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Advisory Council Meeting

November 7, 2014

Administrative Housekeeping Outgoing Chair – George Seay

Incoming Chair – Bob Zlotnik,

Managing Partner, BZMZ Interests, Ltd.

Incoming Vice Chair – Kathleen Farlow,

Central Texas Managing Partner,

Deloitte

Welcome & IntroductionsBob ZlotnikChair

New Advisory Council Members

Carlos Barbosa

Senior Vice President,

Market Manager –

Commercial Banking Group

Wells Fargo

Austin, TX

Jeff Fronterhouse

Managing Partner

Riata Capital Group

Dallas, TX


Jonathan Goldman

Founder and Managing

Partner

Genesis Capital LLC

Atlanta, GA

Tim Griffy

Partner, Assurance Services

EY

Houston, TX


Andy Jacobs

President and CEO

Capstead Mortgage

Corporation

Dallas, TX

Jim McBride

Founding Partner

Blue Sage Capital

Austin, TX


Tom Melody

Executive Managing

Director/Co-Head

Jones Lang LaSalle

Houston, TX

Lawrence Pope

EVP of Administration &

Chief HR Officer

Halliburton

Houston, TX


Stanley Rosenberg

Owner

The Rosenberg Group

San Antonio, TX

Stacy Smith

Co-Founder and Managing

Partner

SCW Capital

Dallas, TX


Tom Sweet

Senior Vice President and

CFO

Dell

Austin, TX

Mike Van de Ven

Executive Vice President

and COO

Southwest Airlines Co.

Dallas, TX

Members Starting Second Term

Frank Lee

Ben Moreland

Marty Wender

New Lifetime Members Louis Baldwin

Tim Byrne

Jason Downie

Jake Foley

Brian Gladden

Charles Holley,

Jr.

John Lancaster

Ardon Moore

Shea Morenz

Jimmy Neissa

George Seay

Member Introductions

Please briefly introduce yourself

Name

Company

Location

RecognitionsTom GilliganDean

Dean’s Circle (gifts of $10,000+ between Sept. 1, 2013 – Nov. 6, 2014)

• George Rall Ackert

• John L. Adams

• Les L. Allison

• Louis G. Baldwin II

• John C. Bass

• Howard M. Berk

• Teresa D. Binning

• I. Jon Brumley

• Preston Butcher

• J. Timothy Byrne

• Peter R. Coneway

• Gary T. Crum

• Kenneth P. DeAngelis

• Jason H. Downie

• Alan W. Dreeben

• Robert D. Duncan

• Richard W. Evans

• Kathleen W. Farlow

• Richard D. Folger

• Anthony D. Forcum

• Jeff S. Fronterhouse

• Mark D. Gibson

• John C. Goff

• Robert H. Graham

• Frederick B. Hegi, Jr.

• William C. Helms

• Richard S. Hill

• Charles M. Holley, Jr.

• Joe E. Holt

• Shawn M. Hurwitz

• Andrew F. Jacobs

• Kenneth M. Jastrow II

• Gary C. Kelly

• Lance T. Loeffler

• S. Todd Maclin

• Clement L. Marcus

• John H. Massey

• J. Scott Mattei

• James D. McBride III

• Red McCombs

• Stephen A. McGaw

• Hugh E. McGee III

• John D. McStay

• Thomas J. Melody

• Niloufar K. Molavi

• Ardon E. Moore

• W. Benjamin Moreland

• James J. Mulva

• J. Marc Myers

• James M. Nakfoor

• Ray Nixon, Jr.

