Burridge news

The Future of ESG: Insights from the Burridge Center's Sustainable Finance Discussions

Jane Majkiewicz — Tue, 18 Mar 2025 15:59:23 +0000

The Future of ESG: Insights from the Burridge Center's Sustainable Finance Discussions Jane Majkiewicz Tue, 03/18/2025 - 09:59

Jane Majkiewicz 鈥� Photos by Cody Johnston

With intellectual discourse as a foundation for enhancing knowledge, the Burridge Center鈥檚 Sustainable Finance Discussions held on March 13 provided a lively platform for experts to gather and share insights on the future of ESG.

At a time of uncertainty in the world of environmental, social and governance (ESG) initiatives, the Burridge Center's Sustainable Finance Discussions offered a unique opportunity for thought leaders from academia and industry to delve into the complexities of navigating sustainability in an ever-evolving financial world.

More than 100 attendees explored topics at the intersection of finance, climate and technology under the theme of 鈥淓SG: What does the future hold?鈥�

A platform for exchange

Shaun Davies, Faculty Director of the Burridge Center

鈥淏ridging the gap between finance academics and practitioners鈥攖heory to practice鈥攃reates a powerful exchange: Our finance research faculty gain insight into the real-world challenges facing the finance industry, while practitioners benefit from the cutting-edge research emerging from the Leeds School of Business,鈥� said Shaun Davies, associate professor of Finance at Leeds and the faculty director of the Burridge Center.

鈥淭his collaboration drives innovation and ensures that research and practice evolve hand in hand,鈥� Davies said. Nourishing relationships within the Leeds ecosystem of faculty, alumni, students and business partners promotes a thriving, forward-thinking business community.

Among the attendees was Amanda Krakauer, vice president of the Evergreen Team at Bow River Capital. "I work in the private equity industry and was invited to attend the summit by a colleague and 兔子先生传媒文化作品 alum," Krakauer said.

鈥淭he discussions on evolving ESG disclosure requirements highlighted the shifting regulatory landscape, while the deep dive into how investment managers are incorporating ESG principles provided a nuanced perspective on the challenges and opportunities in sustainable investing. The event also provided a valuable opportunity to engage with students, professors and peers on the future of responsible investing,鈥� she noted.

Research insights: Green facts from green fiction

Leeds faculty Asaf Bernstein and Simona Abis shared insights from their leading research and scholarship.

Leeds Finance faculty members (left to right):
Brian Waters, Asaf Bernstein, Andrea Buffa and Simona Abis

Bernstein, an associate professor of Finance and the co-director of the Center for Research on Consumer Financial Decision Making, shared key takeaways from his one-year tenure as a senior academic advisor to the Securities and Exchange Commission. He amused the audience with anecdotes about his career trajectory, which included navigating the subprime mortgage crisis of 2008 and the 鈥渇lash crash鈥� of 2010. These experiences, he explained, helped shape his ability to assess uncertainty and risk.

While the SEC disclosure rule approved in 2024 currently hangs in the balance, Bernstein reminded attendees that 鈥淏lue Sky laws鈥濃€攕tate-level securities regulations鈥攅xisted before the SEC ruling, and they will continue to play a role in ensuring that disclosures are not misleading or false. He further emphasized that 鈥減rivate stakeholder standards and preferences always matter.鈥�

Abis, an assistant professor of Finance, provided a deep dive into ESG classification, revealing gaps between marketing claims and actual fund structures.

She, along with Assistant Professor of Finance Andrea Buffa, analyzed mutual funds using ESG terminology and found that only 20% of them truly qualify as impact funds. Their painstaking, manual review of prospectuses highlighted the inconsistencies in ESG labeling.

鈥淚t is crucial to make these distinctions to understand capital allocation preferences and the real impact ESG investments might have,鈥� she said.

Industry perspective: Risks, rewards and resilience

Following the faculty presentations, Angela Bricmont, the CFO of Denver Water, brought an industry perspective on the financial risks posed by climate change.

Angela Bricmont, CFO of Denver Water

鈥淐limate risks are absolutely playing out, and those are on top of historic underinvestment in infrastructure,鈥� Bricmont said. She emphasized that 鈥測ou can鈥檛 build anything if you don鈥檛 have water or energy,鈥� cautioning attendees that 鈥溾€� preparing for climate risk in disclosures is absolutely sound business.鈥�

Bricmont鈥檚 remarks underscored a key takeaway: The intersection of finance and sustainability requires not only compliance but also strategic adaptation for long-term resilience.

Future implications: the fate of ESG disclosures

As attendees asked questions during the Q&A session, one topic centered on the potential of XBRL (eXtensible Business Reporting Language), a framework for creating structured communications. Abis highlighted XBRL鈥檚 potential for analyzing massive amounts of data. 鈥淲hen you think about it that way 鈥� XBRL is a huge, huge help.鈥�

For Leeds alumnus Harris Cunningham (Fin鈥�24), the managing director of Boulder Angels, the ability to engage in thought-provoking discussion was what made the event especially rewarding. "It was a rare opportunity to learn about and ask questions surrounding ESG/finance research at CU. I loved the diversity of attendees, including lobbying groups, wealth managers, municipal water facilities, angel investors, students, early-stage startups and others. It made for very stimulating conversation during dinner."

