By Takuya Sayuwatari, Reporter
Yash Agarwal McIntire School of Commerce University of Virginia, 2015
In our new international exchange student series, we follow special reporter Takuya Sayuwatari (Japan) will be interviewing American students and faculty members to analyze the differences between Japanese and American educational systems as he decides which American college is the best fit for him. Here, he interviews Yash Agarwal, student president of University of Virginia’s investment club.
Why did you decide to join the investment club?
I started out in the Alternative Investment Fund (AIF) in my first year at the University of Virginia as an analyst and watched my responsibilities evolve since then. I have always had a problem solving mindset and have viewed investing as a problem solving process at the very core. AIF was pitched to me as a wholesome experience where I would learn various strategies and be able to apply them to understand different types of investments. This excited me and convinced me to join it.
What are your tasks in the investment club?
I started out actively picking stocks based on heavy amounts of qualitative and quantitative research and finally pitching them to our General Body and the Investment Committee for the first couple years. Subsequently, my role changed to running one of the four individual portfolios (Relative Value) and mentoring the younger members part of that group to teach them various research and valuation skills while serving as a resource to help them with their pitches. In my final year now, I am serving as the CEO of AIF and run the recruitment process, talk to various investment professionals who are interested in being guest speakers, represent the club at investing competitions and run all general body and investment committee meetings.
What kinds of educational skills you have learned in class do you use in your work with the investment club?
In class, we have learned multiple valuation methodologies and worked in groups on many research projects with a number of companies. In AIF we have used the learnings from those experiences to obtain an edge when we perform our own research to gain a differentiated point of view while analyzing ideas. For example, I worked in a team last year as part of a class assignment with Rolls-Royce to determine a potential engine manufacturing bid for a leading business jet manufacturer. That experience sharpened my research skills to help me when I pitch ides for AIF. Over time with such experiences, I learned how to gather and use information that was known by only a few people instead of simply using easy-to-obtain information that is used by everyone.
What are important things to work as a member of the investment club?
Something I have noticed over the past four years in AIF is that students who truly care for their ideas and research every aspect of the pitch by spending a very large amount of time conducting their research are not only able to generate strong results but also end up learning the most from the experience. Such experiences have strong long term impact for recruiting purposes too and help members in interviews when they have a vast set of ideas that they can talk about with such comfort because they know everything about it. Besides, group dynamics play an important role too because within the individual portfolio groups inside AIF learning happens in a collaborative setting as a group and members learn from other members when people are willing to share new learnings. Thus, we aim to collaborate internally to be as competitive as possible externally. All of these are important behaviors to practice as an AIF member.
How does having an understanding of foreign markets affect investments domestically?
Today, the word is too connected and understanding capital flows between countries is important as they can cause strong volatility in the short term for domestic markets and also influence long term trends. Today, China holds a large amount of US Debt and part of this reason is that China has been a net exporter and generates a large amount of US Dollar holdings which must be put to use. If this situation were to change going forward, the US currency could witness strong volatility and the demand for US Treasuries could reduce materially and influence financial markets and even foreign policy to start a string of changes which can affect a large number of industries. This is only one example of how interconnectedness can impact the financial markets but understanding and being able to predict trends like these is important to making trades to generate strong returns. In AIF, our Global Macro Group does a good job with making such trades.
What are the biggest challenges with running the investment club?
I can think of three main challenges that we currently have while running AIF. First, keeping members committed to the long term success of the fund involves a strong time commitment and regular check to see if all duties are being performed to the correct standard. Second, we are currently in the process in raising more money for the fund and need to allocate more time to creating a pitch and meeting people to accomplish it. Lastly, reviewing current positions requires us to train members constantly to review thesis points and stay up to date with news on the investment. To summarize, the time commitment required is large and it is difficult to expect it from every member, but we try to do our best.
What have you learned from your successes in the investment club?
From my experience in AIF, I have learned a lot about different investing strategies and how the world of Finance really works. More importantly however, a large part of my learning is personal and through each individual experience, I have been able to see deeper into my own personality and understand where my strengths and weaknesses lie. Making successful investments involves a tremendous amount of work-ethic, discipline and emotional strength in addition to the hard-skills in terms of analytical and research abilities. I have come to understand that only time can teach me these and there is still a long way to go.
How do you think the investment club’s experience supports your future career?
Given the type of experience I have had in the club, I think it supports the career I would like to have. I will start my career as an Investment Banking Analyst at Moelis and Company in New York City. I have gained multiple research, behavioral and quantitative skills through AIF and these will help me if I am to rise up the ranks in Moelis or move to any Investment Management firm in the future. Lastly, the network to which I have access because of my role in AIF is also very helpful if I want to further my career in this field.