• William P. O'Hara

• Norma M. Petrosewicz

• Stanley D. Rosenberg

• Robert B. Rowling

• Thomas L. Ryan

• William A. Schell

• George E. Seay

• Paul K. Siegele

• Brien P. Smith

• G. Stacy Smith

• Steven M. Sterin

• Bryan D. Stolle

• John T. Stuart III

• Sam L. Susser

• Jeffrey L. Swope

• Jere W. Thompson

• Andrew Phong Vo

• Gary M. Weed

• Charles M. Wender

• Elizabeth Henke Yant

• Robert S. Zlotnik

Newly Established Endowments William C. Helms

Doctor Sallie Griffis Helms Endowed Dean's

Scholarship in Business

Richard Hill

Douglas “Doug” J. Dwyer Endowed Dean’s


Carol and Gary Kelly

Carol and Gary Kelly Endowed Dean’s Scholarship

in Business

Diana and S. Todd Maclin

Diana and S. Todd Maclin Forty Acres Scholarship

Diana and S. Todd Maclin Endowed Excellence

Fund for the BBA Program Office

Susie and John L. Adams

Susie and John L. Adams Endowed Chair in

Business

Carolyn and Preston Butcher

Carolyn and Preston Butcher Endowed Presidential


Sylvie and Gary Crum

Sylvie and Gary Crum Endowed Excellence Fund

in the Business Honors Program

Jimmie Ruth and Richard W. Evans, Jr.

Dick and Jimmie Ruth Evans Endowed Dean’s


Richard D. Folger

Warren Equipment Company Energy Management

Program Endowed Excellence Fund

Newly Established Endowments (cont.)

Beverly H. and William P. O’Hara

Accounting Centennial Endowed Presidential

Scholarship

Ashley and G. Stacy Smith

G. Stacy and Ashley Smith Endowed Excellence

Fund for the McCombs School of Business

Catherine G. and Sam L. Susser

Catherine G. and Sam L. Susser Forty Acres

Scholarship

Jere W. Thompson

Jere W. Thompson Forty Acres Scholarship

Laura and James D. McBride III

Laura and Jim McBride Endowed Dean's


Susan and Hugh E. McGee

Susie and Skip McGee Endowed Presidential


Wendy and W. Benjamin Moreland

BHP Parents Endowed Excellence Fund in the

Business Honors Program

Jan and Marc Myers

Marc and Jan Myers Endowed Presidential


Alexandra and James M. Nakfoor

Alexandra and James M. Nakfoor Endowed


John Goff

Stanley Rosenberg

McCombs Advisory Council Lifetime Leaders

Susie and John Adams

Corliss and Louis Baldwin

Virginia and Jack Blanton

Becky and Jon Brumley

Cele and John Carpenter

Sylvie and Gary Crum

Barbara and Alan Dreeben

Debra and Jack Furst

Cami and John Goff

Annie and Bob Graham

Cinda and Tom Hicks

Susie and Kenny Jastrow

Joan and Herb Kelleher

Ronya and George Kozmetsky

Libba and John Massey

Charline and Red McCombs

Ellen and John McStay

Ella and Fred Moore

Miriam and Jim Mulva

Janet and Jimmy Neissa

Denise and Ray Nixon

Beverly and Will O’Hara

Elizabeth and Charles Prothro

Sandra and Stanley Rosenberg

Rozanne and Billy Rosenthal

Terry and Bob Rowling

Ann and Jeff Swope

Marcie and Bob Zlotnik

MBA Investment FundKeith BrownProfessor, Department of Finance

Keith Brown

Sandy Leeds

Darren Anderson

Hunter Brous

The MBA Investment Fund LLCDean’s Advisory Council

November 7, 2014

• We were the first legally constituted, private investment company to be managed by university students

– Founded in 1994 to enable MBA students in the McCombs School of Business at The University of Texas at Austin to obtain a real-world experience in the process of managing investment portfolios

– Based on the premise that students will manage the assets of an actual business while faculty manages the student managers

• We manage approximately $21 million in Current Assets Under Management in three distinct portfolios

– Growth Fund: $11.9 million in equities benchmarked against the S&P 500 Growth Index

– Value Fund: $3.4 million in equities benchmarked against the S&P 500 Value Index

– Endowment Fund: $5.6 million in exchange traded funds comprising equities, fixed income, commodities, and real estate benchmarked against various indices specific to each asset class

The MBA Investment Fund LLC: An Overview

22

10/86 Initial Idea Suggested; “Tabled” by Lack of Funds

3/93 James Mulva Reinitiates Concept, Backed by Seed Capital

9/93 Organizational Luncheon in Houston

3/94 First Class of Student Managers Selected

6/94 Issued Original Offering Memorandum

12/94 Initial Closing - $1.6 million, 34 Investors

1/95 15 Student Managers Start Investing;