Events like the Burridge Center's Sustainable Finance Discussions ensure that academia and industry remain in dialogue鈥攁dvancing knowledge, fostering collaboration and shaping next-generation leaders. Learn more about programs and events at the Burridge Center for Finance.

With intellectual discourse as a foundation for enhancing knowledge, the Burridge Center's Sustainable Finance Discussions provided a lively platform for sharing insights on the future of ESG.

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Ryan Heckman (Bus, Fin鈥�98)

Jane Majkiewicz — Wed, 12 Feb 2025 18:16:13 +0000

Ryan Heckman (Bus, Fin鈥�98) Jane Majkiewicz Wed, 02/12/2025 - 11:16

Jane Majkiewicz

By all appearances, by the time he was 40, Ryan Heckman was at the top of his game. He had been a two-time Olympic skier, earned his college degree despite setbacks and built an impressive career in private equity. But an industry conference triggered an epiphany鈥攈e realized he needed to do something with more heart. Heckman shared his story in a conversation with Leeds. Comments have been edited for length.

How did your Olympic training have an impact on your life and business?

It鈥檚 a big part of who I am. At 10, I wrote for a school paper that I wanted to be an Olympic skier and it was only six years later that I was in my first Olympics. I wasn鈥檛 very good at school or other sports, so I doubled down and leaned into something that I was good at. I went to my second Olympics when I was 18 and was ranked ninth in the world a year later. I learned to set big goals and accept small steps and required failures to attain them.

You mentioned on The Conscious Entrepreneur podcast that it was a challenge to catch up academically in college.

It was a major challenge. I was older than most of the students, and I was woefully behind academically. And I kind of lost my identity that was so attached to skiing.

Naively, I had applied to Stanford, with no GPA, no ACT, no SAT, and I got like a 鈥渃ease-and- desist鈥� order from those guys! Then I applied to CU and got denied. I was scared I had messed up my whole future in the pursuit of my Olympic dream, but my librarian advocated for me to a CU admissions director who allowed me in but on probation. While it was hard and I felt beneath the other students academically, I felt a huge sense of privilege that I even got to go to college.

Those first couple of classes I took were so discouraging. I walked past the phone booth outside of my first classroom near Varsity Pond every day, and I was so tempted to call my coach and say, 鈥楥ollege is not for me; I should go back to skiing.'

What kept you going? I imagine you have a built-in spirit of perseverance.

I did, and I still do today, but that would understate how emotionally challenging that situation was. Those first two years I was in general ed classes, and it seemed so far afield of my business goals that I chose over skiing. Imagine me going from being an Olympic athlete on television to being one of 500 students in a big auditorium and one of the dumbest kids in the class. I would say a little bit of fear motivated me; I didn鈥檛 want to fail.

Once I got into Leeds, I flourished. We had an accounting professor named Mad Dog MacFee, and it was a difficult class, but I got 100%. It was my first moment of victory. Then I graduated with a 3.98 GPA. I was summa cum laude. I was really proud of that and it gave me confidence outside of athletics.

I learned your first job offer came from a chance encounter on an airplane.

I was 16, and I rode on a flight to Zurich with a private equity investor named George Gillett. He owned Vail Resorts and other high-profile assets around the country. I talked to him the entire flight. When we got off the plane, he said, 鈥業f you graduate from college, give me a call.鈥�

I called him my senior year and he invited me to a Broncos game. He asked me how much I wanted to make. I recalled my parents saying the most they had ever made was $40,000, so I said, 鈥業鈥檇 like to make $40,000.鈥� George stuck his hand out and said, 鈥楬ow鈥檚 37,500?鈥�

And you went to work for him?

Yes. I thought I had really won the lottery because I was going to make all this money and live in Vail. It turned out that the job was with his M&A group in Atlanta.

I talk with a lot of young people who have grown up in Colorado, and I advise them to leave so they can come home and stay forever. When you鈥檙e first starting out, the geography of your job should be like number 20 on your list of criteria. You should look for where you鈥檙e going to get the most responsibility and coaching.

Interview your interviewer with a keen eye toward, 鈥楧o I respect the character of this person? Does it appear that this person really wants to invest in my development?鈥� Do well in school so that you can choose your boss vs. the other way around.

What was your career trajectory to get to Rallyday?

I was with George Gillett for five years, six years at a private equity firm in Denver and then eight years at a firm I co-founded with some of my former colleagues.

Then something funny happened when I turned 40. I was at an industry conference in Orlando, Florida. I just had my daughter. I was in this room with 2,000 white males with blue blazers, loafers and a lanyard around their neck, and I thought: I don鈥檛 know if this is who I want to be long-term. I don鈥檛 know if I want my daughter to see me in this industry. It was not the clothes but the soulless feeling that sort of felt suffocating to me. I thought there was something more noble out there for me.

