Future financial managers, this is one interview of an expert from Great Lakes you should read
How do you see the role of experiential learning, such as managing actual funds, in bridging the gap between theoretical knowledge and real-world financial expertise for future managers?
Developing management competencies for the future requires the right blend of knowledge, practical application, and personal development as part of the overall learning experience. The case method of teaching enhances this experience by adding complexity, while simulation-based learning makes the context more interactive.
However, these pedagogies still fall short of providing students with a real-life experience of VUCA (Volatility, Uncertainty, Complexity, and Ambiguity). The traditional approach of apprenticeship takes learning from the stages of knowing and doing to the final stage of being.
This evolution — from acquiring knowledge, to applying it in controlled settings, to embedding it until it becomes second nature — represents the true progression of learning.
The challenge lies in replicating this apprenticeship-like experience within the formal educational context.
Can you elaborate on how management institutes can effectively integrate 'on-the-ground' applications, like live fund management, within their existing finance curricula? What challenges might they face in this integration?
Learning about Valuation of Securities and Portfolio Management in a classroom is one thing, but implementing those lessons is an entirely different experience. While a standard Investment Management course teaches the nuances of stock selection and portfolio management, hands-on experience in managing the entire process elevates the learning to the next level.
In this course, a corpus of ten lakh rupees is provided to a select group of students for a period of nine months. This live fund management experience, integrated as a nine-month course, effectively combines the elements of knowing, doing, and being.
Managing an actual investment corpus (as opposed to an imaginary/notional investment) requires students to confront various biases in real-time.
The extended nine-month duration, compared to shorter courses, ensures that students navigate the market through a range of major events — earnings announcements, budgets, monetary policy updates, and other expected and unexpected shocks.
A key challenge is timing this nine-month window appropriately within the two-year programme. The student cohort is selected at the end of their first year and just before they leave for their summer internships, allowing a 2.5-month planning period.
During this time, each team can interact with faculty, iteratively refine their investment ideas, seek input from industry mentors, and hold internal meetings to assess and adjust their approach.
This period serves as an excellent preparation window before they fully engage in their final investments.
How crucial is mentorship from seasoned fund managers in the development of future financial leaders? Can you provide examples of how such mentorship has impacted students in your programmes?
Mentorship from seasoned fund managers is not merely beneficial — it is crucial for developing the next generation of financial leaders. These experienced mentors bridge the gap between theory and practice, guiding mentees through complex market scenarios and refining their analytical and strategic decision-making abilities.
Our observations indicate that the most valuable lessons from these interactions often come from understanding the "do-nots". For example, mentors provide crucial insights on sectors to avoid, recognising red flags like companies with poor governance or those engaged in questionable earnings management practices.
Additionally, mentorship often opens doors to valuable networking opportunities, helping mentees build essential industry connections.
Ultimately, the impact of mentorship is both profound and enduring, shaping the professional paths of future financial leaders and equipping them with the skills needed to thrive in a competitive and ever-evolving industry.
In the context of real-world financial management, how do you ensure that students are adequately trained in risk management strategies? What role does 'skin-in-the-game' play in this training?
The guidance and feedback from mentors enable mentees to take calculated risks and make informed decisions, drawing on the mentors’ own experiences in managing risks.
These discussions often cover topics such as sectoral caps, individual stock limits, filtering criteria, governance and earnings management red flags, and multi-cap strategies.
The live fund management course is designed with a principal-protection structure, ensuring that the initial investment of ten lakhs must be returned to the school after liquidation.
Any profit or loss generated during this period belongs to the students, giving them a meaningful stake in the outcome and ensuring they have adequate 'skin in the game.'
What metrics or evaluation methods do you believe are most effective in assessing the financial expertise of students managing real funds? How do these evaluations contribute to their learning experience?
For this nine-month immersive course in live fund management, the evaluation metrics reflect the students' learning progress over time. Assessment includes both continuous and terminal components.
Thirty percent of the overall score is based on the actual risk-adjusted performance of the portfolio over the nine-month period. Another thirty percent is derived from their research reports, bi-weekly internal presentations, weekly reflection notes, and participation in the mentor interaction series. The final forty percent is awarded based on their final report, presentation, and viva-voce with an industry panel.
These evaluation metrics are designed to capture the evolution of the students' overall thinking throughout the cours
How do you incorporate sector research and security selection into your programmes? What are some best practices you teach students to prepare them for real-world financial decision-making?
As part of their bi-monthly report submission, students are required to detail their stock selection process, including valuation, and explain their portfolio management decisions, such as asset weightings, hold/exit strategies, and whether they opted to rebalance the portfolio.
Additionally, their weekly reflection notes on portfolio actions (or inactions), how they handled internal disagreements, and other decision-making processes provide valuable insights into their overall thinking and learning.
The periodic engagement with fund managers is also designed to offer insights into best practices and allows teams to seek specific feedback on their portfolios.
These elements are all structured to ensure that students are well-prepared to manage funds in the real world immediately upon graduation.
What future trends do you foresee in the education of financial managers, and how are management institutes adapting to these trends to stay relevant and effective?
Future trends in the education of financial managers will be influenced by technological advancements, changing industry needs, and shifts in educational methodologies.
Key trends include the integration of technology such as AI and data analytics for decision-making, a heightened focus on ESG (Environmental, Social, and Governance) standards, industry-driven evaluation methods that use real-world situations in addition to traditional knowledge and skills assessments, and the promotion of a mindset centered on lifelong learning and continuous improvement.