First Purchases: C & INTC

12/95 Closing of Secondary Offering - $875,000/Total: $3.0 million

5/96 Opening of Financial Trading & Technology Center

2/97 Expand to 20 Student Managers, IM Consultants, FAP

The MBA Investment Fund LLC: A Brief Chronology

23

9/97 Closing of Secondary Offering - $5.4 million/Total: $10.0 million, 50 Investors

12/99 Closing of $1.9 million Offering to Create UT MBA Value Fund; Original Portfolio

Transformed into Growth Fund

5/01 Creation of the UT MBA Endowment Fund: Addition of Enhanced Index & Fixed-Income Portfolios

10/03 Total AUM for 3 Fund Portfolios: $12.0 million

5/04 President & CEO of Fund Retires; Leeds controls operations


5/10 Starks Retires; Brown Becomes CEO Again

10/14 2016 Class of managers selected (22nd Fund Class)


The MBA Investment Fund LLC: A Brief Chronology (cont.)

24

1. Selections

2. Teams and Roles

3. Training / Education

4. What Makes the Fund Different

a. Business / Not a Club

b. Advisory Board

c. Advisor Meeting

d. Resources

e. Network of Fund Alumni

Fund Operations

25

Structure of the Fund

• Each student is a member of a sector team:

• Each student has a specific job function:

FinancialsReal Estate

Consumer(Discretionary &

Staples)

EnergyIndustrialsMaterialsUtilities

TechnologyCommunications

Healthcare(Indexed)

Risk Manager• Sector leader• Member of the Executive Committee• Formal interview process

Investor Relations• Maintain relationships with outside constituents

(particularly class speakers)

Economist• Monitor economic outlook• Interpret economic trends• Propose sector allocations• Publish economic reports

Trader• Execute trades• Monitor price targets• Maintain active position database

Performance Manager• Report weekly performance• Update index weightings• Create portfolio reports

Recruiting Officer• Manage recruiting process• Organize fund events

Endowment Manager• Select and manage ETFs for Endowment Fund

Administrative Officer• Coordinate communication among managers

involving daily logistics • Liaison between managers and Professor Leeds

and Dr. Brown

IT & Operations Officer• Manage Fund website and databases

26

The MBA Investment Fund LLC: Cumulative List of Managers

The MBA Investment Fund LLC: Cumulative List of Managers (cont.)

Hunter Brous

Fund Position: Risk Manager - Financials

Hometown: Fort Worth, TX

Previous Job: Corriente Advisors

Undergraduate: Southern Methodist University

Internship: Satori Alpha

Darren Anderson, CFA

Fund Position: Risk Manager - Energy

Hometown: Damascus, MD

Previous Job: The Edgar Lomax Company

Undergraduate: University of Maryland

Internship: Bares Capital Management

Fund Manger Profile

29

• Why we joined the Fund A challenging but rewarding experience

• Asset manager exposure Introductions to respected investors around the country

• Education Provides a platform for practical application of academic concepts

• Fund life Demands the professionalism and responsibility expected in the real world

• Advisor meeting Intense preparation for a truly unique experience

Fund Experience Overview

30

Undergraduate InternshipsHeidi TopracSenior Lecturer, Finance

BBA Internship ProgramMcCombs Advisory Council

Nov 7, 2014

Guidance from Bill Powers• “People learn things by doing them, then reflecting on

them.”

• “It might be possible to use technology to…wrap a

course around that [experience],” to enable students

perform exercises and reflect on their experiences as

they are going through them.”

11/11/2014

33

H TopracCampus Conversation opening remarks Feb 18, 2014

Changes in BBA Internship ProgramOld Program New Program• 7 different courses, syllabi,

websites & processes

• 8 faculty & 17 staff

• Offline course

• Journal & paper due afterinternship

• No text; limited to no guidance

• 1 course, 1 syllabus, 1 website, 1 process

• 2 faculty & 6 staff

• Online course

• Series of online exercises duringinternship, plus Internship Forum after internship

• Guided exercises from text: What Color is Your Parachute?

