Before coming to Babson, Alex Wolf, MBA’16, worked as a CPA for more than six years. Looking for a change, he came to Babson to explore new career paths. When Wolf saw an email about graduate-assistant openings on Babson’s private equity committee (PEC), he applied, interviewing with Ted Clark, MBA’94, independent adviser and consultant, Babson trustee, and PEC member. “From the second you talk to the guy, he’s extremely inspirational,” says Wolf. “I could see we wouldn’t just be number crunching. This was a way to add real value to the campus and the future of Babson.”
Founded in 2010, the PEC needed help. With a mandate to help increase the College’s endowment, the volunteer members, consisting of a few alumni, were looking for assistance with analysis and reporting on potential investments.
The PEC already worked with two MBAs, so they brought on two more, including Wolf. “The students learn about the private market from an investment standpoint,” says Clark, “and we receive help with the research, analysis, and recommendations that we make.”
The PEC recommends which managers of private equity funds to invest with, explains Clark. “Our research and due diligence is understanding what the fund team has done in the past,” he says. “You research how well previous funds have performed. What companies did they invest in? Twitter? Facebook? Snapchat? Do we think they’re going to perform really well? You wouldn’t want to walk into that kind of investment without doing any research.”
Private equity is not a publicly regulated part of the investment world, says Clark. “There’s a lot of nuance and individuality. Investing in private equity is tricky,” he says, “but it’s growing like gangbusters.”
The MBAs help with reporting, and they investigate the private equity funds in part by meeting with the fund managers. “We want to know what’s their strategy, where are they looking to invest, what sectors, what types of companies, what’s their team like,” says Wolf. The students then meet with Clark to discuss their findings, as well as whether to invest, and, if so, how much.
The MBAs also are examining some of the biggest holdings that Babson has through the funds, says Wolf, and thinking of ways the College can potentially assist those companies. “Are there any cool, new companies we can bring to campus somehow or introduce them to one of Babson’s strategic partners to create value for the company, which would create value for the fund, which ultimately creates value for Babson,” he asks. “We’re starting to initiate those discussions.”
Even though Wolf doesn’t see himself in the private-equity industry after graduation, he says he has learned skills through his PEC work that are transferrable to any job, such as how to think critically about a company, how to ask pointed questions, and how to be direct without being too aggressive. “It’s those relationship and networking skills,” he says. “In general, just the whole private- equity world, it seemed so mysterious, and Ted has really helped to break it down so we understand what’s going on. It’s exciting to see what I’ve learned in such a short time.”
Clark has learned from the students as well, noting the different perspective they bring to their work. “These guys are in their mid- to late 20s, and they’re working in social media and technology. Some of the companies that get funded, I don’t have a clue about. They teach me a ton,” he says. “I think the most fun for me is sharing the excitement of this industry and having them learn something that they had no idea about that will shift their perspective and add value to their careers and themselves.”—Donna Coco