London Business School | Groups

Idea Generation & Security Selection

  • Stock Pitch Competitions (SPC): the primary sources of new portfolio ideas are the three stock pitch competitions hosted by the IMC throughout the year. Winners become members of the Investment Committee and their winning stocks are implemented in the portfolio.
  • Ad-hoc Stock Pitches: the Investment Committee will also consider ideas pitched by students through other venues, for example, the Trading Forum and classes such as Value Investing.

Portfolio Construction & Risk Management

  • Position Sizing: fundamentally we believe that a conviction-based approach rather than an equal-weighted approach to portfolio construction better suits the purposes of the Fund. As such, position sizes are to be determined and rebalanced by the Investment Committee on their respective relative risk-adjusted upside potential.
  • Review triggers: the Investment Committee is responsible for reviewing the investment thesis of each portfolio stock on a periodic basis and in cases when the stock price has experienced a significant move.
  • Diversification: while there are no explicit limits with regard to sector or country exposure, the Fund can be expected to be reasonably diversified on those factors.?

Portfolio Managers

The portfolio is managed by students from select members of all programmes with one PHD student. While SIF portfolio managers hold their positions for one year, the PHD student ensures continuity across SIF leadership by holding the position for three to four years.

Portfolio managers hold four core responsibilities:

  • Portfolio monitoring – Portfolio managers are responsible for monitoring the SIF portfolio, and they may initiate the sale of stock, see “Selling Procedure” on page 6;

  • Reporting performance – Portfolio managers are responsible for reporting fund performance at the start of each stock pitch event. Performance is calculated as a weekly rolling weighted average of the stocks held in the portfolio. The aggregate return is graphed with the weight and performance of each constituent stock. Performance is calculated against the returns of the Morgan Stanley Capital International (MSCI) Global Index. 

  • Stock acquisition - Following the stock pitch event, portfolio managers are responsible for adding the selected stock to the SIF as soon as possible. An order is placed with the online brokerage TD Waterhouse, formerly Comdirect. The amount of stock added depends upon the quantity of cash available in the fund, but generally the amount of stock purchased is equivalent to the value of the average holding in the SIF at the time of the pitch.

  • Event management – Managers must coordinate and manage the annual stock pitch competitions. Tasks include liaising with sponsors to coordinate schedules, and arranging facilities and catering with London Business School for the stock pitch evening.