On Friday, November 9th, Nicholas Center students and Director Brad Chandler traveled to Chicago to meet with several companies to learn about current trends and topics in finance. Our first stop was at the beautiful new River Point building on Lake Street, where we met with UW alums Tom McDonnell, Mike Moran, and Mark Pittman from the Allstate Investments leadership team. One topic we discussed was how, given the regulatory constraints on the underwriting side of the business, many in the insurance industry today view the business model as underwriting being the cost of capital for the investing side of the business. We also learned about how Allstate optimizes their investment portfolio through their strategic and tactical asset allocation processes. The session was very interactive, and students were able to gain valuable insights from Tom, Mike, and Mark on an array of finance topics. These topics included understanding more about the varying liquidity levels of different investments, managing the uncertainty surrounding the timing and magnitude of changes in inflation, and evaluating the forward-looking risk-return outlook for various asset classes.
Our next stop took us to Neuberger Berman’s offices on LaSalle street. We were hosted by UW alum Brad Tank, Chief Investment Officer and Global Head of Fixed Income, as well as Ashok Bhatia, Senior Portfolio Manager. Brad provided an overview of Neuberger Berman’s history and its position in the money management business today, and shared insights from his 35+ years in the industry. Students took full advantage of the opportunity to ask questions of Brad and Ashok, who shared their perspectives on a variety of topics in fixed income investing as well as financial markets broadly. Both individuals stressed the importance of a growth mindset, particularly through being avid readers; Brad commented that a favorite quote of his regarding the investments space is that 75% of the business is having a strong grasp of economic history. Neuberger Berman also kindly arranged for a session on derivative instruments with the individuals who oversee the legal and operations areas of derivatives for the firm. We received a unique glimpse into what the process of entering into a derivative contract looks like in practice. In addition, students had an opportunity to ask questions, such as how the regulatory environment differs today as compared to pre-recession. Interestingly, we learned that over-the-counter (“OTC”) derivatives are much more heavily regulated today, at a level comparable to exchange-traded derivatives, which certainly was not the case pre-recession.
Our Chicago journey continued as we visited the Federal Reserve Bank of Chicago. We participated in a presentation and Q&A session led by an economist who works as in the statistical reports analysis area of the Chicago Fed. We learned about the history of the Federal Reserve System, as well as the Chicago bank’s role as one of the twelve regional Reserve Banks that make up the nation’s central bank. Students then explored the Chicago Fed’s Money Museum. Highlights included seeing a giant cube of one million dollars worth of one dollar bills, testing our ability to identify counterfeit currency, and taking home a souvenir bag of shredded unfit currency.
The final stop of the day was at the offices of Barchart, a FinTech company that provides market data and services to the global financial, media, and commodity industries. After a tour of their offices, Barchart CEO Mark Haraburda met with us to share an overview of the company’s history and current portfolio of services. Mark answered questions on a range of topics such as cryptocurrency, Barchart’s business model, and future opportunities to leverage data in various applications in finance. It was an insightful experience to learn how a company at the intersection of finance and technology is innovating to deliver cutting-edge solutions that unlock the value of financial data.
Overall, the Chicago trip was an excellent applied learning experience. Students were able to learn from a diverse group of individuals at the forefront of various areas in finance. This real-world experience is a great example of the value of the Nicholas Center’s specialized approach to delivering a first-class finance education!