The Harris Family Alternative Investments Program, offered by the University of Virginia’s Darden School of Business, is a pioneering educational initiative that provides MBA students with hands-on learning in private capital investing. As alternative investments like private equity and venture capital become increasingly mainstream, it’s valuable for students to understand these high-risk, high-reward areas. This article will explore the program’s approach to teaching alternative investments, the associated risks and rewards, and the outlook for aspiring private equity and VC professionals.
Immersive Experiential Learning Model
The Harris Program aims to demystify alternative investing through an immersive experiential learning model. Students manage a $10 million fund to invest in real private companies, working closely with industry experts. They learn by doing, undergoing the same rigorous due diligence and decision processes as professional investors. This real-world exposure allows them to deeply understand asset classes that have traditionally been opaque to outsiders. Students gain practical skills in sourcing deals, evaluating companies, and portfolio management while contributing to the vibrant startup ecosystem.
Risks of Alternative Investments
While private equity and venture capital can produce outsized returns, they involve substantial risks compared to traditional public market investments. First, private investing requires long holding periods to realize gains. Investments are illiquid, often lasting 5-7 years or more. The patient capital needed contrasts sharply with the liquidity of public equities. Second, there is an inherently high degree of uncertainty. Startups face high failure rates, and even later stage private firms have high variability in outcomes. Even for successful investments, accurately valuing unlisted companies is an art as much as a science. The risks of private investing demand rigorous due diligence and ongoing involvement with portfolio companies.
Potential Rewards of Alternative Investments
But with higher risk comes the potential for higher reward. Top-tier private equity and venture capital funds have historically delivered returns in excess of public market equivalents. Though past performance is no guarantee of future results, private capital allows investors to access growing companies early on, reaping outsized returns. And while concentrating investments adds risk, it also provides opportunity to significantly outperform diluted public market indices. The Harris Program’s hands-on experience with sourcing deals, conducting due diligence, and adding value to portfolio companies is great preparation for capturing the rewards of alternatives.
Future Outlook for Alternatives Professionals
The alternative investments ecosystem has seen massive growth in recent decades, and demand for talented professionals continues to rise. As institutional investors allocate more capital to private markets, they require management by specialized teams. The Harris Program’s training in practical alternative investing skills helps position graduates to launch successful careers in private equity, venture capital, and related fields. They emerge with networks in the industry and resumes demonstrating concrete investing experience – attractive assets for recruiting. With private markets poised for further growth, professionals with alternative investment expertise will have bright prospects.
The Harris Family Alternative Investments Program provides MBA students with an impactful hands-on experiential learning model for one of finance’s most opaque corners – private equity and venture capital. Participants gain practical skills and experience to understand the risks and pursue the rewards of these high-risk, high-return alternative assets. The program’s graduates emerge well-prepared for attractive career paths as alternatives professionals, as demand grows for private capital expertise.