By the time a college student reaches the 400 level of financial education, basic economic formulas have generally been digested and it’s time to start dealing with real-world situations.
A team of six real estate students in the University of South Alabama’s Mitchell College of Business did just that recently, after taking Finance 446 at the university, taught by Reid Cummings, director of USA’s Center for Real Estate and Economic Development.
USA’s team of six ended up besting teams from 47 other universities to win the grand prize in the 2018 University Portfolio Challenge. Better yet, their $40,000 prize money for doing the best job at investing a theoretical $1 billion in commercial real estate ventures was matched by Mobile philanthropist Abe Mitchell through the Mitchell-Moulton Scholarship Initiative for a total of $80,000 in scholarships for students pursuing the real estate concentration in the business school.
After studying market trends, the students finally agreed to invest in the industrial sector, allocating $750 million to private equity and $250 million to public equity. The investments had to be made all at one time and couldn’t be touched until the year was up. Their overall return was 16.12 percent, which would have equaled $161.2 million on $1 billion invested. The last-place team lost $202.25 million for the year.
South’s team consisted of team captain Jacob Corbett, Daniel Mann, Dallas Russell, Andrew Roux, Taylor Shepherd and Auston Fillinger.
“I’m extremely pleased and proud of these students,” Mitchell says. “The Mitchell College team consistently outperformed other teams from outstanding universities. I’m even more pleased that the funds will be invested in scholarships that will help students for years to come. With the Mitchell-Moulton Scholarship Initiative match, the number and amount of scholarships is doubled, benefitting even more students.”
The competition is sponsored by Altus, a Canadian real estate company.