The money is real, the investors are serious.
Cosan is a Brazilian conglomerate producing bioethanol, sugar
and energy. Jillian Fair is pitching the company to an investment
group that will decide whether to buy shares for their portfolio.
Growth drivers for Cosan, she says, include long-term demand for
ethanol and the company’s natural hedge against variation in
demand for its products.
Jillian and two teammates roll through a slick PowerPoint
presentation on Cosan: industry factors, revenue growth, direct
competition comparison, valuation, key ratios and statistics,
growth rates, potential risks and, finally, their recommendation to
buy 200 shares at the market price ($14.75 earlier that afternoon)
and 200 additional shares at $14.25.
The investors have questions: Why is Cosan’s
debt-to-equity ratio so high? Is the fact that the U.S. market is
high a deterrent to buying now? The company is only three years
old—is that a risk? (Actually, the company is
long-established, but has only been listed on U.S. markets for
The group votes twice, first on whether to invest in Cosan,
then, if yes, whether to accept the recommended amount and pricing.
The Cosan team gets unanimous support on both.
This is the Terese Kelly Investment Group at work. Seven MBA
students and six undergraduates, all in suits for the presentation.
Three members will stay on next year; 10 new members have already
been chosen. They have $31,000 invested and $93,000 in cash. They
have their own well-wired workroom; they have a board of investment
professionals and a faculty advisor; they meet twice a week,
earning 1.5 credit hours each semester; they hope to acquire a
Bloomberg terminal next year.
It was UB donor Terese Kelly’s investment in the MBA
program that started the group. Now, group members are starting