Kellogg School team bests Wharton in finance contest

2/28/2008 - Teams from the Kellogg School dominated the winner’s circle Feb. 22 at the Wharton MBA Buyout Case Competition, placing first and third in a contest that featured nine other student groups from the nation’s top business schools.

Taking top prize was a Kellogg team that included Greg Maletsky ’09, David Stott ’09, Marcelo Castro ’08, Kevin Van Culin ’08 and Bader Alam ’09. The students were tested by both the case content and by time, being given just five hours to analyze an investment opportunity and present their assessment to a panel of judges from private equity firms.

The third-place prize was claimed by a team that included Enzo D’Angelo ’09, Evan Meagher ’09, Matt Szwarc ’09, Kapil Puri ’08 and Brad Keyworth ’09.

Sandwiched between the two Kellogg winners was a group from host school Wharton. The victory was especially sweet, given the Kellogg School’s second-place finish to Wharton at the same competition in 2007.

“It is very competitive between the schools,” Alam acknowledged. “I think we had two teams going over there looking to redeem themselves. To get first and third felt like a great success. We were very happy to represent Kellogg in such a positive way.”

“It helped to come in two teams,” Szwarc added. “We could discuss the competition beforehand, and even joke about it. We came in relaxed and focused, but ready and willing to work hard on the task.”

Representatives from Morgan Stanley Alternative Asset Management, Bear Stearns Merchant Banking and Arlington Capital sat on the judging panel.

The subject of the competition was an industrial company acquired by a private equity firm three years ago. The teams were asked to recommend whether to buy the business and to evaluate the risks and perform a financial analysis on potential returns.

The Kellogg teams recommended that the company be bought, while the Wharton students gave a thumbs-down to the opportunity. Alam believes the judges were impressed by the winning team’s ability to make the case for the investment.

“There’s a right price for any business,” Alam said. “Saying you wouldn’t buy it at all is one thing. Saying you’d buy it at a lower valuation relative to expectations is something else entirely.”

Both Alam and Szwarc credited the Kellogg School’s emphasis on teamwork as a key factor in enabling them to perform under pressure. Their tasks included sifting through an 80-page information memoranda, creating a financial model, performing a qualitative analysis and evaluating the competitive landscape — all in the space of five hours. “It felt like 20 minutes,” Alam said.

“The classroom experience at Kellogg prepares you very well to look at these decisions from a financial and strategic perspective,” he added. “The group work teaches you to work with people and get things done. It didn’t matter who did what. We all wanted to do a good job, so we were able to divide and conquer pretty quickly.”

The school’s strong showing may also owe something to recent efforts to highlight private equity within the Kellogg finance program. New course offerings, private equity and venture capital “boot camps,” talks by prominent speakers, and visits with leading private equity investors in Chicago, New York and San Francisco, as well as other activities coordinated by the Kellogg Private Equity and Venture Capital Club, have strengthened students’ skills in this area.

“Kellogg recognizes that private equity plays a vital role in the global financial markets,” said Michael Teplitsky ’08, the club’s buyouts director. “Our academic program develops a powerful toolkit for future leaders in the principal investment arena.”

The win at Wharton is the latest in a string of recent successes for Kellogg teams at finance competitions this year. Teams from Kellogg placed first at the JP Morgan M&A Challenge and at the Evergreen Investment Alpha Challenge. They also placed second at the Cornell MBA Stock Pitch Competition and at the ABI Corporate Restructuring Competition.

“These experiential learning opportunities are an excellent way for our students to test classroom theory against actual challenges that finance professionals encounter,” said Kellogg School Dean Dipak C. Jain. “Kellogg students embrace the chance to combine theory and practice, whether in their everyday efforts as they earn their MBA or during competitions with peers from other top business schools.”

Jain added that experiential learning was among the “pillars of the Kellogg School curriculum and culture.”