11/11/2014

34

H Toprac

Internship course process

Obtain approval prior to internship

Perform internship & complete online

course

Present to faculty at internship

forum

11/11/2014

35

H Toprac

Not all who apply earn course credit

769 students applied for course credit

749 (97%) received approval

733 (98%) began course

662 (90%) completed

11/11/2014

36

H Toprac

Feedback from employers• “Amazing! We will absolutely continue to recruit at

McCombs.”

• “If this is the caliber of students shaped by McCombs, we will definitely hire more students in the future.”

• “We had such an excellent experience, we will certainly be making the BBA internship program a continuing program at [our company] in the future.”

11/11/2014

37

H Toprac

Feedback from students• “[The forum] helped me put in words what I did over

the summer so I could communicate this to recruiters.”

• “These exercises really helped me figure out my career

plan. Thank you for assigning them.”

• “Reflecting on my internship and being able to pull out

the key takeaways was beneficial I'm looking

forward to talking about them in interviews now!”

11/11/2014

38

H Toprac

Break

15 minutes

Diversity at McCombs

Goals & Objectives

Interest in Topic

Moral

Political

Practical Reality &

Prudential Conduct

Texas (and the U.S.) is

a diverse culture

Employer needs

Attract talent

ON CAMPUS PROGRAMS & RECRUITING EVENTS

Under Represented Minorities

BBA McCombs Future Executive Academy

BBA Discover Yourself in Accounting Majors and Careers (DYNAMC)

BBA Subiendo: The Academy for Rising Leaders

BBA EY Accounting Ambassadors Program

BBA McCombs VIP (with UT VIP)

MBA Diversity Forum

Women MBA Women’s Forum

BBA Female Case Competition

BBA Women’s Council

Veterans MBA Military Forum

Current and Recent Sponsors

Subiendo: The Academy for Rising Leaders

Brings together H.S. students from Texas for a

unique leadership development experience

Started in 2010

380 students have been through the program

2010: 93% graduated H.S.; 89% attended college

2011: 99% graduated H.S.; 98% attended college

Since 2012: 100% graduated H.S. and attended college

2014 Academy

77% prospective first-generation college students

81% lower socio-economic households

Next Academy: June 14-18, 2015

DIVERSITY PARTNERSHIPS

Under-Represented Minorities MBA The Consortium for Graduate Studies in Management (CGSM)

MBA Management Leadership for Tomorrow (MLT)

National Society of Hispanic MBAs

National Black MBA association

EY Accounting Ambassador Program

Women MBA Forte Foundation

LGBTQ MBA Reaching Out

Veterans MBA Veterans

Military MBA

EY Accounting Ambassador Program

A commitment to the success of under-represented students in Accounting

through recruiting scholarships, professional development opportunities and

mentoring.

STUDENT ORGANIZATIONS & PROGRAMMING Under-Represented Minorities

BBA Black Business Student Association

BBA Hispanic Business Association

BBA McCombs Diversity Council

BBA/MPA Association for Latino Professionals in Fin. And Accounting

MBA Black Graduate Business Association

MBA Latin American & Hispanic MBAs

MPA National Association of Black Accountants

Women BBA Women in Business Association

MBA Graduate Women in Business

LGBTQ BBA GLBTQA Business Student Association

MBA Gay, Lesbian & Ally MBAs

Veterans MBA Armed Forces Alumni Association

“Diversity benefits all students but that is only the beginning of its benefit

to society. Preparing young people to lead in an increasingly global

civilization also pays dividends for employers, organizations,

governments, communities and everyone who is served by our

graduates as they leave the academy to make a difference in the

world.”

Bill Powers, President of The University of Texas at Austin

“SEAL training was a great equalizer. Nothing mattered but your will to

succeed. Not your color, not your ethnic background, not your

education and not your social status. If you want to change the world,

measure a person by the size of their heart, not the size of their flippers.”

