Georgetown Collegiate Investors
Encyclopedia
Georgetown Collegiate Investors (GCI) is a limited liability company
headquartered in Washington, D.C.
. Founded in 1996, GCI is the nation's largest student-run, student-owned investment company. Composed entirely of Georgetown University
students, GCI invests in a variety of securities, ranging from equities to fixed income. GCI relies solely upon the knowledge and experience of its student members and leverages this talent to educate new members. In Spring 2011, GCI reached peak membership and assets with 240 members investing approximately $90,000.
with shareholders pooling their money together to invest in a portfolio of financial assets. Unlike a standard student club, however, GCI is legally incorporated in the District of Columbia as a Limited Liability Company
. The returns on GCI’s stock portfolio have historically been very profitable, frequently outperforming such market indices as the S&P 500 and the Dow Jones, as well as many “professionally managed” mutual funds.
undergraduate student who is interested in learning about the financial and investment industries is eligible to become a member.
GCI provides an opportunity for students to learn about the various principles of investing, including understanding the different statistics and information one must analyze before investing in a company. The fund also offers advice and basic training on portfolio management principles such as diversification. In order to get more involved in the club, members may write analysts reports on the funds’ holdings and on the industries the fund is invested in. GCI provides many leadership opportunities for the students in the club, with six board positions that are up for election each semester, in addition to VP positions to each board member.
While analysts may be interested in a specific sector, they are by no means limited to research only in one sector and, instead, are free to research and examine any topic they want. Once an analyst has compiled enough information about a given topic, he or she is able to present his or her findings to the club in a clear and concise presentation. This allows students to learn from each other and enhance their knowledge of finance
by actively participating in the fund.
, merger of Bank of America
and Merrill Lynch
, the failure of the U.S. automotive industry, the crisis of AIG
, and the collapse of commodity
prices. While the investment landscape was irreversibly changing throughout the year, Georgetown Collegiate Investors was well positioned to gain. A considerable injection of fresh capital from new members each year boosted its already sizable cash reserves, and trailing stops on its summer investments liquidate many positions over each summer, helping GCI avoid further losses heading into each school year. In 2009, GCI underwent several of administrative modifications. For example, the GCI board enrolled the entire portfolio in TD Ameritrade
’s Dividend Reinvestment Program. Instead of accepting dividends as cash income, they are now reinvested as partial shares and should provide exceptional appreciation.
GCI is a company invested primarily in equities. With the exceptionally large cash reserves, GCI strives to capture the greatest upside when the markets inevitably rebounded. As the markets dropped approximately 30%, GCI invested in several securities hoping to find value at the severely depressed prices. Despite uncertainty in the short run, the valuation and appeal of the U.S. economy remains strong in the long term. GCI encourages all members to actively follow new developments in the global financial markets as the summer progresses. Members pay particularly close attention to the housing market (housing starts, Case-Shiller Index), consumer sentiment, the unfreezing of credit (decreasing LIBOR), increased appetite for risk (increased Treasury yields, decreasing gold prices), improved corporate earnings, and other indicators. Also, GCI pays attention to the tug-of-war on commodity prices, as energy prices factor in fluctuating global demand, and continued government spending threatens to spur inflation. The fund's holdings could struggle for several reasons, if the markets surprise members' expectations. However, shareholders should be confident that GCI’s portfolio is well positioned to weather future struggles in the global financial markets. GCI has complete confidence that it will continue its history of success despite the current economic crisis.
Limited liability company
A limited liability company is a flexible form of enterprise that blends elements of partnership and corporate structures. It is a legal form of company that provides limited liability to its owners in the vast majority of United States jurisdictions...
headquartered in Washington, D.C.
Washington, D.C.
Washington, D.C., formally the District of Columbia and commonly referred to as Washington, "the District", or simply D.C., is the capital of the United States. On July 16, 1790, the United States Congress approved the creation of a permanent national capital as permitted by the U.S. Constitution....
. Founded in 1996, GCI is the nation's largest student-run, student-owned investment company. Composed entirely of Georgetown University
Georgetown University
Georgetown University is a private, Jesuit, research university whose main campus is in the Georgetown neighborhood of Washington, D.C. Founded in 1789, it is the oldest Catholic university in the United States...
students, GCI invests in a variety of securities, ranging from equities to fixed income. GCI relies solely upon the knowledge and experience of its student members and leverages this talent to educate new members. In Spring 2011, GCI reached peak membership and assets with 240 members investing approximately $90,000.
History
Georgetown Collegiate Investors, LLC was founded by a group of business-oriented students in 1996 and is the nation’s first and largest undergraduate student-run investment company. GCI operates similar to a hedge fundHedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
with shareholders pooling their money together to invest in a portfolio of financial assets. Unlike a standard student club, however, GCI is legally incorporated in the District of Columbia as a Limited Liability Company
Limited liability company
A limited liability company is a flexible form of enterprise that blends elements of partnership and corporate structures. It is a legal form of company that provides limited liability to its owners in the vast majority of United States jurisdictions...
. The returns on GCI’s stock portfolio have historically been very profitable, frequently outperforming such market indices as the S&P 500 and the Dow Jones, as well as many “professionally managed” mutual funds.
