Duke Team Triumphs at Carolina Hedge Fund Challenge

25 November 2014 3:32PM

A team of three Duke seniors came out on top at the 2014 Carolina Hedge Fund Challenge on Nov. 21 and was awarded $10,000 for its start-up hedge fund idea. Having developed an original algorithm and an in-depth business plan, Wes Koorbusch ’15, Annie Wang ’15, and Giulia Caterini ’15 pitched their unique quantitative long/short equity hedge fund, Bull City Capital Management, to a distinguished panel of hedge fund professionals.

“I was very nervous before the presentation and in between rounds, but during the presentation I felt pretty good and (was) also running on adrenaline,” Caterini said. “It was a bit surreal when they first announced it; the other two teams had really strong presentations. I really didn't know whether or not it was going to be us.”

The team wrote a computer-generated algorithm and implemented it as a tool for stock selection. Specifically, the model uses the a priori method to take companies' quarterly financial data inputs and makes buy/sell determinations based on selectively combining data points. This methodology is more commonly used in the retail and consumer sectors, but the team saw a unique opportunity to utilize it to generate investment guidance.

Bull City Capital Management faced another Duke team in the finals, Triangle Park Partners (Will Hendrickson ’15, Lucas Fisher ’15, and Diana Liu ’15), and a team from Wake Forest. The panel of judges included Elliot Bossen, founder and chief investment officer of Silverback Asset Management, Eric Koehrsen, investment manager at DUMAC, Mike Hennesy, managing director at Morgan Creek Capital Management, and Rob Brown, managing director at Hatteras Funds. The challenge took place at the Washington Duke Inn & Golf Club. Other competitors included teams of up to three students from UNC-Chapel Hill, Elon, NC State, Davidson, Washington & Lee, University of Richmond, University of Virginia, and Virginia Tech.

Duke had a total of three teams in the challenge, all members of which are enrolled in a fall semester course called “Inside Hedge Funds,” taught by Linsey Hughes, a seasoned hedge fund professional and executive in residence in the economics department. 

"The class is designed to guide Wall Street-track students through the rewards and challenges of running a hedge fund: what makes them succeed or fail, what types of investors look at these funds, and the history behind so many legends in this investment space,” Hughes said. “Once they have all of this information, my expectation is that they come up with a unique idea and build out a full investment strategy and business plan around it. I open the door and they just walk through it."

Participation in the Carolina Hedge Fund Challenge is integral to the course curriculum. A team from Hughes’ spring 2014 course, of which Koorbusch was also a member, won the Atlanta Hedge Fund Challenge in April.

The Hedge Fund Competition hosts regional challenges across the U.S., inviting ambitious finance-focused college students to pitch their start-up investment ideas via a hedge fund structure. In addition to winning the $10,000 cash scholarship, the top team receives a full scholarship to earn the Chartered Alternative Investment Analyst (CAIA) Designation, including Level I and Level II exams and test preparation classes. 

When asked to offer advice to future competitors, Diana Liu of Triangle Park Partners said, “Pick an idea that you are excited about, because you'll have to put a lot of hours into it if you want to win. This requires a lot of brainstorming, testing, backtracking, and perfecting.” Her teammate Lucas Fisher recommended that teams “gather as many critiques as possible because that will help polish the presentation and prepare for answering questions from the panel.”

View the Hedge Fund Challenge website.

Read about the Duke team that won the Atlanta Hedge Fund Challenge.

Learn more about the CAIA Association.