Behavioral Economics and the Retirement Savings Crisis
Shlomo Benartzi and Richard H. Thaler
Reprinted with permission from Science Magazine
Many countries are facing a retirement savings crisis. In the United States, for example, the fraction of workers at risk of having inadequate funds to maintain their lifestyle through retirement is estimated to have increased from 31% to 53% from 1983 to 2010 (1). Roughly half of U.S. employees (78 million) have no access to retirement plans at their workplace (2). Fortunately, there are solutions to these problems. We simply have to change the choice architecture of retirement plans by utilizing the findings of behavioral economics research (3) and make such plans available to all workers. We describe a large-scale field demonstration of the potential impact of such research-based changes in how we save.
Fink Center Fellows Program
The Fink Center hosts two Fellowship Programs yearly. Students with great potential are chosen as Fellows and receive 3 industry mentors. Mentors come from leading fi rms and every effort is made so that each Fellow receives a mentor that is junior, mid-level, and senior in their career. Fellows also receive a nominal Fellowship Award. Congratulations to this year's Fellows:
2013 INVESTMENT BANKING FELLOWS
Steve Hollich is pursuing an MBA specializing in finance while at UCLA Anderson. Upon completing undergrad, Hollich joined Bank of America Merrill Lynch as a Collateralized Debt Obligation analyst in Chicago and later worked as an underwriter in the commercial bank in San Francisco. Most recently, Steve worked at Martin Wolf M&A Advisors as an analyst covering middle-market companies in the IT sector. At Anderson, Steve is a fi rst-year director of investment banking in the Investment Finance Association and a member of the Wine Club. He graduated from the University of Wisconsin - Madison with a Bachelors in Business Administration majoring in both Finance and Real Estate. Hollich has accepted a summer position at Moelis & Co. in Los Angeles.
Andrew Skrip is pursuing his MBA at UCLA Anderson. Most recently, he worked at Union Bank, where he focused on fi nancial planning, analysis and business strategy within the retail banking segment. At UCLA, Skrip is a fi rst- year director of investment banking in the Investment Finance Association and a member of the Entrepreneurial Association. Skrip attended Claremont McKenna College, where he majored in Economics and Accounting and was a four-year letter winner of the Men's Varsity Basketball Team. Upon graduation, he took a role with Pricewaterhouse-Coopers and gained CPA licensure. Skrip will be interning at Deutsche Bank in San Francisco this summer.
Matthew O'Connell is pursuing an MBA in fi nance at UCLA Anderson. Prior to Anderson, he spent fi ve years at Greenwich Associates providing strategic consulting services to institutional fi nancial services clients. At Anderson, O'Connell is a fi rst-year director in the Investment Finance Association. He graduated with Honors from the University of Connecticut where he majored in Economics and Political Science. O'Connell is spending the summer at Bank of America Merrill Lynch in New York.
2013 INVESTMENT MANAGEMENT FELLOWS
Aylon Ben-Shlomo is pursuing his MBA with a concentration in Finance - Investment Management at the UCLA Anderson School of Management. He is a fi rst year director of the Anderson Investment Association and the Jewish Business Student Association. Prior to UCLA Anderson, Aylon spent three years at Ivory Investment Management, a long/short equity hedge fund. Earlier in his career, he worked in the fi nancial services audit practice at Deloitte & Touche in New York. Aylon obtained an accounting degree from the University of Maryland. He enjoys beach volleyball, golf and sports debates. Aylon is a licensed CPA in the State of New York and was awarded the CFA designation in 2011. Aylon will be an equity analyst intern this summer at PIMCO
Wenting Shen is pursuing her MBA at UCLA Anderson. She is a fellow of the Student Investment Fund (SIF) and is a director at the Anderson Investment Association (AIA). Prior to business school, Wenting was an equity research analyst at Goldman Sachs where she covered the healthcare sector. Her team ranked fourth across all sectors in the 2011 Wall Street Journal Best China Analyst Awards. She authored a number of reports, including the Transforming China series etc. Wenting worked most recently in the Singapore offi ce, but has also worked in the Beijing and Bangalore offi ces of Goldman Sachs. She graduated from Beijing University with a major in Finance, and was an exchange/visiting student to Harvard University, University of St. Gallen, and Tokyo University. She was a volunteer in Delhi, India during her senior year in college. Wenting will be an equity analyst intern at Fidelity Worldwide Investors over the summer of 2013.
