About the Fund
AIC’s Investment Fund was formed in 2017 and has quickly amassed $15,000+ in assets under management. We seek to consistently generate outsized risk-adjusted returns while providing all members with a hands-on investing experience. As the only alternatives-focused fund at the University of Michigan, our members gain experience analyzing a variety of alternative asset classes in addition to stocks and bonds. Participation is open to all active members, who vote on each investment pitch and help reallocate the fund’s resources at the end of every semester.
Investment Process
Members are assigned to one of nine investment desks, each led by an investment desk head who helps members develop their investment analysis and financial modeling skills. Working in teams of 5-6 people, members meet weekly to discuss recent financial news, source new investment ideas, construct financial models, and more. Common forms of analysis that members will use include but are not limited to: discounted cash flow analysis, public comparable companies, precedent transactions, leveraged buyout models, the Black-Scholes-Merton model, and recombining binomial trees. Each desk will present an investment idea to the club, which will then be voted on by all members to determine if it will be added to the portfolio. Because our Investment Fund covers a wide array of asset classes, we utilize a variety of investment strategies based on the unique catalysts and considerations for each desk. Below are the three main investment strategies we employ:
FUNDAMENTAL
AIC employs a bottom-up approach to seek out companies that are trading below their intrinsic value. We conduct rigorous due diligence and financial modeling to ascertain the fair value of an asset before deploying capital, maintaining an optimal combination of value and growth investments to diversity our portfolio and outperform our underlying benchmarks. Most of our investment initiatives target time horizons of 12-24 months.
GLOBAL MACRO
Many of AIC's investments are based on our views of large macroeconomic and geopolitical events on the national, regional, and global scale. We analyze interest rates, currency exchange rates, levels of international trade, political events, and more to generate alpha by exploiting systematic risks embedded in the capital markets.
EVENT-DRIVEN
By analyzing major corporate events such as restructurings, mergers, and acquisitions, AIC can capitalize on temporary mispricings that often occur when companies undergo change. These investments are short-term and help us generate attractive returns uncorrelated to prevailing market conditions.
Investment Desks
The Commodities desk invests in both metals and soft commodities products, which includes grains, cotton, sugar, and much more.
The Energy desk invests in companies within the oil & gas, alternative energy, and power & utilities industries.
The U.S. Equities desk invests in U.S.-based companies of all sizes across all sectors, with a preference toward small- and mid-cap companies.
With the ability to invest across all asset classes, the Derivatives desk utilizes derivative securities, such as options and futures, to capitalize on market volatility and hedge our current holdings.
The Fixed Income desk follows global interest rates and macroeconomic trends to identify investment opportunities in the debt of sovereign states and multinational corporations.
The Real Estate desk invests in both commercial real estate and mortgages through publicly-traded real estate investment trusts (REITs).
The Distressed desk invests in the debt and equity of companies that are near or currently going through bankruptcy, conducting extensive research to determine if these companies can recover in the future.
The Foreign Exchange desk invests in global currency pairs by capitalizing on growing interest rates, trade relations, central banking regulations, and other macroeconomic trends.