Ultimately, I bought a small healthcare business in Denver with 11 employees and I applied my deal-making expertise. I had done a lot of healthcare investing, so I knew something about it. I hired an executive coach to help me with leading people, which I deployed across the whole organization. We all went on that journey together. I grew the business to 450 employees over five years.

I found the nobility I was looking for in leading people, which is the ultimate privilege. That is something very sacred. I felt like I had found my calling.

That was a bold move to buy a company.

It was a huge move. I raised no outside capital. Building a business of that size without any outside capital is very difficult. We almost missed payroll about a dozen times, but the business ended up having $14 million in profit, and I sold it for a big number and several of my direct reports became millionaires.

In retrospect, it was probably the last thing I should have done after having a daughter! But I鈥檓 very proud of it, and it inspired me to imagine Rallyday as an alternative to traditional private equity.

By having a human-centered focus, Rallyday is taking a radically different approach in the private equity industry.

We raised $150 million within six months. We had 97 meetings, and at the end, only five investors. Which means 92 people thought we were absolutely nuts.

How did you keep your spirits up?

I believed in the mission and had total confidence in the outcome. I figured it was just a matter of when, not if. Our first investment was a research organization for the pharmaceutical industry. We put $20 million into it, and we returned the entire $150 million fund we had raised in two years with that one investment.

My three partners and I have all built companies as a CEO and founder. It gives us a distinct advantage to connect with CEOs and founders on an emotional level. When things get hard, we can be a thought partner.

When you run a company and you-know-what hits the fan, for most investors that鈥檚 a moment of fear. For us, it鈥檚 a moment to rally.

How do business schools play a role in teaching these ideals?

It鈥檚 not just a business school鈥檚 responsibility to teach these things. It鈥檚 the school鈥檚 responsibility to encourage students that they need to invest in themselves.

At Rallyday, we expect our employees to invest in their heart, mind and soul, and we have a leadership program that teaches what we call 鈥榮uper skills鈥欌€攃ommon skills performed at an elite level. For example, we have a curriculum to help teach people how to listen better, lead with empathy and other 鈥榮oft鈥� skills that make the difference in the real world. Most of those skills are learned from challenging experiences that take you out of your comfort zone.

Growth happens in proportion to the discomfort you鈥檙e willing to endure.

It sounds like you鈥檙e doing remarkable things at Rallyday.

We talk a lot about what makes a company legendary. Typically, there鈥檚 scope and there鈥檚 scale. But there鈥檚 a third way to become legendary, and that鈥檚 through the quality of your craft鈥攖o do something so special that people are attached to your purpose and way of doing things at an emotional level. Herm猫s handmade products in France come to mind. They are probably a thirtieth the size of Louis Vuitton, but they command 10 times the price for the same product. It's not the brand per se, it's the craftsman identity that creates more meaning to the product.

At Rallyday, our purpose is to empower leaders to create the most value for the most people and to share in the experience of a lifetime.

We pay attention to stakeholder capitalism as opposed to shareholder capitalism鈥攕erving customers, employees, communities, suppliers and shareholders鈥攏o one group is necessarily more important than another. They work in harmony.

What are your thoughts on the rapid adoption of AI?

I highly recommend that students read the book Empire of Wealth by John Steele Gordon. It does a great job of illuminating the dozens of economic transformational periods in our history.

We're at one of those times right now. The profundity of AI is that 5-10 times the amount of capital that went into the last wave of technology is now being applied to a technology that could triple our productivity as a society.

So how do we shape the future of business in positive ways?

In some ways you could argue it's sort of 鈥榖ack to the future.鈥� What happens when everybody in America can answer the same question in a matter of seconds that used to take 10 years? That levels the playing field of knowledge, so you have to differentiate yourself.

Becoming a better human in service to making other humans better off is always going to win.

Ryan Heckman was among the panelists on the Funding Innovation Panel on Private Capital Markets hosted by the Burridge Center for Finance.

Two-time Olympic skier Ryan Heckman had an epiphany that ultimately led to the creation of Rallyday, a nontraditional private equity firm that invests in people and purpose, not just profit.

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The Burridge Center Hosts Demonstration Panel on Funding Innovation

Erik William Jeffries — Wed, 18 Dec 2024 19:55:19 +0000

The Burridge Center Hosts Demonstration Panel on Funding Innovation Erik William J鈥� Wed, 12/18/2024 - 12:55

In November, the Burridge Center for Finance hosted a demonstration panel to share different career pathways in finance with Leed students. The panel focused on Funding Innovation, where speakers discussed the impact of private capital markets on scaling start-up businesses and innovation spaces.

鈥淧rivate markets are so rarely discussed amongst students as a career option,鈥� said Cat Pham, chapter founder of Girls into VC and current finance student Leeds.

