On April 19, a team of Columbia Business School students won the first-place prize of $100,000 for their pitch of Yum China (YUMC) stock to a panel of experts led by Bill Ackman, founder and CEO of Pershing Square Capital Management LP, while another team clinched second prize — $50,000 — for their short on Smucker’s (SJM). The first-place winners were Windsor Cristobal ’18, Anji Lin ’18, and Isabella Lin ’18; second-place winners were Nick Briody ’18, Vy Huynh ’18, and Antonio Lequerica ’18.
The event marked the 10th anniversary of the Pershing Square Challenge, which was launched by Ackman in 2008. The challenge caps off a three-month competition among about 40 student teams from Columbia Business School’s Applied Security Analysis course, taught this spring by adjunct assistant professors Naveen Bhatia and Rishi Renjen. Each team is tasked with putting together a stock pitch, with Ackman selecting the top five to be presented at the Pershing Square Finals event. During the event, which Ackman hosts, a panel of judges listens to each team’s pitch and selects the winners, who receive a financial prize. The winning students then decide the amount of the prize that they wish to keep and the amount, if any, that they wish to donate to an area of their choosing within Columbia Business School.
In past years, students have donated to the Heilbrunn Center for Graham and Dodd Investing, Tamer Center for Social Enterprise, and various scholarship funds at the School, including a current-use scholarship for women interested in investing.
“The goal of the challenge is to teach Columbia Business School students about investing and philanthropy from the beginning of their careers,” said Ackman. “Successful investors inevitably earn more than they need for themselves and their families. The Pershing Square Challenge will help students prepare for a life of success and giving back to their communities.”
Bruce Greenwald, the Robert Heilbrunn Professor of Finance and Asset Management and director of the Heilbrunn Center, underscored the importance of the hands-on experience that the challenge offers would-be value investors. “Giving students the chance to apply what they’ve learned in Applied Security Analysis to a real-world investment scenario, where they are pitching their ideas to top industry practitioners, is invaluable,” he said. “It’s a once-in-a-lifetime opportunity for students to test-drive their work while gaining exposure to the field and learning first-hand about the responsibility that it brings with it.”
In fact, last year’s winners — Thais Fernandes ’16, Melody Li ’17, and Joanna Vu ’17, who were awarded $100,000 — had the opportunity to pitch their idea on CNBC’s Fast Money.
“Participating in the challenge itself is rewarding. It allowed us to work as a team; form lifelong friendships; do semester-long, in-depth research; and present to distinguished investors,” Li said at the time. “I’m particularly impressed by how strong Columbia Business School’s network in investing is. We improved and moved beyond our comfort zone each time we pitched to them. We could not have made it without all the help and advice from Professor Naveen Bhatia, alumni, and professionals affiliated with the School.”
“This incredible opportunity gives students hands-on experience in two important areas — value investing and philanthropy — thereby creating the ultimate bridge between theory and practice,” added Dean Glenn Hubbard. “We are grateful to Bill for creating this challenge and for helping to instill the next generation of value investors with both the skills needed for success and a sense of purpose and responsibility in the world around them.”