A firm that can consistently beat the S&P 500 is a unicorn amongst Wall Street investors. But, Global Platinum Securities has done just that since 2008.The firm’s advantage?It’s run entirely by undergraduate college students.
MarketWatch foundthat 0.6% of investors havegenuinetalent for beating the market. However, Global Platinum Securities (GPS) has been beating the S&P 500 every year since 2008 and, since its first investment in 2005, has outperformed the S&P by 2.9% in annualized returns over its 10 years.
Although they are not paid, students have the option to invest their own money in the fund, which has grown to about a quarter-million dollars, and is run 100% by undergraduate students with alumni as advisors. Most do it for the real-world experience.
“(The returns are) quite remarkable,” says company COO Lucas Wimmer, a senior studying International Economics at Georgetown University. “The other thing is, of course, everyone in GPS … is a good investor in their own right, but we’re also all students, so I think that makesit even moreremarkable is that we’re able to do it and it’s not our full-time job.”
The Company
GPS is celebrating its 10 year anniversary this year. Alumni stay involved with the group by meeting with students at tri-annual conferences, advisory meetings and duringrecruitment. Students admitted into the group are given extensive investment training, which culminates in a stock pitch for alumni at one of the group’s conferences in New York City.
Harvard University, Georgetown University, University of Dayton, London School of Economics, University of Colorado, University of Pennsylvania, Massachusetts Institute of Technology and New York University make up the eight ‘pods’ that comprise the company.
The recruitment process varies from school to school, but the acceptance rate to be admitted into one the eight groupsis about 2%, as each school maintains a current undergraduate membership between seven and 10 students.
Each school accepts about three to four new students per year, usually selecting freshmen. Applications differ from school to school; Georgetown receives about 100 each year, while Colorado receives closer to 40. This is primarily due to a difference in the amount of marketing done at each school.
Although their activities are finance-focused, the group takes students from all majors and academic backgrounds, from economics to pre-med.Students are broken into market sectors, such as technology or healthcare, and research their own investment initiatives based in valuing companies over the long-term.
In addition to participating inweekly meetings, former CFO and senior at the University of Colorado Nolan Smith estimates students work between twoand 10 hours per week, depending on how much is going on in the markets at a given time. Over the summer things are slow, as many GPS students take internships.
According to Wimmer, the purpose of GPS is to help educate students and develop investing skills, as well as to form bonds with other students’ that have an intense intellectual curiosity.
Secret Sauce
Wimmer attributes the success todiscipline,while Smith believes the group’s success is a testament to their education process -- a year in an analyst program -- and to a passion for investing.
“I think that at the base of GPS … is that we emphasize quality,” says Smith. “We want quality relationships, quality education, quality of returns and as a whole that allows us to create the best performance for our fund, the best experiences for our members and ultimately lets us give back the most to our communities and to those that have supported us throughout this process."
Networking
Other than the opportunity for investing experience, both Smith and Wimmer say that much of the benefit from the group is derived through the relationships that are built within groups, acrossschoolsand with alumni. At Georgetown, the group gets dinner together at least once every week.
“It’s not the same as working for a company where you have to maintain a professional relationship … we can have a personal relationship and a professional relationship with someone,” says Wimmer.
“It’s incredibly collaborative. One of our mottos is that we’re friends before colleagues so it’s an incredibly close-knit group … the network is hands down the most powerful part of GPS.”
Philanthropy
The group also maintains a philanthropic focus, doing a service project together every semester to help those that are in need in their communities. They also helped out with Meals on Wheels at their New York City convention.
“One of the coolest features, I think, of GPS is that it doesn’t teach you so much about just investing and finance, but more how to think, how to be successful… and how to be passionate about what you do and turn those passions into profit and ultimately give back,” Smith says.
Brooke Fox is a University of Colorado student and a fall 2015 USA TODAY College correspondent.
This story originally appeared on the USA TODAY College blog, a news source produced for college students by student journalists. The blog closed in September of 2017.