鈥淭he most valuable thing that experiential events provide for students is exposure to careers we never hear about.鈥�

Said Pham, Fin鈥�26

The panel provided examples of the breadth of career opportunities in this dynamic area of finance and the need for people with varied skill sets, strengths, personalities, and perspectives. By bringing together a robust group of eight panelists from across venture capital, private equity, and private credit, the speakers shared insights on early stage funding for start-ups all the way through exit.

Exploring Career Paths in Finance

Jeremy Held, managing director at Bow River Capital and Leeds alum, joined the event as a featured speaker giving an overview of private capital markets. He shared that, 鈥淧rivate companies are increasingly becoming the source of growth and innovation in the U.S. economy, creating massive opportunities for both investors and entrepreneurs.鈥� Held believes universities are a critical part of that ecosystem acting as 鈥渢he glue that connects new ideas and innovation to industry and investment partners that bring ideas to life.鈥�

Held appreciates the work done by the Burridge Center to host events like the career pathways panel because these opportunities help students discover and explore different options for their career they might not have otherwise. He adds that 鈥渂ringing private market funders to the campus鈥� helps to 鈥渁ugment the robust innovation dialogue at 兔子先生传媒文化作品,鈥� by adding the funding side of the equation to the entrepreneurial dialogue.

Students also heard from Steve Novakovic from CAIA Association. The Chartered Alternative Investment Analyst Association is the global professional body dedicated to alternative investment credential programs, which prepares analysts to assess investments in hedge funds, venture capital, private equity, and private credit.

Creating a Lasting Impact

Learning about which certifications and professional organizations students may pursue and join can have a lasting impact. For some students, a professional certification is a helpful post-graduation goal that supports their career, and for others, it can inspire them to tailor their studies to a part of an industry they hadn鈥檛 previously considered.

Professional organizations also boost students鈥� ability to discover new career paths, build professional connections, and grow long after they graduate from Leeds.

For students who attended the event, they had the opportunity to connect with the finance industry professionals after the panel during a networking hour hosted as part of the evening's programming.

鈥淭he Funding Innovation event was truly eye-opening regarding career opportunities. We had the opportunity to network with professionals and hear about potential internship openings at their organizations.鈥�

Shared Alex Dahm, Fin鈥�26

Industry Insights for Students

The Burridge Center strives to give students many opportunities to prepare for careers in finance and join the industry as leaders. With events like the Funding Innovation panel, the Center shares the breadth and depth of finance to inspire students, help them launch their careers, and develop a strong network for the future.

Pham, a member of the Boulder Venture Club, shared that the event helps 鈥渙pen the door to more students to find a unique career path they love. We couldn鈥檛 do this without the support of the Burridge Center.鈥�

Explore the Burridge Center

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Burridge Panel to Explore Funding Innovation

Srishti Sharma — Fri, 18 Oct 2024 17:49:26 +0000

Burridge Panel to Explore Funding Innovation Srishti Sharma Fri, 10/18/2024 - 11:49

Oct. 10, 2024

Join the Burridge Center for Finance on Thursday, Nov. 7, for Funding Innovation: Private Capital Markets. Attendees will hear about capital deployment and value creation outside of the public markets through a panel discussion with industry professionals, followed by networking.

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Green Finance Summit To Tackle Sustainability Questions

Anonymous — Thu, 01 Feb 2024 21:23:21 +0000

Green Finance Summit To Tackle Sustainability Questions Anonymous (not verified) Thu, 02/01/2024 - 14:23

The Burridge Center for Finance's annual conference is going green.

At the Green Finance Summit, happening March 14 at Folsom Field's Byron R. White Stadium Club, speakers will delve into the complexities of navigating sustainability in the ever-evolving financial world. Thought leaders from academia and the finance industry will gather to tackle questions swirling at the intersection of finance, climate and technology.

Find more event details and register to attend here.

The Burridge Center for Finance's annual conference is going green. At the Green Finance Summit, happening March 14 at Folsom Field's Byron R. White Stadium Club, speakers will delve into the complexities of navigating sustainability.

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Burridge Center Hosts Funders & Founders Event

Anonymous — Tue, 26 Sep 2023 20:45:51 +0000

Burridge Center Hosts Funders & Founders Event Anonymous (not verified) Tue, 09/26/2023 - 14:45

The Burridge Center for Finance is partnering with several other Leeds organizations to bring a panel of Funders & Founders to the Byron White Club at Folsom Field on Wednesday, Nov. 15!

Don鈥檛 miss this educational panel and chance to network with industry leaders.

The idea for this panel is to demonstrate to students the wide variety of career opportunities in the start-up space, by highlighting the roles played at a company, by equity investors, debt providers and legal counsel in the raise process. We will also dive into the primary concerns and focus of each role. Finally, the panel will spend time on talking with a Chief People Officer on hiring focuses post a raise and garner insights, valuable to students in understanding start-up culture.

