Calvin gives student organization $1 million to invest
It’s the age-old question: what would you do with a million dollars? Maybe you would travel the world or buy a jet pack. But if you were the Knights Investment Management club (KIM), you would invest it, because that million dollars comes from Calvin and Calvin is your client.
The Calvin Endowment Fund gave KIM $1 million of Calvin’s money to invest as they see fit. Calvin acts as the club’s client and provides students with real investing experience.
Senior Miles Kuperus holds the title of Chief Operating Officer of KIM and shares the success of the club.
“I can’t really tell you the number but we’ve done well,” Kuperus said. “We’ve been successful since day one.”
KIM takes the money from the Calvin Endowment Fund and invests it in bonds, international funds and both large and small cap stocks. But students don’t have free reign; every decision is well-informed and every investment is well-researched.
New club members are put through in-depth training sessions and are provided with a 15-page manual. They are split up into different sectors and become experts in a particular industry such as energy or health care. Investment decisions are made after groups do extensive research and make sales pitches to the entire club who proceeds to vote on whether a company sounds worth investing in.
Investment decisions are not just made by one person. Club members need to approve of each investment and the club’s advisor, business professor Leonard Van Drunen, has the final say. The group cannot make a trade or buy anything without Van Drunen’s approval.
Kuperus stressed the purpose of the club is to educate students while also taking precautions to ensure sound investments are made.
“We really want to focus on the education aspect and also the risk allocation aspect,” Kuperus said. “So another side is that when we have a stock pitch it goes through a pre-screening process.”
The club makes thoroughly researched and well-informed decisions on what to do with their client’s money.
The club is mostly made up of business and engineering students who are trained and given the opportunity to experience the world of stocks and bonds up close.
“Really our goal is to expand education of business students so the club exists to educate people,” Kuperus said.
The money is in a separate custody account stored at a different bank. Students do not have direct access to these funds and cannot take money out as they please.
“It’s also really important for us to emphasize that this is not a million dollars that students are investing,” Kuperus said. “This is a market diversified program. So we have a lot of risk controls that we have in the fund … what we really want to emphasize is that it’s an education system that we’ve developed that really presents a great opportunity for a resume builder and for the students’ knowledge.”
Calvin’s recent financial crisis did not affect the club. Calvin continued to allow KIM to invest the funds.
“The way that our club is set up is that we try to run it like a real firm,” Kuperus said. “We treat Calvin College as our client … because they are our client. We were never really concerned [about Calvin’s financial crisis] because we are totally separated from that whole situation. The only reason we would lose money is if we didn’t do our job. We are completely confident we are doing our job correctly as defined by Calvin College.”
KIM meets once a week, with meetings consisting of research sessions or stock pitches. Kuperus said the club is passionate about educating students and doing what is best for their client is “one of our top priorities as a club.”
“Since Calvin College is being so gracious in giving us this money to manage,” Kuperus said, “it’s our duty to create a good return for Calvin College so we want to do that in the safest way possible.”