Transition Techniques

Eric Schweitzer, vice president, global outplacement and executive coaching consultancy at Challenger, Gray & Christmas, Inc. lead a panel discussion about employment transition on Tuesday, August 7 for members of the CFA Society Chicago. In addition to leading the conversation, Eric shared his experience transitioning from a bank trust department to an outplacement and coaching position. He emphasized the importance of preparation to identify relevant skills and brand.

Nancy Fehrenbach, CFA, a financial planning analyst with Phase 3 Advisory Services, Ltd. shared her process “re-entering” the investment advisory business after an extended time working as a mother, for non-profits, and as a school board president. Fehrenbach found that networking with friends and acquaintances helped her gain insights into how her experiences and skills could translate into a new role in the financial services industry. She found that investment advisory firms often look for new hires with “a book of business.” Her time away from the industry and skill set focused on analysis and customer service versus new business development. She eventually found the appropriate role for her providing financial planning services to individuals.

Daryl Brown, CFA, a director of market strategy at TransUnion, found self-evaluation tools and books, like What Color is Your Parachute, helpful in “boiling down” his skill set to effectively sell himself. Brown emphasized the importance of networking through LinkedIn. He used LinkedIn to find people that had a connection to employers that he wanted to pursue. He found that people wanted to offer assistance. Daryl encouraged the audience to reach out, even if it feels uncomfortable. Brown subscribed to the LinkedIn premium level and used the skills and endorsement features.

Phil Jandora, CFA, a senior transitions analyst in the Investments group at Willis Towers Watson, supported the critical importance of social media in his job search process. He used LinkedIn to learn about opportunities and to build out second and third level contacts. Jandora’s experience supports the advice presented in various “Jump Start Your Job Search” messages- your resume is a necessity but your network is critical. Jandora also noted that programs like Toast Masters or improvisation training can help build the communication skills necessary for the job search process.

Tim Byhre, CFA, director of business valuation at RSM, emphasized the importance of level two connections in the job search process. Most significant, he noted the importance of maintaining and building relationships before you need them. Byhre also noted his use of Glassdoor to learn about the culture of companies. He read Glassdoor reviews about what it’s like to work at the firm to determine if the firm would be a good fit for him. Tim emphasized the importance of writing down your skill set along with an explanation of how they can be used to further the success of a potential employer.  He found this preparedness very helpful when interviewing.

Eric Schweitzer supported the importance of networking and emphasized that you should know the answers to the following questions before making calls – why am I calling, what am I looking for, and why am I looking? He also noted that you should ask the individual to “do something”- offer a reference, referral, opening to a company, etc.

The panel emphasized the importance of finding a cultural fit. Fehrenbach noted her desire to work with people that she liked and enjoyed being around. Schweitzer noted that the right role at the wrong company can lead to failure. Brown said that potential employers will probably recognize a cultural mismatch, so don’t waste time compromising for a paycheck.

All agreed that a disciplined process with a focus on the future that reaches out to second level contacts can produce a successful employment transition. Throughout the process, focus on the audience’s perspective with an emphasis on “how” or “why” versus “what”. A final thought from Schweitzer – employers want to know how you are going to help them fix their problems without bringing any of your own along.

Volunteer of the Month: August 2018

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       Kevin Ross, CFA

Kevin Ross, CFA, has been a CFA Society Chicago member since 2009 and served on several advisory groups including Education, Distinguished Speaker Series and Professional Development.

This month Kevin is being recognized for his efforts with the Professional Development Advisory Group.  Kevin has served as a mentor for the Society’s Mentorship Program since the inception of the revamped program. This summer Kevin has taken a lead role with the Mentorship Program and elevated it by researching and securing a speaker to present a 90-minute session on what it takes to establish a strong mentoring experience. This session will be available to the broader membership in late October accessible via the Society’s website.

Kevin, thank you on a job well done!

Distinguished Speaker Series: Ari Paul, CFA, BlockTower Capital

It was an inauspicious day for a cryptocurrency discussion. With many cryptocurrencies down by over 10% on August 8th, Ari Paul, CFA, CIO of BlockTower Capital, gave CFA charterholders a crash course in blockchain technology and the various cryptocurrencies available for investors.