The Burridge Center for Finance is partnering with several other Leeds organizations to bring a panel of Funders & Founders to the Byron White Club at Folsom Field on Wednesday, Nov. 15! Don鈥檛 miss this educational panel and chance to network with industry leaders.

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Burridge Center Welcomes New Board Members

Anonymous — Tue, 29 Aug 2023 22:17:08 +0000

Burridge Center Welcomes New Board Members Anonymous (not verified) Tue, 08/29/2023 - 16:17

Incoming members will advise on global and CFA initiatives as well as the annual Burridge Center Conference.

The Burridge Center for Finance recently added five accomplished industry professionals to its advisory board, including the first international member.

鈥淎s the Burridge Center continues to grow its network of stakeholders locally, nationally and globally, we are thrilled to welcome an impressive and diverse group of new board members this year,鈥� said Executive Director Sheila Duffy.

鈥淲e thank all of our board members, new and seasoned, for their support of the mission, values and priorities of the CU Leeds School of Business.鈥�

The Burridge Center offers experiences and programs that bring students, faculty, alumni and industry partners together to provide networking, access to industry, and a platform to recognize the thought leadership published by the finance division of Leeds and discuss current industry trends. The Burridge Board supports the center by strategically advising and working with the executive director, Burridge staff and Leeds School constituents.

Angela Bricmont鈥�, Conference Committee

Angela Bricmont is the CFO of Denver Water. She manages the financial resources of the Board of Water Commissioners, a more than 100-year-old water utility serving 1.5 million customers in the City of Denver and surrounding suburbs. Bricmont is responsible for accounting, financial planning and performance, treasury, rates, and customer care in addition to managing the retirement plan. Since joining Denver Water in 2010, she has overseen a credit rating upgrade to AAA, implementation of a new water rate structure, issuance of Green Bonds, and funding a lead line removal program at no direct cost to customers. 鈥婣ngela was appointed by the mayor to serve on the Denver Urban Renewal Authority Board, and she was appointed to serve on EPA鈥檚 Environmental Financial Advisory Board.

Lance Campbell鈥�, CFA Initiatives

Lance Campbell has over 25 years of finance and operations experience leading top professionals who support business operations, global institutional investors and corporate strategy. He is currently executive vice president and chief financial officer at Intech Investment Management LLC, an independent quantitative asset manager, and a founding partner of Intech鈥檚 parent company following a management buyout from its public-company parent in 2022. He graduated from the University of Colorado Boulder Leeds School of Business with a B.S. in Business Administration with an emphasis in Accounting. He also has earned the right to use the Chartered Financial Analyst (CFA) designation and is a member of the CFA Institute and the CFA Society of Colorado.鈥�

Ben Hart鈥�, Global Initiatives and Recruiting鈥�

Ben Hart is a partner at Adams Street Partners. Based in Singapore, Hart focuses on the development of institutional client and consultant relationships and works with other members of the investor relations team to serve the needs of Adams Street Partners鈥� clients.鈥� Hart is a member of Adams Street鈥檚 Diversity, Equity & Inclusion Committee. Prior to joining the firm, he worked at Capital Dynamics as managing director and chief operating officer of Asia, overseeing the firm鈥檚 business development efforts in Asia and North America.鈥�

Peter Stutz鈥�, CFA Initiatives

Pete Stutz has over 25 years of institutional investment industry experience as a fixed income analyst, trader and portfolio manager. He was most recently a managing director and portfolio manager at Guggenheim Partners, where he was responsible for the management of a variety of insurance company portfolios. Prior to joining Guggenheim, Stutz was a portfolio manager at Western Asset Management where he specialized in global interest rate and derivative strategies and managed inflation-linked bond portfolios.鈥� Stutz received his BS in Computer Science from the University of Illinois Urbana-Champaign and his MBA from the University of Chicago鈥檚 Booth School of Business. Pete earned Chartered Financial Analyst designation in 1996 and is currently the president of the CFA Society of Los Angeles.

Margarita Vacanti鈥�, Conference Committee

Margarita Vacanti is the senior vice president of payments for Middle Market West Region Business Development at KeyBank. She and her team of payment advisors and client managers are responsible for delivering payment solutions to over 1,300 clients across the West Region, from Alaska to Colorado. Since joining KeyBank in March 2018, Margarita has focused on driving and building more strategic engagement of payments earlier in the client prospecting process, expanding cross-selling of automation and merchant into the existing portfolio, and expanding and upskilling payments talent within the West Region.

The Burridge Center for Finance recently added five accomplished industry professionals to its advisory board, including the first international member. Incoming members will advise on global and CFA initiatives as well as the annual Burridge Center Conference.

