The strengthening of relations between ESSCA Budapest and the local business community is a key aim for the site in Hungary, with the ultimate goal of increasing the number of internships and jobs available to ESSCA students as well as development of ‘Continuing Training’ opportunities, an example of this type of development was the participation of students from ESSCA Budapest in the Morgan Stanley, Hungary ‘Portfolio in Peril 2010 University Challenge’ on the 20th April 2010. Out of the 10 teams participating this year, the team from ESSCA Budapest finished in a commendable 2nd place.
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Portfolio in Peril is a Morgan Stanley proprietary role-playing simulation exercise, in which teams are tasked with creating and managing a multi-asset investment portfolio, with the goal of maximising absolute returns over the long-term. |
Over a four-year fictional scenario, each team had the opportunity to manage the performance of the portfolio by assessing and implementing strategic asset allocations within the context of uncertain and changing market conditions.
The simulation consisted of eight decision periods (one every simulated six months), interspersed by news bulletins updating the participant teams on global and regional macro-economic and geopolitical events. During each decision period, teams were encouraged to consider such fundamental issues as:
Strategic allocation among the main asset classes available — equities, fixed income, real estate and cash — and the resulting balance between each sub-class
Optimal geographic allocations among U.S., European and Asian assets
Concentration vs. diversity of investment strategy
Risk profile of the portfolio
Sustainability of performance generation
Currency exposure / hedging strategy
The impact of world events on asset prices.
In addition to gaining a better understanding of the dynamics of asset allocation in an uncertain world, the students had the chance to hear a presentation concerning Morgan Stanley and its operations in Budapest. The students also had the opportunity to network with a number of Morgan Stanley representatives during the event, with a ‘debrief’ following the simulation to conclude. Morgan Stanley in Budapest employs approximately 600 personnel and provides support across a variety of services including Financial Control, Financial Operations, Credit Risk and Information Technology.
