Background

Peter Pühringer, the founder of ZZ Vermögensverwaltung approached Vienna Finance Professors Engelbert Dockner and Josef Zechner to discuss a potential cooperation between their university and his asset management company. During one of the discussions Professor Zechner shared his experience with an innovative student managed fund at the University of British Columbia. This project, which served as role model for the PMP in Vienna, featured finance students managing real-money and thereby gaining valuable practical experience in the field of asset management to supplement their studies at the university.

Founded in 2003 by Peter Pühringer and Professors Dockner and Zechner, the Vienna PMP represented a new approach to “Ausbildung” which was unique for continental Europe. From the beginning the PMP has been designed as a two-year program, where students act as analysts in the first year and progress as portfolio managers the second year. The first students started in the 2003/04 school year and were divided into three cohorts. In May 2004 each of the groups was given an endowment of €333,333 with which to invest in financial markets. A second year cohort was recruited to support the managers and to ensure the sharing of knowledge and continuity of the program. While in the early years each new generation of managers started with identical cash amounts, this aspect of the program was changed after David Swensen,the Chief Investment Officer of the Yale Endowment Fund, visited and gave a talk about his perspective on US Endowment strategies. Since then the initial investment amount was raised to 1 million for each of the three groups. Moreover, the investment strategies of the three groups were redefined and set up such that they were to adopt the investment philosophies of the ZZ funds of the local money management firm, the Harvard and the Yale Endowment funds, respectively. To ensure the long term investment approach of Swensen, the PMP portfolios began to be rolled over from one manager cohort to the next in 2008 and thereafter.

The performance chart of the PMP portfolios over the first 11 years since inception shows the performance of the three student managed funds in comparison to a passive market portfolio (MSCI World). It is notable that the universe of investments and strategies is far greater in the student managed funds than is just represented in the world equity index.

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