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Model Behavior: How a Financial Theorist鈥檚 Insights Help Explain Activity in Markets

Anonymous — Thu, 06 Apr 2023 20:25:41 +0000

Model Behavior: How a Financial Theorist鈥檚 Insights Help Explain Activity in Markets Anonymous (not verified) Thu, 04/06/2023 - 14:25

Professor shares research insights in interactive talk with students during memorial lecture series鈥�.鈥�

Brian Waters explains his research interests and approach during the most recent Steven Lindstrom Pardo Memorial Finance Lecture Series talk on April 4. The series was created by the family of Pardo, an engaging and intellectually curious student who died of cancer shortly after graduating from Leeds in 2020. Below, Waters leads two students in a game to demonstrate strategy and speaks to a crowded lecture hall.

Trial by fire? Brian Waters knows all about it.

Upon finishing his economics degree from Vanderbilt University, Waters didn鈥檛 get the graduate school offers he wanted, so sought out additional experience to round out his r茅sum茅. A tip from a professor led him to the White House, where at 22 he found himself alongside some of the brightest minds in finance and economics as they confronted the worst recession since World War II.

鈥淚 went from being a student to getting thrown right into the fire鈥攊n a way that I probably should not have,鈥� Waters, an assistant professor of finance at the University of Colorado Boulder鈥檚 Leeds School of Business, said with a laugh.

Waters鈥� experience in the Council of Economic Advisors鈥攁n in-house think tank to help the president understand pressing economic issues鈥攊nvolved performing extensive financial analysis to help guide the nation鈥檚 response to the financial crisis. It also gave him focus for his academic career, which shifted to financial theory and examines contracting and the role of private information in markets.

鈥淚 try to look for those things in the market that don鈥檛 have obvious explanations, and then I write a mathematical model that explains how market participants behave in the real world,鈥� he said.

Playing game theory

His research involves some complex mathematics, but in a recent research talk with Leeds undergrads, Waters invited the audience to participate in a couple of games to better understand strategic interactions and decision-making, as well as how insider knowledge can unravel markets.

The lecture was the latest in the annual Steven Lindstrom Pardo Memorial Finance Lecture Series, which challenges faculty to make their research presentable and engaging to undergraduate business students. It鈥檚 named for Pardo (Bus鈥�20), an intellectually curious student and academic standout who died of cancer shortly after graduating. His family created the research series in the hopes of honoring Pardo鈥檚 curiosity and inspiring his love of learning in future generations of students.

Watching a room full of students compete in strategy games validated how approachable Waters鈥� work is, though he did get laughs and a few gasps when he showed students the actual mathematical model developed to validate his work on how private information can influence things like the sale of a used car鈥攅specially the value of learning within that framework.

鈥淲hen I鈥檓 selling my car, I have better information about it than the buyer does,鈥� Waters said. 鈥淏ut the value of that information really comes from how long I owned the car,鈥� which both helps the owner determine a price while acting as a signal for a buyer.

Consider home sales. If two identical homes hit the market at the same time, they should be priced roughly the same. But say one鈥檚 been lived in two decades, as opposed to two years. The owners who鈥檝e lived there 20 years, Waters said, 鈥渉ave really good information about the house. If it were a bad house, they wouldn鈥檛 have stayed so many years, and so the fact that they stayed indicates the value of the house must be good.鈥�

鈥淭he best part about being a theorist is writing something down and saying, 鈥榊es, that obviously applies to my behavior.鈥欌€�

Professor Brian Waters

His research demonstrated that home prices鈥攚hen controlled for price appreciation鈥攆ollow a U-shape that鈥檚 highest when a home sells immediately or after the owners have lived there a long time, and is lowest when it turns over quickly.

Pricing points

鈥淚f you see a house for sale after two years, you鈥檙e concerned that there鈥檚 something they learned in that time that鈥檚 driving them to sell,鈥� like flooding or bad neighbors, Waters said. That will drive down the price, 鈥渆specially if you see the home comes on the market every couple of years, in which case you can probably make a lowball offer for it.鈥�

Being able to model those agent behaviors has allowed Waters to make some interesting finds, which have been published in respected journals such as the Journal of Finance and Management Science. He has also done notable work in what he calls optimal contracting鈥攆or instance, determining the conditions under which social investors can catalyze companies to invest in greener practices, even at a loss of profit.

Just because that work is theoretical doesn鈥檛 mean it isn鈥檛 applicable. Waters drew laughs when he shared his own experience of selling his first home in Boulder after living there for two years.

鈥淭he best part about being a theorist is writing something down and saying, 鈥榊es, that obviously applies to my behavior,鈥欌€� he said.

Why Leeds Faculty and research Burridge Center

Steal Away

To better explain backward induction and unraveling, Brian Waters took a page out of Major League Baseball鈥檚 opening day. A rule change now limits pitchers to two attempts to pick off a batter attempting to steal a base; a third unsuccessful attempt by the pitcher results in a balk, which means all baserunners advance to the next base.

So runners now know pitchers are unlikely to attempt a third pickoff, meaning they鈥檙e likely to be more aggressive about steal attempts after two failed pickoffs. Knowing this, though, a pitcher is unlikely to attempt a second pickoff, because it will trigger more aggressive stealing from a runner. But: That signals to runners to be aggressive after a first pickoff attempt, since the pitcher is unlikely to throw a second pickoff.

