our team
The PiP challenge definitely beat my expectations, in a very positive sense! The organisation was top and the way competition was run was also pretty cool and clever, with drinks and refreshments provided thorough.
Ready to start
It all started by a very nice introductory presentation by Asset Allocation Vice-President at Morgan Stanley. He gave a little talk about Asset Allocation, the tradition behind the PiP challenge, and re-iterated some of the rules. The basic idea was for a mutual fund of fictive $100'000'000 lead by our Loughborough team to be managed as an investment, with wise and sound macroeconomic investment asset allocation decisions based on simulated world news, and fundamental indicators on a simulated half-a-year basis. At each decision point, our 8 member team would discuss all new developments and allocate respective assets.
The pervasively interesting element about the game was a strong fictional storyline developed by macroeconomic experts at Morgan Stanley. The game started off with US and Europe experiencing low GDP growth and a growing competition against ASIAN economies, as ASIA was becoming a more self-sustained geographical region with increased trade and a newly established Asian Development Bank. The world started changing within the '4 simulated years' from then. Over the simulated period we saw, high inflation periods, instability in the Middle east, oil prices on the rise and fall, a small US house market bubble, accession of Turkey into the European Union, several natural disasters and many more developments, positive and negative. The task of our team, (in which we performed very well) was to position ourselves in reaction and anticipation to these events within a strategic asset allocations. The goal was not to hit tops and bottoms within a heavily traded portfolio but to take longer term investment decisions with the goal of value aggregation due to economic developments in the worlds' regions.
Throughout we kept a well diversified portfolio of assets, this can be seen in the pictures below.
Overall we came up 4th out of 12 teams. Yes, not the first place, but we weren't far away. Throughout the entire duration of the competition we were in the top 2-3 teams. The Vice-president of asset allocation and organiser of the event complimented our team in front of everybody to have been his favourite, as he believed we distributed risks well, with a sound strategy. What counts is that we generated ~30% of returns and we beat teams, such as Oxford, Manchester, Warwick, Cambridge...
Profit and Trading
Real estate was the 3rd highest earning asset after Equities and the Asian Currencies. Our frequency of trading was lower than average which also shows that next to diversification we didn't over-trade.
Finally three teams were picked to present in front of everybody in the room how and why we made our portfolio perform in the way we did. I was picked by my team-mates to take on this task, so I did and I gave a convincing little presentation.
The final standings
Our Team
Thanks to all my team-members for making this a great and fun event for all of us.