Giovanni Urbanucci is pursuing his MBA in fi nance at the UCLA Anderson School of Management. Prior to business school, Urbanucci worked in public accounting at Pricewaterhouse Coopers LLP in Boston where he led audits of investment companies as a manager in the Assurance practice. At Anderson, Urbanucci is a director of the Anderson Investment Association, member of the Student Investment Fund, and level III candidate in the CFA program. He also held a part-time academic internship at Kiitos Capital Management, a long/short value hedge fund in Los Angeles. Urbanucci holds an undergraduate degree from Boston College and is a Certifi ed Public Accountant in Massachusetts. He will be doing equity research this summer at Trust Company of the West.
Danielle Zainer is pursuing her MBA with a concentration in Finance - Investment Management at the UCLA Anderson School of Management. She is a first year director of the Women's Business Connection. Prior to UCLA Anderson, Danielle spent four years as an analyst at Pacific Alternative Asset Management Company (PAAMCO), a hedge fund of funds investment fi rm. Prior to PAAMCO, Danielle worked at Dilts Ventures, a boutique investment consulting firm, where she specialized in corporate venture capital and early-stage investing strategies. Danielle received her undergraduate degree in business and fi nance from USC Marshall. She holds the CAIA designation and has her Series 3 license. Danielle will be interning at Oaktree Capital this summer in the firm's Client Relations group.
The Fink Center is deeply grateful to members of the finance community who have participated as mentors in the Investment Banking and Investment Management Fellowship program. Without their help, this program would not be possible. We thank the following firms for sharing their time, expertise, and guidance with our Fellows.
|iNVESTMENT BANKING FIRMS:||iNVESTMENT MANAGEMENT FIRMS:|
|Bank of America Merrill Lynch
Deutsche Bank Securities
|American Century Investments
Bel Air Investments
CalTech Endowment Fund
Dimensional Fund Advisors
Research Affi liates
Wells Ca pital
A Discussion of the Investment Principles with Ric Kayne & Howard Marks
The Financial Implications of Going Green
On January 16, 2013, the Fink Center for Finance & Investments partnered with the Institute of the Environment and Sustainability and their Corporate Partners Program to present a conference on the growing link between fi nance and sustainability.
The conference commenced with a report on labor productivity at green firms by environmental economist Magali Delmas, a faculty member with the Institute of the Environment and Sustainability and the Anderson School of Management. Her talk concentrated on the relationship between environmental and social strategies and the resulting fi nancial performance. Professor Delmas highlighted her research on the implementation of environmental and social practices and the resulting increase in labor productivity. She provided real-world examples of this adoption in action, identifying Clif Bar, Adobe, Patagonia, and Timberland as organizations that have yielded positive outcomes as a result of their sustainability initiatives.
High-level senior executives from businesses with notable corporate responsibility records were part of a panel discussion. The featured speakers were David Hendler, Senior Executive Vice President and Chief Financial Officer, Sony Pictures Entertainment (SPE), Eric Johnson, Vice President of Capital Projects, Roll Global, and John Lemmex, Chief Financial Offi cer, Bayer MaterialScience.
Hendler demonstrated how golden Hollywood goes "green." Citing examples from SPE feature fi lm and television properties, the presentation emphasized that "actions are greener than words." SPE incorporates eco-conscious practices into how they produce their entertainment through defi ned carbon emission and zero waste goals, green production policies and packaging, and employee engagement.
Johnson began his talk by noting the company's principle of "Doing well by doing good." Roll Global is a private international corporation with a focus on healthy products. Their brands include Fiji Water and POM Wonderful. The talk chronicled Roll Global's sustainable projects such as setting up solar panels and installing fuel cells at sites throughout California. Bayer's Lemmex gave an overview of his organization and discussed their sustainability strategies.