Back and forth the strategy goes until you realize runners will be more aggressive from the start, knowing the pitcher鈥檚 attempts to pick them off are limited. Waters said you could expect a much higher probability of attempted and successful stolen bases. On opening day this year, runners succeeded 21 of 23 times they attempted to steal a base. Last year, five bases were stole on on nine attempts.

Brian Waters had students playing games to understand strategy and decision-making during the annual Pardo Memorial Finance Lecture Series.

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Silicon Valley Bank鈥檚 Collapse 鈥楨erily Reminiscent鈥� of 2008 Crisis, Leeds Experts Say

Anonymous — Tue, 14 Mar 2023 00:12:34 +0000

Silicon Valley Bank鈥檚 Collapse 鈥楨erily Reminiscent鈥� of 2008 Crisis, Leeds Experts Say Anonymous (not verified) Mon, 03/13/2023 - 18:12

We鈥檝e seen this movie before, so how could history be repeating itself so soon? A pair of thought leaders shares what went wrong.鈥�

The collapse of Silicon Valley Bank, followed by the subsequent failure of Signature Bank, has Leeds experts feeling deja vu, including (below right) professors Shaun Davies and Sanjai Bhagat.

The last time Shaun Davies saw a movie about bank failures, he was living it as a research analyst on a fixed-income trading desk at Smith Breeden.

鈥淲atching what鈥檚 happening at Silicon Valley Bank right now is bringing back all those warm fuzzy feelings of 2007 and 2008,鈥� said Davies, an associate professor of finance and research director of the Burridge Center for Finance at the Leeds School of Business. 鈥淚t鈥檚 eerily reminiscent.鈥�

Silicon Valley Bank鈥檚 failure last week, and the subsequent failure of Signature Bank, reminded Davies of his industry career, when questions were being raised about the health of Bear Stearns and its hedge funds.

鈥淲e had a lot of political figures saying the problem was contained. We had a lot of CEOs coming on the news saying everything would be OK,鈥� he said. 鈥淏eing removed from the financial crisis for nearly 15 years, we can look back and understand how everything unfolded. But in that moment, no one knew what would happen, or how bad it might get. That鈥檚 a little how I feel now.鈥�

Sanjai Bhagat, a professor of finance at Leeds, wasn鈥檛 working at trading desk when the subprime crisis unfolded, but he did write the book on the factors that contributed to it. 鈥淔inancial Crisis, Corporate Governance and Bank Capital鈥� was featured in Harvard Business Review, among others, and the subject of discussion in the U.S. Department of Treasury and the FDIC as experts and regulators worked to head off the next crisis.

Two of Bhagat鈥檚 key recommendations were ignored by Silicon Valley Bank鈥攖ighter controls on executive compensation and requiring lenders to finance more of their banks with equity capital.

鈥淰Cs and entrepreneurs cannot be allowed to say they want the upside of greater equity without having to face the downside of debt financing.鈥�

Professor Sanjai Bhagat

In the 2008 crisis, he said, 鈥淐EOs sold hundreds of millions of dollars of stock just prior to the crisis. We recommended restricting compensation, so that executives cannot sell stock or exercise options for six or 12 months after they leave the office.

鈥淏ut we saw exactly the same behavior here, with senior executives selling significant amounts of their holdings leading up to last Thursday鈥檚 announcement. The SVB board needs to explain why there were no restrictions on the sale of those stocks.鈥�

He also argued that 20 percent of banks鈥� total assets should be financed with equity capital. At 2022 year end, 5.8 percent of SVB鈥檚 assets were financed by equity capital.

鈥楢 parade of non sequiturs鈥�

鈥淏anks鈥� arguments against having more equity capital amounts to a parade of non sequiturs鈥攁rguments that are just economic nonsense,鈥� he said.

A major difference from the 2008 subprime mortgage crisis is that this time around, the Federal Reserve is actively fighting inflation. Davies pointed out that Fed Chairman Jerome Powell said last year that the agency would aggressively raise interest rates to curb inflation, a process that would be painful.

Career outlooks still strong

Shaun Davies鈥� decision to leave industry for academia at the height of the 2008 financial crisis was a long-planned move, and not the result of subprime mortgages.
鈥淚t was completely coincidental,鈥� he said.
However, he鈥檚 not surprised when finance students come up to him, as they have in the last day or so, to ask what this might mean for their futures. 鈥淚 was just teaching and a student in the quantitative finance program pulled me aside and asked about whether she鈥檇 be able to get a job,鈥� he said. 鈥淚n six months, there will be so many opportunities for a quant who can model risk. Your job prospects are probably better today than last week.鈥�
He also pointed out that new regulations for smaller and regional banks will create new employment opportunities for compliance and other experts.