Paul said that surprisingly, many risk management professionals such as himself were among the biggest proponents of cryptocurrencies. Risk skills are definitely helpful for evaluating and investing in digital assets such as Bitcoin, and Paul believes that the space sits at the intersection of game theory, cryptography, computer science, economics, venture capital and public markets. He said that very few individuals have all of these skills, and that there is a big opportunity for people with just a small amount of cryptocurrency knowledge to generate large returns because most people don’t know much about the space yet. He compared investing in cryptocurrencies today to investing in stocks pre-Benjamin Graham. Although the idea of the blockchain is not exactly new (Paul pointed to patents received by IBM back in the 1970s for distributed databases), the current digital coin offerings such as Bitcoin, Litecoin and Ethereum are all under a decade old.

The big question when considering how to approach cryptocurrencies is “What are these helping and why do we need this?”

Paul said that a big part of the need stems from banking and capital markets technology being incredibly obsolete. He cited the examples of ACH bank transfers taking 4 days to process and $35 fees for international Western Union transfers being an opportunity for cryptocurrency disruption. While the internet has greatly increased the speed of messaging and email, payment transfers have not seen the same amount of development.

There are 3 main enhancements to the original ideas of distributed databases that have greatly increased the interest in digital currencies and blockchain lately:

  • Proof of work mining, which ensure skin in the game
  • Public key cryptography
  • Permissionless blockchain

A simple definition of blockchain could be a type of database that has its transaction entries linked with cryptography, the art of solving codes. Cryptocurrencies are the intrinsic, tradeable tokens of blockchain and the most commonly known version is Bitcoin, which had over $100 billion in market cap on the day of this presentation. Intrinsic tokens can be spent on monetary transmissions (Bitcoin) or on decentralized computing power (Ethereum). There are also asset backed tokens that can be created by a third party.

There are over a thousand digital coins tracked by coinmarketcap.com, but Paul said that the use cases and value propositions of most of them can be described in terms of three distinct categories:

  • A censorship-resistant store of value – “digital gold” or a “Swiss bank on a phone”
  • Utility tokens – amusement park tickets or paid API codes
  • Tokenized securities – crypto versions of traditional asset ownership interest

Paul said that the Initial Coin Offering market, or ICOs, has exploded in the past year, becoming larger than the overall seed stage VC market. “Many people, including myself, are skeptical of the ICO business model,” Paul said, saying that ICOs are like “hot potatoes” that speculators will often try to offload on unsuspecting get-rich-quick hopeful investors, saying that they can be seen as analogs to Chuck E. Cheese tokens.

In terms of how investors are accessing cryptocurrencies, Paul said that “we’re transitioning from crypto being un-investible [by most] to far easier,” mentioning Coinbase and other exchanges that have greatly risen in stature over the past couple years. While individuals have an easier time of buying digital coins such as Bitcoin, it is still difficult for institutional investors to access them because there aren’t many good custody options. Paul thinks that major custody bank State Street may be as far as three years away from launching a viable cryptocurrency custody product. There is also a high degree of risk of theft with the coins, and even a sophisticated investor such as Paul believes that his firm will ultimately lose money from a collapsed exchange, such as the hack of Mt Gox in 2014. Other factors limiting institutional participation in crypto include operational risk in handling the assets, the lack of credible managers with 2+ year track records and the absence of well-constructed, low fee passive indexes.

Despite the 2018 meltdown in cryptocurrency prices, Paul appeared sanguine about their long term prospects, noting that every 2 years or so there has been a large boom-bust cycle in the space, and that the potential for growth is still enormous. While Bitcoin is “already obsolete from a technology perspective” according to Paul, it still commands a widely-known brand name in the space and there’s still a huge amount of investment by institutions such as CBOE and Square. It’s difficult to know which cryptocurrency will win out in the future, but Paul believes that an allocation could make sense for some investors that can be patient riding the frequent ups and downs of the digital coin landscape.

