You can’t build an effective investment strategy without first knowing your client…
Meet Peter Wang Hjemdahl, W’19!
CASE STUDY: You are an analyst team of recent college graduates working at an up-and-coming asset management company, Wharton Global Asset Management (WGAM). The firm currently manages a $100,000,000 portfolio that is invested across several different sectors, representing a broad range of industries and companies. The members of your analyst team hope to one day become portfolio managers who make the final investment decisions for WGAM’s portfolio.
WGAM’s portfolio manager (your team’s teacher/advisor) recently met with a potential client, Peter Wang Hjemdahl, who is looking for help in reaching some specific investment goals (which we’ll get to in a minute).
But first, let’s meet Peter. Raised in China and Norway, Peter came to the United States to attend college at the Wharton School of the University of Pennsylvania, where he co-founded rePurpose Global. After graduation he spent three years in India and is now back in the U.S., where he serves as the Chief Advocacy Officer at rePurpose Global.
“Waste is a global issue that requires a global solution.”
rePurpose Global is a large plastic–action coalition, bringing together brands, innovators, and individuals to combat the plastic–pollution crisis. To date, rePurpose Global has collaborated with people across 26 countries and more than 250 companies, including Grove Collaborative, AB InBev, Clorox, Credit Suisse, Google and Colgate. On behalf of the rePurpose coalition, the company is removing more than 14 million pounds of plastic waste from nature every year, and in doing so, positively impacting the lives of more than 10,000 marginalized waste workers and community members.
“We are living in a plastic epidemic, where there is no single solution. Now more than ever, there is a critical need for like-minded brands to come together and use their collective strength to help tackle plastic pollution head-on.“
Peter is passionate about what he considers to be our planet’s life-support system, the ocean. He contributes both professionally and personally to the vast Blue Economy. When he’s not working to restore its vibrance by removing and recycling plastic waste, he enjoys scuba diving and exploring the world’s deepest waterways and ecosystems with his partner.
Peter gathers strength from holistic health and wellness, which centers him physically, spiritually and emotionally. He works to bring mindfulness — being fully present in the moment — to every aspect of his life. Whether tackling issues that threaten the planet, sparring in the Muay Thai ring or practicing daily yoga, this awareness has helped Peter’s success.
That success has led him to also be mindful about his own wealth management and financial priorities. Peter has heard great things about the creativity and investing knowledge of WGAM’s analyst teams and is considering hiring WGAM to manage an investment portfolio of $100,000, which he hopes will help him achieve two fundamental objectives.
First, he would like to encourage other entrepreneurs. rePurpose is the recipient of several national awards, including one of Penn’s most prestigious. Peter and his co-founder Svanika Balasubramanian were recipients of the University of Pennsylvania’s 2018 President’s Engagement Prize, which helped them grow their startup. Peter, who is 25 years old, wants to pay forward the gratitude that he feels for his entrepreneurial opportunities by supporting emerging innovators.
“Without Wharton, I would have never been able to launch and scale my social enterprise.”
By the time he turns 30, Peter would like to establish a fund (money saved for a specific purpose) that would allow him to award a financial gift of $5,000 to $10,000 to a different start-up company each year. He would like to allocate 20% of his initial $100,000 investment to begin building the fund and use the interest from that investment to sustain the fund. He hopes WGAM can generate at least a $10,000 return on his initial investment by the time the fund is launched. To be clear, you must invest $20,000 now with the goal of growing this initial investment in the next five years so that Peter can continue to invest annually in promising startups.
While running and growing rePurpose is (and will continue to be) Peter’s primary focus, he does have a longer-term financial goal. Peter is a devout yogi and has a dream of bringing the practice and holistic wellness to others. His longer-term financial goal is to open a yoga and wellness center in Miami. He hopes that WGAM’s investing expertise can help make that dream possible in the next 15 years.
Peter told the portfolio manager that WGAM has 10 weeks to put together a detailed portfolio analysis proposal. Your portfolio manager recognizes that it will not be easy to land Peter as a client. To make the most convincing case to Peter, everyone on the team must contribute to ensure that WGAM creates the best proposal.
Over the next 10 weeks, your team will develop and test an investment strategy to meet Peter’s stated financial goals. Please keep in mind that Peter already has a solid retirement investment plan in place, so you need not consider this goal in your strategy. Your team will conduct a thorough analysis of industries and companies, with the goal of ensuring both long-term and a small amount of shorter-term profitability for your prospective client. You will test your investment strategy using the Wharton Investment Simulator (WInS), where you use real-world market data without risking real money.
Remember, your 10 weeks on WInS can only accurately assess the performance of investments that are made for the short-term. So, while you should test your strategy and build your stock portfolio on WInS, most of your investments should be longer-term and therefore won’t require excessive buying and selling of stocks. However, your strategy might include guidelines for certain factors that could influence your decision to sell, even in the short-term.
Your team will start out with a portfolio of $100,000 in virtual cash and will compete against other student teams from all over the world who are trying to land the same client. At the end of the 10 weeks of active trading, you must submit a proposal detailing your recommended investment strategy. As you strive to win Peter’s business, how will your team stand out against competing teams? How will you create a compelling and clever pitch to convince Peter to choose your strategy? Judges will review your final investment reports and select top teams. Those teams will be invited to present their strategies to a panel of experts.
* Teams are not permitted to contact Peter, rePurpose, or anyone else mentioned in this case study. The investment scenarios included in this case study have been embellished for the purpose of the competition.