B-School Life

On the MBA Trail: Interning at CalPERS


With my first year of business school over, I took a quick trip to Australia to see my fiancée (the last time I mentioned her was as my girlfriend). The break was much-needed as I was growing a little tired of life on campus and wanted to rest, see my family, and ideally start my internship reinvigorated and energized.

I had two simple goals for my internship: to learn as much as I could about institutional investing/buy-side finance and to wear every tie I owned at least once to work. The casual shorts and T-shirts of school life had sent my shirts and ties to the back of the closet where they were slowly gathering dust.

From the very beginning, my internship was eye-opening and challenging. CalPERS (California Public Employees' Retirement System), like all investment funds, was in the process of restructuring its portfolios to reduce its overall leverage and gain a better understanding of the value of underlying assets within its portfolios. This all coincided with CalPERS changing the policies and procedures for future investments, so I had an opportunity to work on both short-term and long-term strategic considerations. If ever there was a year to intern in buy-side finance, this was it.

CalPERS is incredibly supportive of its interns, and while I was the only intern in the Real Estate Portfolio, the whole team made a point of getting me involved in all the pressing decision-making meetings. For the most part, I was allowed to roam between projects that interested me and contribute where I thought I could help. This meant that some days I worked with the risk management group, understanding the risk exposure a portfolio posed on the total fund, and other times I would laboriously review portfolio performance, analyzing the financial health and value of the underlying assets. All in all, CalPERS allowed me to strengthen my knowledge in areas that interested me while broadening my understanding of the issues that institutions will face over the next several years.

supportive, collegial cultureClearly, the past year has been a stressful time for many in the finance industry, and it was no different for the staff at CalPERS, who were under intense pressure to put out the current investment fires while coming up with a strategy that will reduce the severity of future leverage issues. In times like these you really get to see what company culture is all about, and at CalPERS I saw a community that was remarkably supportive—the economic turmoil brought staffers together rather than pushing them apart.

Relating my MBA experience to my internship, I found many of my MBA classes to be relevant, even after just one year. Macroeconomics, for example, helped me visualize the key drivers that affect the investment environment, while accounting made me far more aware of what to look for when reviewing financial statements. Surprising for me was the constant reference I made to my organizational-behavior class, in that I used what I learned to analyze and critique investment partners (for better or worse) on how communication is shared, the effectiveness of their teams, and their partners' management of our assets. I never believed core classes were designed for us to remember verbatim what was taught, but I am starting to realize that they will be useful in preparing us to understand when they might be most applicable.

The internship made me more aware of the demand for portfolio and capital restructuring over the next few years. I really enjoyed working through distressed assets at CalPERS and so, as a result of my experience, I will undertake two independent studies at Haas (Haas Full-Time MBA School Profile) on restructuring and distressed-asset investing. Haas actively supports students who want to study something on their own, and it's usually no problem at all to find a willing professor for guidance.

In summary, while I failed in my tie goal after becoming too attached to a Donald Trump-style pink tie my Mom bought me, I did succeed in coming away with a wealth of experience that will serve me well for my second year of business school and beyond. The internship process is different for everyone, and the summer experiences of my peers are as diverse as our class. Some worked 100 hours a week on Wall Street, only to come away with an understanding of how to "format" better. Others found the learning curves too steep for a 10-week break. I feel my internship was a happy balance between the two.
Toby_garnder
Toby Gardner is a member of UC Berkeley's MBA Class of 2010.

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