Factor-Based Investing

The CFA Women’s Network hosted a lively and vibrant event featuring Patricia Halper, CFA, partner and co-chief investment officer at Chicago Equity Partners. Halper spoke to a room full of engaged members on the topic of factor-based investing which coincides with the popular topic “Smart Beta” investing. The subject is more relevant than ever as investors question the worth of fundamental active stock-pickers in search of both better performance and lower expenses. As a brief introduction, Halper has been working at Chicago Equity Partners for over twenty years as both a member of the quantitative research team and a portfolio manager.  Prior to CEP, she worked at Paine Webber on the institutional futures sales desk. Halper holds a bachelor’s degree in mathematics from Loyola University Chicago, a master’s degree in financial mathematics from the University of Chicago, and is also a CFA charterholder. Currently at Chicago Equity Partners, Halper utilizes factor-based investing strategies to support the firm’s equity decision making processes.

Simply stated, a “factor” is a characteristic of a security that explains its investment return. Factor investing in its most simplistic form can be described by the traditional CAPM equation: E(r) = rf * B(Rp-rf) where beta represents the single factor. In examining how a factor can be used towards making investment decisions, the question an investor must then ask is twofold: “Is this factor a good predictor of future price movements?” and then secondly “Which side of the factor (high beta or low beta in this case) will outperform the index?” Expanding upon a tradition single-factor model, Fama and French introduced the three-factor model in the 1990s which included beta, size and value.  In the late 1990s, quality factors came into light such as balance sheet quality, earnings quality, and quality of the management team. Today, there are hundreds of factors that investment professionals analyze to explain investment returns. Bottom line: factor investing is a known proven strategy that has been around for many years.  If you get the direction of correlated factors correct, you will likely outperform your benchmark.

Some of the most common factors used today include:

  • Value:  Low price/earnings, low price/sales, low price/book value
  • Quality: Strong management team, high earnings quality with lack of one-time items, low balance sheet leverage
  • Momentum: Both price momentum and earnings momentum generally provide outsized returns.
  • Size:  Smaller companies have outperformed larger companies over a long period of time
  • Volatility: Less volatile stocks provide higher expected return over the long term.

There is a key asterisks to the factors noted above. High value, high quality, positive momentum, small market cap, and low volatility have all shown to be positive factors of price performance…  over a 20 YEAR period. Often times, clients don’t have the investment horizon (or patience) to stick with a strategy that doesn’t work over several years, or even more commonly over several quarters.  In fact, the opposite of what is true in the long term (20 years) can be true in the short term (several quarters to even years). The key to understanding which factor is the most relevant to excess return is to understand what cycle of the market we are in. Halper described three market cycles:

  • Expansion: Most often markets are in expansion mode as markets generally trend higher. Momentum factor outperforms the most in expansionary periods (5%+ excess returns) and tends to work because investors tend to chase winners.
  • Downturn: At the end of the expansion period, you see a shift to Low Volatility and High Quality names with strong balance sheets that provide the best excess returns. This period can be considered recessionary with negative GDP growth.
  • Rebound: Finally, the rebound period doesn’t last long between when the downturn ends and when the expansion cycle begins—typically 2-3 quarters.  During this short time period, Value outperforms best.

Taking our single-factor observations above one step further, there is empirical evidence that If you know how to combine multiple factors into a model, a multi-factor portfolio will outperform a single-factor portfolio with less risk. There is a cyclicality in any one factor  and the cyclicality of factors increased during the global financial crisis.  It is best as an investment manager to pick at least two factors to structure your portfolio. That being said, you have to use two factors that are moderately correlated, otherwise one factor will tell you to buy and another to sell and you will naturally be holding the indexed market.. or cash!  How you combine factors, how you weight them, and how you allocate each factor is the name of the game for outsized returns. It is also critical to highlight that another key to successful factor based investing is having high quality data. High quality data has both a wide breadth and a long time horizon and without high quality data, your model will give false signals into which assets to buy and sell.

