment parameters by researching existing funds and identifying the metrics they'll use. As with the University's Liberty Initiative, which enables students to engage in real-world research and consulting projects including ESG research, the Gaia Initiative will offer students opportunities to be compensated for their work – before they even graduate.

Just as real-world funds require accountability, students will explain their performance, as well as why they've made their decisions. Because it is run through the University's Finance Department, the fund isn't subject to some of the same regulatory and accounting processes as other funds. Still, Prof. Sacco says they're walking before they're running, taking their time to make sure they ensure the fund's success while preparing students to excel in money management.

Investing, explains Prof. Sacco, is by its nature emotional. Unlike theoretical discussions about investing or trading, there are financial consequences in the real-world. Prof. Sacco is grateful students will get to learn about this firsthand while still in school, especially in light of recent market volatility. He's impressed by how committed the students have been to the fund's success.

"They're blowing me away," he said. "These students really care about this. They're digging in in a way that shows they're really passionate about it and really well-versed in the modern toolkits available. These are students I would absolutely hire if I were back in the private sector because they show a tremendous amount of initiative."

For Jorge Lazala Dominguez '23, a finance major, being involved with the Gaia Initiative has helped him learn how to strategize and develop an ethical operational framework. It's experience that, he expects, will help prepare him for his career as a financial analyst.

"This fund represents a small taste of the real finance world," he said. "With an introduction to how big financial entities conduct business, students will be able to position themselves at the front of the new labor force with a developed knowledge of investment practices. This fund can be added to our resumes as work experience, which is always eye-catching when going out to the professional field."

That commitment to the fund with which they've been entrusted is important for these students. They understand their fiduciary responsibility to treat the money like it's theirs and to make sure it benefits students to come. The goal is, ultimately, to make the fund self-sustaining.

Students meet with their faculty advisers each week. Jared Sheffield '19, an adjunct professor who teaches in the University's Business Analytics and Finance Departments, says this collaboration presents an important opportunity for students. He believes it is a great way for them to grasp critical concepts such as research, risk assessment, and regulations that they will need to understand as professionals.

"Giving students the opportunity to take an idea into reality is an incredible experience, as a project of this nature is dynamic," said Prof. Sheffield, who earned degrees in computer science and finance from the University. "The ability to execute in a timely manner is a distinguishing characteristic that will help students stand out in whatever field they choose. When their successes and failures are tied to real money and can affect real people, in this case, generating opportunities in the form of scholarships for their peers, there is a new level of responsibility placed on their shoulders."

Faculty hope this project could change how donors support other student-driven initiatives. Instead of simply spending gifts, students could invest them, and they'd continue to use the investment proceeds to fund scholarships and other initiatives. Gifts from donors would be used similar to endowment funds, and the returns earned would go back to the students and cover the costs related to managing the funds.

This self-sustaining model would create even more opportunities that would benefit students such as Flynn, the finance major, and Chargers of the future. That's something Flynn, who hopes to work as an ESG analyst, is thinking about as he completes his degree this semester.

"The opportunity to speak with Mr. Martire and pitch an idea, and for that idea to be supported in the form of a donation, instills a belief in me and in the team that we are creating something special," he said. "It is our goal to ensure that this fund will continue on long into the future. I am excited to see for many years to come the results of my hard work and dedication to this fund."