While many investors have been hit hard by the recent turmoil on Wall Street, Georgetown’s two student investment groups have been rather lucky. Both the Georgetown Collegiate Investors and the Georgetown Student Investment Fund said they have largely avoided the consequences of the downturn thus far – in fact, profits are up.

GCI Chief Executive Officer Mark Margiotta (MSB ’09) said that part of the group’s successful investment strategy stems from their policy to steer clear from investments in the banking industry.

“We have made no bets on banks. We stay away from those investments,” he said.

Tom Hutton (MSB ’09), chief investment officer of GCI, said the organization’s biggest challenge has been deciding how to invest its profits.

“We have so much cash right now, we’re just trying to put it to work,” he said.

Founded in 1996, GCI is a student-run, legally incorporated limited liability company. The group’s market holdings exceed $60,000, most of which is invested in a stock portfolio. Members of GCI are given one vote for every $250 they contribute out of pocket; they also receive a percentage stake in the company proportionate to the amount they invest. As the company’s portfolio expands, the value of each member’s share also increases accordingly.

According to Barron’s October 2007 Top 50 Hedge Funds list, the average annual return rates of the 10 most successful hedge funds in the United States range between 37.2 percent and 47.7 percent.

In 2007, GCI saw a 48 percent return on their investments.

Hutton said that his group will, however, be investing cautiously for the next six months. “The market right now is so volatile that it’s easy to make mistakes,” he said.

For GUSIF, it’s “business as usual,” according to Howard Chang (MSB ’09), the fund’s chief executive officer.

“We were very lucky to have sold several companies from our portfolio before the summer that subsequently fell in the past few months,” GUSIF treasurer Cole Magrath (MSB ’10) added.

Formed in 1997, GUSIF is a student-run organization that currently manages over $370,000 of Georgetown’s money. It received an initial $100,000 investment from the university, another $100,000 from the Alumni Association in 2000 and an additional $50,000 investment in 2007 specifically intended for real estate investment.

Before they invest, members of GUSIF present options for different investment plans to its board of directors, which ultimately votes on the investments.

Both groups said membership has gone up considerably in recent years: When Hutton first joined in 2005, he said, there were seven GCI members as opposed to 50 now, and Chang said GUSIF’s membership is at its highest since he joined in 2005.

“I believe that students are becoming more aware of the substantial impact of financial markets on the broader economy,” Chang said.

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