The analysis of factor based investing begs the question how is it related to the popular term in the industry right now “Smart Beta” investing.  Smart Beta strategies have shown tremendous AUM growth largely due to a general dissatisfaction with traditional equity asset managers. Asset allocators ask of Smart Beta products, “Can you perform better than a traditional passive index at a rate that is cheaper than active equity managers?” To put figures around the growth, in 2008, there was $100mm invested in Smart Beta strategies. Today, there is over $1 Trillion, a ten-fold increase in the last 10 years.  The largest smart beta funds, largely run by Vanguard and Blackrock, trade based on growth and/or value, what is otherwise a very traditional style-based factor investing that has been around for 20 years. When you take a closer look under the hood, even though these products are called “Smart Beta”, it is really the same principles just repackaged with a sexier word for the times. It’s not quant analysis, and if the product is only focused on a single factor, it’s not multi-factor investing either. If the Smart Beta product is only using a single-factor approach, it is simply “Quant 101” that has been around for over 20 years. Multi-factor Smart Beta products are a very small portion of the market which undoubtedly will grow over time. Investors should note that if they plan on buying a smart beta product, be aware of the sector exposures, as some have very high sector exposures which can overwhelm your factor exposure if you are overinvested in an industry that has sector specific issues.

What does the next 10 years look like? What factors will outperform in this current market environment? The Fed is now raising interest rates and ending its 10-year quantitative easing program.  How will turmoil in foreign markets and currencies impact our domestic equity and bond markets here at home? Only time will tell, but what is clear is that factor-based investing should be in every investment manager’s tool chest as they evaluate market trends and the price movements of its underlying securities.

CFA Society Chicago Book Club:

Bullsh*t Jobs by David Graeber

We’ve all had jobs that at times felt unnecessary, redundant, or even harmful.  David Graeber’s Bullshit Jobs (2018) provides numerous examples of such jobs such as “flunkies” who exist only to make others feel important and whose examples include some receptionists and chiefs of staff, “goons” who exist only to aggressively manipulate and whose examples include several public relations and marketing functions, “duct tapers” who exist to fix defective or inferior processes or work produced by others, “box tickers” who exist only so that organizations can claim that they’re doing work that they are not and whose examples include many compliance functions, and finally “taskmasters” who exist only to create unnecessary work for the previous BS job types and then to ensure that it is (or isn’t) completed.  There’s little controversy in claiming that those jobs exist and are often unnecessary or even harmful, but Graeber takes it a step farther by arguing that the political-capitalist class conspires to create and maintain these jobs to pacify the masses rather than re-distributing wealth more equitably and thereby freeing people to pursue their passions.

Graeber’s argument suffers from the fatal flaw that John Hulsman terms “the promised land fallacy” in his 2018 book To Dare More Boldly: The Audacious Story of Political Risk.  That fallacy describes the human tendency to seek over-arching single theories to explain complex phenomenon.  Compounding the damage is Graeber’s scant empirical support for his argument, save the unscientific collection of blog comments and email responses to his previous article on the same topic, his lack of policy responses to the problem except for a brief discussion of a Universal Basic Income (UBI), a solution with little political or empirical support, and in the fact that the one “promised land” explanation that he chose to go with is largely untestable and ignores myriad simpler and more mundane explanations, two of which I’ll highlight below.

The first explanation has particular relevance to the “flunkie” class in Graeber’s taxonomy of BS Jobs.  Fredrick Brooks Jr.’s The Mythical Man-Month (1995) is about computer programmers but the lessons apply to diverse professions.  The genesis of the book was the observation that top computer programmers were orders of magnitude more efficient than marginal, average, or even above average programmers.  What’s more, programming often isn’t amenable to multiple programmers because of the inter-relatedness of the parts, and communication between multiple programmers adds time both for the act itself and in the training so that it can be done effectively.  The question then becomes: does a firm hire several programmers of varying quality and then try to integrate their work of varying quality—or should firms focus on hiring the best programmers and then hire support staff to make those fewer programmers as efficient and productive as possible?  The book justifiably argues for the latter, and the concept can be scaled to any profession that has the following attributes: (1) the task can’t be easily divided, such as in trading, surgery, or being a nuclear submarine captain, (2) the consequences of sub-optimal performance are high, and (3) the overall need for the task is limited.  When those conditions are met, it makes the most sense for firms focus on hiring the best performers for the primary task and then focusing the remaining workers on making those workers performing the primary task as efficient as possible.  Picking up dry cleaning, replying to email, and keeping the mint bowl full aren’t necessarily glamourous roles, but they’re not the result of a bourgeoisie conspiracy either.