鈥淵esterday鈥檚 actions鈥濃€攇uaranteeing deposits at the banks鈥斺€渨ere probably the right ones, but the U.S. government undermined the Fed鈥檚 credibility in the inflation fight. Because at the first sign of real pain, they flinched.鈥�

Furthermore, Davies said, if this becomes a long-term approach by the Fed, it will encourage excessive risk from banks, since they鈥檒l have a federal safety net for their depositors, creating potential havoc in the markets going forward.

He鈥檚 also concerned about investor psychology, especially for those with accounts at regional banks, whose stock prices have taken a beating since SVB鈥檚 news came out.

鈥淧anic can cause good banks to fail,鈥� he said. 鈥淲e don鈥檛 have much recent experience with bank runs in this country, but people are getting concerned. If you have deposits above the $250,000 FDIC threshold, you might say, 鈥榃ell, the government will insure that, but it might be safer to pull my money out.鈥� That鈥檚 a real threat to those regional banks, especially the ones with a high concentration of their deposits with just a few people and companies.鈥�

Venture investment

Another unknown in this particular crisis is the impact on venture investment. In a world of rising interest rates, it was always going to be that much tougher for startups to raise capital. Now, with an institutional advocate like SVB sidelined, 鈥測ou may see innovation stifled as it becomes harder to get capital to entrepreneurs,鈥� Davies said.

鈥淪ilicon Valley Bank had a very unique skillset. Maybe they can maintain that knowledge if they鈥檙e sold, but you may see that knowledge lost and dispersed among competitors,鈥� he said. 鈥淭here will be players who move into this space, but you鈥檙e not going to replicate the kind of expertise this bank had overnight.鈥�

But, as Bhagat pointed out, the run on SVB might be part of a larger question about how high-tech, high-growth ventures should be financed.

鈥淔inancing your high-tech, high-growth company with debt is the original sin,鈥� he said. 鈥淚 understand why founders and VCs would do it鈥攊t means they don鈥檛 have to dilute their own equity ownership in the startup. But that comes with additional risks.

鈥淰Cs and entrepreneurs cannot be allowed to say they want the upside of greater equity without having to face the downside of debt financing, because now, the U.S. taxpayer is stuck holding the bill.鈥�

[video:https://youtu.be/nFYVLnHC550]

Why Leeds Faculty and research Burridge Center

Why didn鈥檛 we learn from this movie the last time we saw it? And what do we do to prevent this from becoming a trilogy?

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Burridge Center Celebrates 25 Years of Student Impact

Anonymous — Tue, 13 Sep 2022 14:52:23 +0000

Burridge Center Celebrates 25 Years of Student Impact Anonymous (not verified) Tue, 09/13/2022 - 08:52

Years of rich connections and experiences at Burridge have altered countless student futures.

Burridge Center for Finance Program Director Matt Fleming, Associate Dean for Business & Government Relations Rich Wobbekind, Dick Burridge Jr., and Burridge Center Exectuive Director Sheila Duffy were among those who celebrated the center's 25th anniversary at a reception this fall.

For a quarter century, the Burridge Center for Finance has been connecting students to the local and global finance communities鈥攈elping students transfer classroom concepts into real-world insights. In celebration of its 25 years of impact, the Burridge Center hosted a special reception on August 29 for friends and supporters, to honor Dick Burridge, Sr., who established the center with a landmark gift in 1997 and has consistently supported Leeds over the decades.

Eight members of the Burridge family were present to celebrate all that has been accomplished since the center's inception.

鈥淚t is clear that Dick Burridge, Sr. was committed to bringing together academics, industry professionals, and students, and working hard to support Leeds,鈥� said Sheila Duffy, executive director of the center. "We can鈥檛 thank the Burridge family enough for continuing his legacy and supporting our mission.鈥�

Moving forward, Duffy plans to expand partnerships across more sectors, in order to offer a full spectrum of career opportunities for students. Also in the works is an effort to increase the number of Leeds students who are engaged with the center. Lastly, she intends to reset and relaunch the annual Burridge conference after its pandemic pause.

Fostering financial futures

The Burridge Center plays an important role in enhancing the student academic experience through experiential learning, academic research, community engagement and industry exposure. The center takes Leeds students beyond the classroom to promote thought leadership and intellectual innovation, preparing students to address the needs of the finance profession of tomorrow through programs, events and resources.

Students studying finance can participate in many programs and clubs supported by the Burridge Center, including Leeds Investment and Trading Group, Women in Finance, Investment Banking Club, Scholars in Finance, M&A and LBO Modeling Boot Camp, Personal Financial Planning track, Quantitative Finance Certificate program as well as case competitions and finance career treks.

Duffy has made it her mission to be a voice for young professionals. 鈥淚 love the energy and creativity of people who are just starting their journey, and I enjoy finding ways to help them feel supported in understanding their skills and how they fit into finance,鈥� she said.

She stressed the importance of building connections between Leeds and our industry partners. 鈥淲e鈥檙e literally building their talent pipeline, so we want to keep our partners close as we figure out how to best meet their needs for the future,鈥� she said.

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