Bayer is a global enterprise and inventor company with competencies in the fi elds of health care, agriculture, and high-tech materials. The company's sustainable initiatives are divided into three categories: application innovation, responsible operations, and life-cycle stewardship. Their efforts include utilizing renewable energy sources and renovating buildings to meet LEED (Leadership in Energy and Environmental Design) standards.
Bill Kurtz of Bloom Energy delivered the concluding keynote address that focused on the fi nancial benefi ts of fuel cells. Bloom Energy is the leading manufacturer of solid oxide fuel cells. This technology generates clean, highlyeffi cient power onsite from a wide variety of fuel sources.
The event closed with a cocktail reception that facilitated further discussion on the topics addressed during the conference.
The 2nd Annual UCLA Investing Conference
Every spring the Fink Center partners with the Anderson Investment Association and Kenneth Broad ('94) to sponsor a conference on investment management. The conference is attended by over 400 students, alumni, faculty, and industry professionals who gather to hear wellrespected executives share investing insights accumulated over years in the business, company history, as well as career advice. The full day event includes a registration breakfast, multiple fi nancial panels, fi reside chats, a keynote speech, networking lunch, and cocktail reception.
The 2013 Conference, held on February 8, 2013, was kicked off by Baron Birkofer (MBA Candidate 2013), AIA President. The fi rst panel discussion, "Generating Alpha Through Quantitative Strategies" included Wayne Dahl (Head of Risk Management, Canyon Capital Advisors), Robert Gingrich (Risk Manager, WAMCO), Steve Sapra (Senior Vice President, PIMCO) and was moderated by Shane Shepherd '07 (Head of Fixed Income Research, Research Affi liates). The second morning panel "Behavioral Finance: The Psychology Behind Investing" featured Kenneth Broad '94 (Senior Portfolio Manager, Delaware Investments), Cynthia Harrington (Principal, Cynthia Harrington & Associates), Randy Saaf (CEO, AlphaGenius Technologies), Avanidhar (Subra) Subrahmanyam '90 (Professor, UCLA Anderson), and was moderated by Dan Pomerantz '00 (Principal, Bessemer Trust). The fi nal morning panel "The Unprecedented State of Credit Markets" featured Howard Levkowitz (Managing Partner, Tennenbaum Capital Partners), Desmund Shirazi (Managing Director, Oaktree Capital Management), Melissa Weiler (Managing Director, Crescent Capital) and was moderated by Arun Rao (MBA Candidate 2013). Following lunch, attendees learned the ins and outs of "Value Creation Through Public and Private Equity", a fi reside chat featuring Sarah Ketterer (CEO & Portfolio Manager, Causeway Capital) and Stephen Royer '91 (Partner, Shamrock Capital Advisors) and moderated by Srinivas Pulavarti (President & CIO, UCLA Investment Company). The closing keynote address was given by Josh Friedman (Co-Founder, Co-Chairman & Co-CEO, Canyon Capital Advisors). To end a successful day, students, alumni, and investment professionals finished with a networking reception in the Alumni Plaza.
On Friday, February 22, UCLA Fink Center held its 2nd annual Fink Center AIA Stock Pitch Competition that brought together 12 teams from the top MBA programs across the country. The teams included: UCLA Anderson School of Business, Chicago Booth School of Business, Columbia Business School, UVA Darden School of Business, Duke University Fuqua School of Business, UC Haas School of Business, Indiana University Kelly School of Business, Richard Ivey School of Business, Michigan Ross School of Business, MIT Sloan School of Management, University of Rochester Simon Graduate School of Business, and USC Marshall School of Business. The full day competition was split into two rounds, a fi rst round in the morning and a fi nal round in the afternoon. During the morning rounds teams competed simultaneously in 4 rooms and pitched a long or short stock that they chose from a list of 20. Each room was judged by two industry professionals and the fi nals were judged by 5 industry professionals. Judges came from top fi nance fi rms including: PIMCO, TCW, DoubleLine, HighMark Capital, UCLA Investment Company, Research Affi liates, MAZE Investments, and Anderson. Teams were randomly assigned presentation time and room, and the best team from each of the 4 morning rooms was chosen to proceed to the fi nals. During lunch, as judges deliberated, students enjoyed a keynote speech by Joel Fried, President and Director of PRIMECAP Management Company. Joel spoke about his start in investment management and how he thought he was so lucky to be paid for what he loved to do. He spoke about market crises and the ups and downs that come with working in the business. Finally, he gave students advice on how to pick the best stocks and spoke about a stock - an LED light manufacturer and an industry sector - pharmaceuticals that he likes right now.