The second low-hanging fruit explanation for many of the phenomenon that Graeber describes, particularly those of what he terms the “box ticker” type of BS job, is what Nobel Prize winner Herbert Simon termed “the logic of consequences” and the “logic of appropriateness,” which has been used to explain numerous sub-optimal behaviors in complex organizations and even some of the events of the Cuban Missile Crisis (Graham Allison and Philip Zelikow, Essence of Decision [1999]).  Organizations are created to perform one or more tasks.  Processes are created to perform those tasks, including interim processes to ensure those tasks are completed and to measure the degree to which those processes are or aren’t being completed satisfactorily.  Over time, those interim processes become divorced from the primary processes that they were created to help facilitate and even become the object of firms efforts, hence performance measurement and compensation schemes that measure and reward performance based on  how many reports are completed versus whatever it is that the employee and the firm are ostensibly trying to accomplish.

Smaller and less complex firms are less susceptible to the logic of appropriateness.  Management consultants–another BS Job, according to Graeber–can also be useful in identifying outmoded processes or those that have otherwise become divorced from their original purpose.  Another solution is temporary organizations that sunset after whatever they were created to accomplish is accomplished. President Ronald Reagan said that a government program is the closest thing to perpetual life on this side of heaven.  Examples abound, including the Tennessee Valley Authority (TVA), an organization created to accomplish the long-since resolved task of electrifying the Tennessee Valley, which is approaching its centennial.  The corporation is a relatively modern form of organization.  Early corporations were most often created for a single purpose, such as building a canal, and were sunsetted after the project was completed.  Deviations from a firm’s original purpose required shareholder approval.  The modern perpetual corporation, such as the industrial conglomerate GE that transformed into a financial services firm, dabbled in television, and then came to its senses and got back to manufacturing were not possible.  Given GE stock’s recent performance and demotion from its place on the Dow Jones Index, the market seems sufficient to discipline such economic misadventurism.  The same, unfortunately, can’t be said for the TVA.

Perhaps Graeber fails more simply in that he sees lives half-unfulfilled rather than the other way around.  To paraphrase Sir Winston Churchill’s description of democracy, capitalism is the worst economic system that’s ever been created—except for all the other ones that’ve been tried.  The world has done at least three controlled experiments to determine the relative efficacy of market economies versus centrally planned ones by dividing countries in two and making one economy market-based and the other centrally planned: (1) Hong Kong and the Chinese mainland, (2) East and West Germany, and (3) North and South Korea.  Graeber makes the outlandish claim that the Soviet Union’s centrally-planned economy failed “because they were never able to develop computer technology efficient enough to coordinate such large amounts of data automatically.”  Now that computing power isn’t an issue, I wonder what Graeber’s excuse for North Korea is.  Those economies aren’t immune to BS jobs either.  The Soviet Union spawned the king of all BS jobs, waiting in lines on behalf of others.  It was one of the few black market jobs to earn extra cash in the Soviet Union and given the massive shortages of everything there were ample opportunities to ply the trade.

Graeber succeeds briefly in entertaining the reader with examples of BS jobs–most of which those of us who’ve had to earn a living are already familiar with—but in terms of identifying the causes and providing solutions he falls miserably short.

Vault Series: Ted Reilly, Chicago Media Angels

CFA Society Chicago hosted its first Vault Series event of the year on July 16th featuring Chicago Media Angels (CMA) Founder and Executive Director Ted Reilly. Chicago Media Angels is an investment group seeking attractive returns through financing content in the media and entertainment industries. Reilly spoke about media as an asset class and shared interesting insights into the group’s sourcing, funding and development of such content in Chicago.

