BABSON COLLEGE FUND Information Session Professor Patrick Gregory, CFA Managing Director, Stephen D. Cutler Center for Investments and Finance Director, Babson College Fund Babson College

1 2 3 4 5 6 Babson College Fund Agenda What is the Babson College Fund (BCF)? 2 Who is the Program Director? 3 Who are the Executives in Residence? 4 Why Should I Participate? 5 What’s the recruiting process like? 6 Q&A Page  2

BABSON COLLEGE FUND What is bcf? Page  3

What is BCF? Students manage a portion of the College’s endowment BABSON COLLEGE FUND Students manage a portion of the College’s endowment Long/ short portfolio of equities 25 students (grad and undergrad) Meetings are TUESDAY nights 6:30 - 9:00pm 6:30-7:15 – Coaching session with Execs in Residence 7:15-7:45 – Portfolio review 7:45-9:00 – Stock pitches Investment Seminar 1-2 Friday seminars per semester Page  4

BABSON COLLEGE FUND Investment Process Investment Strategy The Babson College Fund employs a fundamental, bottoms-up strategy defined by rigorous analysis and careful risk management Our objective is to generate annual returns exceeding those of the S&P 500 over a market cycle with a lower level of risk We emphasize a deep understanding of our portfolio companies and sound valuation work With this approach, we should be able to preserve the endowment while generating impressive compound returns over time Page  5

BABSON COLLEGE FUND Investment Process Step 1 Step 2 Step 3 Step 4 Idea Generation: Use proprietary screens and broad network to identify potential investment opportuniities Portfolio Construction: Construct concentrated portfolios of 30-40 securities Sell Discipline: Utilize a well-defined sell discipline Step 1 Step 2 Step 3 Step 4 Step 5 Investment Analysis: Employ rigorous, value-based stock selection grounded in fundamental analysis Risk Controls: Limit downside risk through thorough and disciplined analysis, sector and position size limits, and trade management Page  6

What is BCF? Students are divided into three teams Sectors What is BCF? BABSON COLLEGE FUND Students are divided into three teams Lead Portfolio Managers (2) Sector Analyst/PM (22) Materials/Energy Industrials Financials/REITs Healthcare Consumer Discretionary Consumer Staples Technology/Telecom Quantitative/Risk Management Team (1)

What is BCF? Lead Portfolio Managers What do you do? BABSON COLLEGE FUND Lead Portfolio Managers Develop portfolio strategy, philosophy, and tactics Organize team meetings, programs, and events Review the weekly and YTD performance of the fund, outlining areas of emphasis for the sector teams Initiate mandatory reviews where appropriate (e.g., stock approaching price target or 52 week high, stocks lagging the benchmark, etc.) Prepare up to 2 research reports per member Prepare the semester report summarizing the fund for distribution to the Trustees

What is BCF? Sector Analysts/Portfolio Managers What do you do? BABSON COLLEGE FUND Sector Analysts/Portfolio Managers Manage the holdings in their economic sector, recommending the specific securities that should be included in the portfolio Determine the weight of portfolio holdings (explicit bets) and defend implicit bets we have vs. the benchmark Prepare 3 individual stock recommendations per semester, which includes a comprehensive report and presentation Maintain the stock ratings, target prices, and other data on holdings Reviewing the quarterly earnings call for each company Preparing a semester report for the sector

What is BCF? Quant Team What do you do? BABSON COLLEGE FUND Quant Team Source investment ideas by developing and backtesting equity screens in conjunction with the sector teams Leverage Bloomberg’s analytical tools to evaluate the portfolio positions and make recommendations designed to improve performance and/or reduce risk Pitch one stock per semester for inclusion in the portfolio Prepare and analyze weekly, monthly, and annual performance reports Ensure all trades are reflected in the Bloomberg each week Assist the Portfolio Managers in preparing the semester report

BABSON COLLEGE FUND PROGRAM DIRECTOR Page  11

Program Director Patrick Gregory, CFA (pgregory@babson.edu) My background Program Director BABSON COLLEGE FUND Patrick Gregory, CFA (pgregory@babson.edu) Managing Director of the Stephen D. Cutler Center for Investments and Finance, Director of the Babson College Fund, and professor in the Finance Division Member of the Investment Committee of the Board of Trustees, which manages the College’s endowment Former institutional portfolio manager with experience managing the Healthcare and Technology, Media, and Telecom (TMT) sectors of a $6 billion equity fund Co-author of Why Stocks Go Up and Down

BABSON COLLEGE FUND Execs in residence Page  13

Execs in Residence BABSON COLLEGE FUND Warren Johnson, CFA Jim Spencer, CFA Pratima Abichandani John Hickling, CFA Holland Ward Polly Sung, CFA Paul Washburn, CFA Hugh Crowther, CFA Mike Dunn, CFA Brittany Bascom Average of 29 years experience as analysts and portfolio managers Page  14

BABSON COLLEGE FUND Why participate? Page  15

Why Should I Participate? Why you should do this Why Should I Participate? BABSON COLLEGE FUND You will learn A LOT about security analysis and fund management You will work hard, but develop REAL WORLD EXPERIENCE You are managing REAL MONEY You are being MENTORED by talented professionals You earn class credits for two semesters ENHANCED JOB PROSPECTS

Visits/ Guest Speakers Why Should I Participate? BABSON COLLEGE FUND Networking Opportunities Guest speakers over the last 2 years have included… Hedge Fund managers (3) Fed official, former BCF student Investment Strategist from BNY Mellon Mutual Fund Manager (2) Communications Coach Other professional events Boston Investment Conference CFA Equity Research Challenge Rotman International Trading Competition

Why Should I Participate? Why you should do this Why Should I Participate? BABSON COLLEGE FUND Enhanced Job Prospects Recent program participants are working at… Goldman Sachs Rothschild & Co. Credit Suisse Lazard John Hancock BB&T Capital Markets Bank of America Merrill Lynch

BABSON COLLEGE FUND Recruiting process Page  19

Recruiting Process Applications Recruiting Process BABSON COLLEGE FUND Applications Applications are on the BCF Website http://cutler.babson.edu/babsoncollegefund/BCFApply.aspx Send completed applications to Adele Panichella (panichella@babson.edu) by Thursday, November 9 at midnight Interviews on Monday, November 13

Do You Have Any Questions? Page  21