Alumni discuss changing global markets with student investment club
The statistics don’t lie — the global economy is shifting. Emerging markets in Asia and Africa have surpassed the United States in gross domestic product growth and projections show signs of continued expansion.
But Chris Bothur ’07 doesn’t think that’s necessarily a bad thing.
“Changes in the market don’t mean you shouldn’t invest in or avoid these countries. It’s an opportunity to learn about these places, their languages and cultures, and find out how we can work together,” he says.
And he knows from experience. Soon after graduating, Bothur, who learned Mandarin while at Connecticut College, became a valuable asset for Deutsche Bank in Hong Kong, where he was regularly brought into meetings — some far above his job level — to translate. “That experience, just being in those conversations, was invaluable.”
Bothur, who now runs an investment startup in New York, recently came to campus and participated in an alumni panel that discussed changes in domestic and global investment strategies since the global financial crisis in 2008. The panel was hosted by the Peggotty Investment Club, a student organization that manages a portion of the College endowment through its own investment portfolio.
The discussion also included Fritz Folts ’82 P’18, a College trustee and chief investment strategist at Windhaven Investment Management; Seth Alvord ’93, founder and managing partner of Balance Point Capital Partners, L.P.; and James Doran, former chief financial officer of Heublein, a former producer and distributor of food and alcoholic beverages. The discussion was moderated by Alexandra Felfle ’10, an associate with The Bank of Tokyo.
Folts explained that, in response to the recent financial crisis, central banks played an unprecedented role in capital markets. When the markets interpreted a potential depression in 2008, interest rates around the world were dropped to record lows. While the U.S. worked through the crisis by dropping rates to nearly zero, European countries are still recovering today for not assertively lowering rates.
Alvord said that as a result of the crisis, there has been a substantial increase of regulation in the marketplace. “The market is still aggressive today,” he explained, “but investors are far more careful. History can easily repeat itself.”
Another effect of the crisis has been the rapid development of emerging markets. Bothur said that many who invested in Asia prior to the downturn were devastated and capital fled the region, but those who were able to ride out the storm have survived — and flourished.
But while Folts trumpeted the statistics showing a major shift to Asian markets, Alvord, who doesn’t invest overseas, cautioned students on the numbers. He explained that reporting systems in emerging markets lack the sophistication of those in the U.S. and Europe, and therefore can be unreliable.
“I’m a buyer in the U.S., and we’ve positioned ourselves to adapt to emerging markets. Look at all of our major corporations, and you can see they have a major global presence,” Alvord said.
The panelists did agree on one inevitability: change. “We’ve gone from an agricultural to service economy in less than 100 years,” said Doran.
“Most jobs that your generation will have don’t exist yet,” added Folts. “Change is happening so quickly, and the most important thing is preparing yourself to think critically in this environment.”
The event also recognized the commitment of Doran, who established the Peggotty Namm Doran ’58 Endowed Scholarship in 2002 in honor of his late wife. That same year, he also established an endowed fund to support programming for the investment club, which is responsible for the investment of the scholarship fund as a portion of the College’s endowment. The club is one of only a few college or university clubs in the country that operates with actual money.
Last year, Doran made a challenge gift for additional support of the club, and Alvord matched it.
“It gives me great pleasure to see how much this club has grown since it started,” said Doran. “I’m so proud of its successes. When I see the annual report, it reminds me of a report from a multi-million-dollar firm. I’m always impressed.”
November 12, 2014