Reilly ended up in the Midwest by way of Notre Dame and began his career with Goldman Sachs Private Wealth Management where he held various positions over seven years. During this time, he discovered that his passion was helping entrepreneurs develop their businesses yet his job was convincing them to sell their companies and invest the proceeds.

Reilly left Goldman in 2011 and over the next three years produced a documentary in Uganda about a young medical student. He truly loved the experience and wanted to continue this work but didn’t know how to make a living doing so. With his interest piqued, he immersed himself in the local start up scene and joined Notre Dame’s Angel Fund, Irish Angels, in 2012 to deepen his knowledge about angel investing.

During this period he was searching for mentors when he read an article in Forbes about Steve Jobs. Following his firing from Apple, he sold his shares for $100 million. After his first $50 million investment in another tech company failed, he took his last $50 million to a small startup named Pixar, where he became a billionaire as a film producer. This proved to Reilly there was definitely money to be made in media.

A few years later he presented the notion of investing in movies to Irish Angels and when they weren’t open to the idea, he created Chicago Media Angels. Reilly shared that the biggest realization of angel investing is that you’re looking for Unicorns: Angel Investor = Unicorn Hunter! He said a lot of angel investors just keep trying to make deals work, when in fact they won’t.

There are a number of reasons movie investing is desirable. One of the biggest is the defined negative costs – once financed there isn’t a reliance on future rounds of financing. Adding to that, once a film is made, it can be monetized into perpetuity through various revenue streams. Reilly used Napoleon Dynamite as an example – it was made for $400,000 in 2004 and brought in 48 million at the box office and continues to bring in residuals to this day. In fact, a Napoleon Dynamite doll is being released this summer, some 15 years later.

Chicago Media Angels has grown to 50+ investors and is targeting 100 total. To join it requires a $2,500 annual fee and a $5,000 minimum investment in a deal(s) of your choice. Since hanging their shingle, they have received 3,500 submissions for financing and presented 30 deals to investors. The group views two times budget as an attractive valuation and invests between $250,000 and $1.2 million per deal in low budget independent films.  With the change in technology from film to digital, production costs have come way down.  They prefer movies that are as ready to produce as possible and don’t provide funding until filming starts and distribute the investment throughout filming.  Equity is split 50/50 between producers and investors, and investors receive their money back first.

The cash flow of a film breaks down as follows:

Negative Costs: 1-6 months

Marketing: 6-8 months

Recoupment: 18 months to perpetuity

  • Blue Ray and DVD
  • Theatrical
  • Foreign Release
  • Television
  • TVOD (transactional video on demand) i.e. Apple, Amazon
  • SVOD (subscription video on demand) i.e. Netflix, Hulu

Current CMA investments comprise nine equity financings including six feature films, one episodic pilot (Public Housing Unit), one web series, and one content/technology company. To date CMA Digital Studios has vetted over 300 submissions and whittled those down to five that they will be producing next year.

Reasons to join CMA include: leveraging your network/experience, participation in guest speaker series, access to 12 well-curated investment opportunities annually, full transparency, ability to allocate your own capital, and syndicated risk. Besides Reilly’s assurances of 100% guaranteed fun, there’s the opportunity to impact society – following Hunger Games, there was a 44% increase in female involvement in archery!

Following the presentation, CFA Society Chicago interviewed Reilly for its first ever podcast which will be posted on the CFA Society Chicago website in the coming weeks!

Annual Business Meeting and Networking Reception 2018

Shannon Curley, CFA, chief executive office of CFA Society Chicago, said it best during cocktails following the Annual Business Meeting, “This was by far the most engaged audience we’ve had in years with several great questions from our audience.”  Held on June 21st, the Annual Business Meeting was attended by approximately 60 members and took place at The Library, an old law-library feel conference room at the top of 190 S. LaSalle.

After a welcoming from Shannon Curley, the event started with Marie Winters, chair (2017-2018 of CFA Society Chicago, who gave an overview of the successes over the past year. To level set the scale of the Society, CFA Society Chicago continues its climb towards 5,000 members, with 4,800 members at the end of May making Chicago the sixth largest society in the world. Perhaps even more importantly, 367 members, or 7.5% of the membership base, was actively engaged on various Advisory Groups, a testament to the involvement amongst the Chicago Society members.