Admiral William H. McRaven, Incoming UT Chancellor

School UpdateTom GilliganDean

Topics Program Performance

BBA/BHP

MPA

MBA

Other programs

MSFinance, MSIROM, MSTC

Executive Education

Business Foundations Program

Strategic Initiatives Jon Brumley Texas Venture Labs

Energy Initiative: UT Energy Poll

Health Care Initiative

Facilities Master Plan

Alumni Engagement

Staff Highlights

BBA Admissions Fall 2014

Total applications: 6,503 (LY 6,271)

Students admitted: 1,651 (LY 1,629)

Students enrolled: 887 (LY 872)

Average SAT: 1345 (LY 1342)

Average High School Rank: 7% (LY 8%)

Female: 50.8% (LY 50.5%)

Valedictorians: 46 (LY 47)

Texas residents: 88% (LY 76.6%)

Out-of-state: 7% (LY 19.8%)

International: 5% (LY 3.6%)

BHP Admissions Fall 2014


Students admitted: 244 (LY 237)

Students enrolled: 118 (LY117)

Average SAT: 1480 (LY 1482)

Average High School Rank: 2.1% (LY 2.2%)

Female: 47.5% (LY 46.8%)

Valedictorians: 46 (LY 31)

Texas residents: 86% (LY 87.8%)

Out-of-state: 10% (LY 9.7%)

International: 3% (LY 2.5%)

MPA Admissions (Traditional and I-MPA)

Fall 2014

Total applications: 784 (LY 857)

Admitted: 403 (LY 380)


Yield: 78% (LY 77%)

Female/Male: 45% / 55%

GPA: 3.68

GMAT: 660 (T-MPA)

MBA Admissions

Fall 2014



Average GMAT: 691 (LY 690)

Female: 32% (LY 26%)

Texas residents: 36% (LY 37%)

International: 24% (LY 19%)

Other Programs Masters Programs 2014-15 Enrollment

MSFinance – 40 (LY 29)

MSIROM – 54 (LY 52)

MSTC – 68 (LY 79)

Executive Education

655 program days (LY 715)

Revenue $10,931,999 (LY $11,492,400)

Served ~7,000 people

Custom programs for ~50 organizations

Open enrollments programs for more than 300 organizations

Other Programs (cont.) Business Foundations

More than 6,100 students across UT’s campus

Online courses

UT Students

Currently offering 4 of 6 courses (enrollment: 133 – 4 courses; 3 are in phase 1 pilot)

Final 2 courses offered in Spring ‘15

Non UT Students

Targeting Spring ‘15 to offer 4 of 6 courses

Remaining 2 courses targeted for Summer ’15

Summer sessions

Teaches fundamentals of business to non-McCombs student

Program is 8 weeks, 15 credits, team taught by 15 McCombs faculty members to

integrate course content

Three cohorts, 2 STEM (Halliburton supported) and 1 Health Care (new 2014), running

concurrently with over 120 students

Expect to grow to 150+ students with additional healthcare cohort in 2015

Program runs at a financial surplus in support of the BBA Program Office

Undergraduate Career Success 100% complete professional internship or

practicum

Companies recruiting on campus: 875 (full-

time jobs accepted)

Companies posting on job boards: 2,900

Average base salary at graduation: $58,049

(LY $55,606)

Average signing bonus: $6,804 (LY $6,216)

MBA Career Success Students with job offers

At graduation: 85%

By 3 months out: 96%

Average base salary: $106,277 (LY $105,112)

Average signing bonus: $24,738 (LY $23,426)

Average pre-MBA salary of entering class:

$64,993

Average time to recoup education

investment: 3.8 years

TVL Accelerator 5th Anniversary!

2010- 2014

Cumulative TVL Student Reach

236 Total Students

318 Student-Semesters

39% work at companies with <25 employees

Cumulative TVL Entrepreneur Reach

102 Total Companies

> $232M Post-TVL Funding

39% Funding Rate

4 Companies Acquired

February 2014 –Texas Venture Labs Investment Competition

Source Competing Companies

7

11

2

February 2014 – Texas Venture Labs Scholarship Competition

Total Competitors: 16Never Applied: 1

Declined: 2Waitlist: 2

Accepted: 11 Attending: 10

2013 2014

Total Competitors: 12Never Applied: 7

Declined: 2Waitlist: 3

Accepted: 5Attending: 3

Quality of student – caliber and fit with McCombs – drastically increased YOY

Energy Initiative: UT Energy Poll

Healthcare Initiative 2015 spring symposium: Engaging Patients & Families to Transform

Care – April 9-10

Working with the local health care community to enhance the

student experience

Developing programs with UMC Brackenridge, Seton Healthcare Family, and

Central Health.