Membership
GCI currently has over 190 members, each owning a share of the fund, which makes it unique. The ownership aspect of each member allows students to gain real life experience in the financial world using their own money. The experience becomes much more meaningful and practical when real money is used and at stake. Investment opportunities are identified, researched, and voted on by all GCI owners (members), who maintain both ownership and voting rights proportionate to their share of the company’s total value at any given time. Thus, an owner who invests $400 in the company today would own roughly 0.67% of GCI; if GCI’s portfolio realizes a gain of 10%, the value of the individual’s share also increases by 10%, while their ownership/voting rights remain unchanged. The minimum initial investment is $250, and an individual can invest up to a limit of 20% of the company’s total capitalization.Services
GCI conducts weekly on-campus meetings to discuss current financial news, review the portfolio, and propose new investment opportunities. In addition, GCI invites local professionals for guest lectures, offers peer reviews for interview preparation, and establishes a network of alumni for long-term relationships. Any Georgetown UniversityGeorgetown University
Georgetown University is a private, Jesuit, research university whose main campus is in the Georgetown neighborhood of Washington, D.C. Founded in 1789, it is the oldest Catholic university in the United States...
undergraduate student who is interested in learning about the financial and investment industries is eligible to become a member.
GCI provides an opportunity for students to learn about the various principles of investing, including understanding the different statistics and information one must analyze before investing in a company. The fund also offers advice and basic training on portfolio management principles such as diversification. In order to get more involved in the club, members may write analysts reports on the funds’ holdings and on the industries the fund is invested in. GCI provides many leadership opportunities for the students in the club, with six board positions that are up for election each semester, in addition to VP positions to each board member.
Analyst Program
In 2008, GCI created its Analyst Program. The program is geared towards students looking to advance their knowledge of investing by researching a specific sector that they are interested in. The Analyst Program is divided into 6 major sectors:- Industrials
- Consumer Retail
- Financials
- TechnologyTechnologyTechnology is the making, usage, and knowledge of tools, machines, techniques, crafts, systems or methods of organization in order to solve a problem or perform a specific function. It can also refer to the collection of such tools, machinery, and procedures. The word technology comes ;...
- Energy MarketEnergy marketEnergy markets are those commodities markets that deal specifically with the trade and supply of energy. Energy market may refer to an electricity market, but can also refer to other sources of energy...
- Healthcare
- REIT (Real Estate Investment Trusts)
While analysts may be interested in a specific sector, they are by no means limited to research only in one sector and, instead, are free to research and examine any topic they want. Once an analyst has compiled enough information about a given topic, he or she is able to present his or her findings to the club in a clear and concise presentation. This allows students to learn from each other and enhance their knowledge of finance
Finance
"Finance" is often defined simply as the management of money or “funds” management Modern finance, however, is a family of business activity that includes the origination, marketing, and management of cash and money surrogates through a variety of capital accounts, instruments, and markets created...
by actively participating in the fund.
Strategy
Georgetown Collegiate Investors’ goal during the historically turbulent markets of the 2008 economic recession was to preserve capital amidst the collapse of the global financial markets. The fund witnessed the bankruptcy of Lehman BrothersLehman Brothers
Lehman Brothers Holdings Inc. was a global financial services firm. Before declaring bankruptcy in 2008, Lehman was the fourth largest investment bank in the USA , doing business in investment banking, equity and fixed-income sales and trading Lehman Brothers Holdings Inc. (former NYSE ticker...
, merger of Bank of America
Bank of America
Bank of America Corporation, an American multinational banking and financial services corporation, is the second largest bank holding company in the United States by assets, and the fourth largest bank in the U.S. by market capitalization. The bank is headquartered in Charlotte, North Carolina...
and Merrill Lynch
Merrill Lynch
Merrill Lynch is the wealth management division of Bank of America. With over 15,000 financial advisors and $2.2 trillion in client assets it is the world's largest brokerage. Formerly known as Merrill Lynch & Co., Inc., prior to 2009 the firm was publicly owned and traded on the New York...
, the failure of the U.S. automotive industry, the crisis of AIG
AIG
AIG is American International Group, a major American insurance corporation.AIG may also refer to:* And-inverter graph, a concept in computer theory* Answers in Genesis, a creationist organization in the U.S.* Arta Industrial Group in Iran...
, and the collapse of commodity
Commodity
In economics, a commodity is the generic term for any marketable item produced to satisfy wants or needs. Economic commodities comprise goods and services....
prices. While the investment landscape was irreversibly changing throughout the year, Georgetown Collegiate Investors was well positioned to gain. A considerable injection of fresh capital from new members each year boosted its already sizable cash reserves, and trailing stops on its summer investments liquidate many positions over each summer, helping GCI avoid further losses heading into each school year. In 2009, GCI underwent several of administrative modifications. For example, the GCI board enrolled the entire portfolio in TD Ameritrade
TD Ameritrade
TD Ameritrade is an American online broker with over 6 million U.S. customers, and many more internationally, that has grown rapidly through acquisition to become the 746th-largest US firm in 2008. TD Ameritrade Holding Corporation is the owner of TD Ameritrade Inc...
’s Dividend Reinvestment Program. Instead of accepting dividends as cash income, they are now reinvested as partial shares and should provide exceptional appreciation.
GCI is a company invested primarily in equities. With the exceptionally large cash reserves, GCI strives to capture the greatest upside when the markets inevitably rebounded. As the markets dropped approximately 30%, GCI invested in several securities hoping to find value at the severely depressed prices. Despite uncertainty in the short run, the valuation and appeal of the U.S. economy remains strong in the long term. GCI encourages all members to actively follow new developments in the global financial markets as the summer progresses. Members pay particularly close attention to the housing market (housing starts, Case-Shiller Index), consumer sentiment, the unfreezing of credit (decreasing LIBOR), increased appetite for risk (increased Treasury yields, decreasing gold prices), improved corporate earnings, and other indicators. Also, GCI pays attention to the tug-of-war on commodity prices, as energy prices factor in fluctuating global demand, and continued government spending threatens to spur inflation. The fund's holdings could struggle for several reasons, if the markets surprise members' expectations. However, shareholders should be confident that GCI’s portfolio is well positioned to weather future struggles in the global financial markets. GCI has complete confidence that it will continue its history of success despite the current economic crisis.