Over the last fiscal year ending June 30, the Society hosted over 130 events. Major highlights include the CFA Annual Dinner with over 1,000 registered attendees and 64 sponsors all actively engaged by the keynote speaker David Rubenstein, CEO and founder of the Carlyle Group after the recognition of 163 new charterholders. The Advisory Groups, or sub-committees functioning through volunteer members, also had a number of successes. The Education Advisory Group introduced a new fin-tech series with a special well-attended event discussing blockchain technologies. The Professional Development Advisory Group hosted a Starting your own RIA series and continues to grow its mentorship program.  The CFA Women’s Network hosted two events – Patricia Halper, CFA, on Factor Investing and a second event on taking control of your career.  The Social Advisory Group hosted a sold-out golf outing in Kohler, Wisconsin in partnership with the CFA Societies of Madison and Milwaukee. The Distinguished Speaker Series hosted several sold out lunches including prominent speakers such as Don Wilson, Myron Scholes, and Jeremy Grantham to name a few. Finally to wrap up the past years’ successes, the Society launched its new, mobile friendly, website used to distribute news announcements, host webinars and podcasts, and offer new ways to engage the membership base.

Tanya Williams, CFA, the secretary treasurer of CFA Society Chicago (2017-2018), shared with us the financial position of the Society over the prior fiscal year.  Overall the Society’s operating results were positive with a small operating gain primarily attributable to higher than anticipated proceeds from the Annual Dinner as a result of higher corporate sponsorship and minimal speaker fees. Alan Meder, CFA, chief risk officer at Duff and Phelps Investment Management also received an award for his dedication to the Society, which included a monetary portion of the award that he generously donated back to the Society. We then turned to Q&A where statistics surrounding female involvement in the Society was the most topical.

Currently, female membership has gone from 20% ten years ago to 12.5% today. Part of the reason of the decrease is due to the decline of women in the investment professional pipeline. With fewer women taking finance courses in their undergraduate and graduate programs, it is making it more difficult to have a more balanced gender base in the Society. To target the issue, CFA Society Chicago is actively working on making a commitment to increase female membership starting by working with the academic institutions to educate women on careers in finance. The CFA Women’s Network has also strengthened its events specifically geared towards women in the society. After Q&A, the current board introduced the new directors for the next upcoming year and recognized the outgoing leadership for all of their efforts and dedication over their prior term.

The event concluded with commentary from the incoming chair of the Society, Tom Digenan, CFA, who has served on the board for the prior two years and currently heads the US Intrinsic Value Team at UBS Asset Management. Tom shared his vision that with nearly 5,000 members and the best programs of any CFA Society in the world, it is our responsibility to carry our past successes forward and expand to an even brighter future. Tom recollected while he was studying for the CFA exam, “Make no small plans, they have no magic in them to stir men’s blood.  Make big plans; aim high in hope and work.”  CFA Society Chicago, he assured us, has no small plans. Continuing to improve membership involvement, providing the best programs and engaging with industry leaders, regulators, civil, political and local academic leaders will take the Society to the next level. An actively involved Society will make its CFA members indispensable to their employers and attract the best of the best talent to our organization.

 

CFA Society Chicago Executive Committee (2018-2019):

Chair: Thomas Digenan, CFA

Vice Chair: Dan Kastholm, CFA

Secretary/Treasurer: Kristan Rowland, CFA

Immediate Past Chair: Marie Winters, CFA

CEO: Shannon Curley, CFA

 

CFA Society Chicago Directors (2018-2019):

Jenifer Aronson, CFA Doug Laskowski, CFA Dave Smith, CFA
Michelle Beck Cosmin Lucaci, CFA Mark Toledo, CFA
William Fitzpatrick, CFA Levoyd Robinson, CFA Tanya Williams, CFA
Garrett Glawe, CFA Linda Ruegsegger, CFA
Michael Holt, CFA Dhvani Shah, CFA