Private Equity Roundtable
On March 13th, 2012 UCLA Fink Center sponsored its annual Private Equity Roundtable at the Hyatt Regency Century Plaza. The event brought together over 100 individuals, to discuss the state of private equity today. The event began with a cocktail reception where students mingled with over 60 industry professionals coming from the top private equity shops in southern California. This reception was followed by a keynote discussion by Robert (Bob) Sinnott, President & CEO, Kayne Anderson Capital Partners, and moderated by Al Osborne, Senior Associate Dean of UCLA Anderson. Bob talked about how he entered into private equity and how he joined Kayne Anderson. He spoke about Kayne Anderson's aversion to leverage in the oil and gas space and about how they like to compete where Wall Street isn't looking for them - a strategy that has helped them succeed in earning great returns on their investments. Finally, he gave advice on how to choose a firm and advised that the right culture was one of the most important aspects of fit. The evening concluded with 3 roundtable sessions. Students got the opportunity to speak with industry professionals at intimate table settings for 15 minutes before moving on to the next table. The event is an annual event sponsored by the Fink Center for Finance and Investments and hosted by the Investment Finance Association club at UCLA Anderson.
|COMPANIES IN ATTENDANCE INCLUDED:|
Aurora Capital Group
Caltius Equity Partners
Creo Capital Partners
Energy Capital Partners
Freeman Spogli & Co.
Kayne Anderson Capital
Leonard Green & Partners
Levine Leichtman Capital Partners
Shamrock Capital Advisors
Signature Capital Partners
The Carlyle Group
The Riverside Company
Vintage Capital Group
FINK CENTER RESEARCH SEMINAR SERIES
The Fink Center in 2012 began an effort to further connect faculty and students by hosting weekly research seminars where faculty can present their current research to students. This seminar is hosted every week during lunch and faculty and students engage on topics beyond the classroom. The Winter research series included finance faculty from Anderson and the Spring research series has broadened to include faculty from Finance, Marketing, and Economics. While all presentations were great, a few examples of great research are: Bhagwan Chowdhry who presented on Designing Markets for Impact Investing in Businesses, Hanno Lustig who presented on The Costs of Quantitative Easing: A European Monetary History Lesson for Today's Central Bankers, and Suzanne Shu who presented on Preferences and Framing Effects for Consumers' Retirement Income Decisions. All papers can be found on the Fink Center website at: http://www.anderson.ucla.edu/centers/fink-center-for-finance-andinvestments/events/fink-center-studentseminar-series
FINK CENTER MARKET CHAT SERIES
The Fink Center began in spring 2013 sponsoring monthly market chats. Market chats are held over lunch with 8-10 students where speakers from the industry come to discuss fiscal and monetary policies, financial markets, and specific investments.
