Ad-venture capitalists

RIT students earn ‘business class’ lessons in Chicago’s financial district

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Mike Schwartz

Chicago Mercantile Exchange Group executive chairman Terry Duffy, left, joined RIT accounting professor Daniel Tessoni for a business discussion with students in the boardroom.

Oct. 14—The Dow Jones Industrial Average, one of the most watched barometers of the financial world, closes above 10,000 points for the first time in more than a year. 

The “rally” continues as 10 students from RIT’s Financial Management Association spend the next two days in the heart of Chicago’s financial district visiting the corporate executive suites of the Chicago Mercantile Exchange Group, Boeing Corp., Crown Imports LLC and Walton Street Capital LLC.

“This was an amazing opportunity for our students to see the inner workings and cultures of four very different types of business entities: a major options and futures trading exchange, a major manufacturing corporation, a distribution and marketing company structured as a joint venture, and a private equity firm specializing in real estate,” explains Patricia Wollan, Financial Management Association faculty advisor and assistant professor of 
finance in the E. Philip Saunders College of Business.

The students are well aware of the volatility of the market—especially since they manage a “real money” investment portfolio with a current market value of $100,000. 

“There’s still a lot of uncertainty in today’s economy—staff cuts, production setbacks, lack of investors—and that’s something all of these companies face,” says Andrew Van Aken, president of the 44-member university club—comprised of students who major in diverse disciplines ranging from finance to biology to applied math.

“For a company like Boeing, a lot of people can’t afford to purchase a $400 million plane during a recession; Crown Imports, as a higher class beer company (Corona Extra) is faced with consumers cutting back on consumption or purchasing less-expensive brands.”

Seeing the big “open outcry markets” in action at CME Group, located in the former Chicago Board of Trade building, was a real eye-opener. 

“I was in awe at the opportunity to be on the trading floor because it’s a one-of-a-kind environment that you see only on the news, not firsthand,” says Mark Overacker, an RIT finance and economics senior who is pursuing a career as a floor trader. “I was ready to set up a tent and move in.”

A tent would be a mere blip on the radar screen because the world’s largest trading floor could easily fit a Boeing 747 airplane nose-to-tail in its 116,000 square feet of space. But that’s not all that was impressive. 

“CME executive chairman Terry Duffy had just returned from a trip to Asia, wasn’t feeling well, but still came in to see us,” Overacker says. “I find that amazing for someone who is at the helm—taking time to address us individually and offering career advice.”

The executives at Crown Imports also extended the welcome mat—taking time to make personal connections with each of the students in addition to providing details of their business operations and creative advertising campaigns. 

RIT facilitators of the trip included accounting professor Daniel Tessoni from the Saunders College and Jare Allocco Allen, assistant controller in the division of finance and administration.

“The Chicago trip is a reminder of how challenging the business environment remains,” Tessoni says. “Last year we visited New York firms and learned of difficulties caused by lack of liquidity in the market; this year the challenges centered more on dealing with the uncertainty in the regulatory arena regarding rules that will ultimately govern our financial markets.”

Or as Overacker observes, “In 2008, firms were looking to get out of their positions to sell for the best price they could get; in 2009, they are looking for the right time to put their money back into play—to take advantage of all the deals.”

This phenomenon was very much in evidence at Walton Street Capital. 

“The real estate market has taken such a severe beating and their executives noted that this crisis has left many promising real estate investment opportunities in its wake,” Wollan explains. 

Summing up the Chicago experience, international student Vanya Kovacheva ’09 (MBA) from Bulgaria says, “Uniformly everyone in the industry has suffered during the past year, but those with solid investment strategies, fresh ideas and a loyal customer base seemed better equipped to weather the tough times.”