Involving local health care community

More than 150 people from local health care organizations and 32 people from

several State of Texas agencies in a variety of programmatic efforts

Working with the Dell Medical School to leverage mutual synergies

that will enhance the school’s teaching, research, and service

missions

Facilities Master Plan Phase 1

Robert B. Rowling Hall

Funds raised to date = $55.1 million (as of 10/21/14)

Milestones

Submit Design Development (35%) set – April 2014

BOR approval – May 2014

Early Construction (off site utilities) – June 2014

Submittal 75% Construction Documents – August 2014

Submittal 100% Construction Documents – November 2014

Construction – December 2014

Completion – Spring 2017

Ground breaking ceremony – today at 2:00 p.m. at the corner of

Whitis and 20th Street

Facilities Master Plan Phase 2

Renovate CBA North and South to house

department faculty offices and undergraduate

program space

Jim and Miriam Mulva gift

Phase 3

Renovate GSB to house undergraduate

classrooms, team rooms and community spaces

Alumni EngagementAlumni Signature Events

Knowledge To Go (KTG) Webinars

Continue your active learning relationships with the

university through monthly one-hour webinars.

Career Webinars

Strengthen your competitive advantage in the workplace

with these monthly one-hour webinars.

Faculty Speaker Series

Discuss current business trends with faculty at your local

alumni chapter.

Economic Forecast Events

Hear exclusive economic conversations between McCombs

faculty and legendary corporate executives in Texas.

Alumni Weekend

Return to the Forty Acres to catch up with friends and learn

from faculty at this annual fall event in Austin.

Alumni Business Conference

Learn faculty perspectives on the hottest business topics at

this annual spring event in Austin.

Knowledge To Go (KTG) Webinars

Lew Spellman kicked off 2014 with his

topic on “Cyclical Forces Driving the

Economy, But Not the Stock Market”

Participation Trend – average 142 attendees

62% of alumni participation view the KTG recordings

Future Plans: featuring faculty research topics

Economic Forecast Events

Four sold out events held in Dallas,

Houston, San Antonio, and Austin

Special recognition to Daron Peschel,

BBA/MPA Alumni Advisory Board, for championing

these events at the Federal Reserve Banks

760 total McCombs/UT Alumni and guests

Economic Forecast Events cont. Notable CEO Executives/Speakers:

Dallas Houston

San Antonio Austin

Alumni Business Conference

Richard W. Fisher

President and CEO

Federal Reserve Bank

of Dallas

Alumni Giving Rates

Highlights: Development and External Relations

Exceeded UT capital campaign expectations by more than $50 million Raised $276,798,870 – goal was $225 million

Set all-time record in philanthropic support in 2013-14 ($108,916,839)

Annual giving of more than $2.5 million in 2013-14 – first college/school to exceed $2 million

Impact Rowling Hall

Mulva Hall

Endowments

Scholarships

Staff Highlights: Media Services

Conversion of Media Lab to Active

Learning Classrooms

Thanks Deloitte!

Impact

Greater flexibility for teaching and learning

Increased ability to attract high caliber students

Laboratory for testing new pedagogy

School Leadership Senior Associate Dean

Jay Hartzell, former Chair of the Finance Department

at McCombs (thank you to Paul Newman)

Chairs

Finance – Bob Parrino

Management – Jim Fredrickson (reappointed)

Marketing – Wayne Hoyer (reappointed)

Herb Kelleher Center for Entrepreneurship

Violina Rindova

Questions, comments, discussion?

Dates to Remember

Spring 2015

March 26 – Advisory Council Dinner

March 27 – Council Meeting and Spouse

Program

Thank you for attending!