|Adam Epstein||Portfolio Manager Maze Investments||April 10||Stock Selection|
|Jerry Nickelsburg||UCLA Anderson Forecast and Adjust Professor||May 15||Fiscal and Monetary Policies Effect on the Markets|
ASAM SPEAKER SERIES
The Fink Center sponsors the Anderson student Asset Management Club at UCLA Anderson. The club manages an investment fund that seeks to identify and exploit investment opportunities through large-sample quantitative techniques and detailed fundamental analysis of specific companies. The fund's annual report can be found on the Fink Center website at: http://www.anderson.ucla.edu/anderson-student-asset-management-(asam)
|Carl Ludwigson||VP Manager Research, Bel Air Investments||Dec. 3||Hedge Fund Manager Research|
|Mick Swartz||USC Professor, Founding Member of the
Los Angeles Branch of the Chartered
Alternative Investment Association
|Feb. 25||Hedge Fund Industry|
|Ankur Kohli||Director/Cliffwater Advisors||Jan. 14||Hedge Fund Industry|
|Phill Scully||Equity Research Associate at Capital Group||Jan. 28||Capital Group and Long Term Investing
in Equity Market
|Kevin Lenaghan||Former ASAM Fellow and Hedge Fund Analyst||Feb. 4||Global Marco Stock Investing|
UPCOMING FINK CENTER EVENTS
Larry Fink & Bill Gross Event - October 3, 2013
investment Banking Fellow Application and Selection Process - October 11, 2013
Investment Management Fellow Application and Selection Process - October 18, 2013
Faculty Research Series - weekly
Market Chats - monthly
Research Grant Submissions - ongoing
AIA Conference- February 7, 2014
Faculty Research Series - weekly
Market Chats - monthly
Research Grant Submissions- ongoing
Fink Center AIA Stock Pitch Competition - February 28, 2014
PE Roundtable March 12, 2014
Faculty Research Series - weekly
Market Chats - monthly
Research Grant Submissions - ongoing
Fink Center Bulletin Comes Out!
Research Grant Submissions - ongoing
Phd Summer Sponsorship
The Fink Center sponsors and hosts numerous other talks and conferences throughout the year.
UCLA ANDERSON MFEs WIN 2012 TRADING CHALLENGE COMPETITION
This year a number of MFEs participated in the University Trading Challenge at NY's Baruch College. The challenge culminated in New York on November 16, 2012.
Congratulations to the winning team and all of the MFE students who participated in this competition.
Can Zhao, Class 2012
Hui Chen, Class 2012
Bo Wang, Class 2013
Yun Lei, Class 2013
TEAM 2 - STUDENTS FROM THE CLASS OF 2013
Ensu Yang (Best individual trader winner)
Pithawat Tan Vachiramon
THE ROSS INVESTMENT COMPETITION
The Ross Investment Competition was a two-day event, November 15 & 16, 2012 featuring 11 top MBA programs from both the U.S and Europe.
The participants included:
- Chicago Booth School of Business
- Columbia Business School
- Duke - The Fuqua School of Business
- Kellogg School of Management
- London Business School
- NYU Stern School of Business
- Richard Ivey School of Business
- Stephen M. Ross School of Business
- SC Johnson Graduate School of Management
- Tepper School of Business - Carnegie Mellon University
- UCLA Anderson School of Management
The competition consisted of two rounds where the teams presented in front of a panel of 8 judges (buy-side analysts, sell-side analysts, and portfolio managers). Prior to the event, the judges put together a list of 25 investment options and distributed the list to all registered participants. Each team had to select one investment option and put together a presentation to either buy or sell the security. In addition, each team had to develop a second presentation to recommend either a buy, hold, or sell rating for Ford Motor Co., in case the team was selected for the final round. For both rounds, each team was allotted 15 minutes for the presentation and 30 minutes for Q&A.
For the first round, UCLA pitched Tractor Supply Co. (TSCO, buy rating, PT $112). They presented very well and made it to the fi nal round. Three other teams made it as well: Michigan's Ross School of Business, Cornell's Johnson School of Graduate Management, and Carnegie Mellon's Tepper School of Business. For the fi nal round, all teams pitched Ford Motor Co. UCLA placed second by recommending a hold rating and PT of $12. For the second place fi nish, they were given a SumZero Elite membership ($1,500 value). Ross won the competition and was awarded a $5,000 grand prize.
The Fink Center for Finance & Investments
UCLA Anderson School of Management
110 Westwood Plaza, Los Angeles, CA 90095