The effects of the recent Wall Street crash that drove Lehman Brothers to its historic bankruptcy have reached the Darden School of Business’ student-managed capital funds. Some of the Darden Capital Management’s investments, a student-run club, had Lehman Brothers as their broker. Bloomberg.com reported earlier this month that Darden Capital Management had about $6 million stranded in four funds.
“Darden Capital Management has other investments available to trade,” says Ken White, Darden’s vice president of communication and marketing, in an e-mailed statement. He disputes the accuracy of Bloomberg.com’s assertion that the funds are stranded. “Regarding the investments involved in the Lehman situation, we are working on retrieving them with assistance from our current prime broker, with Lehman contacts, Darden alumni, and others. The students are learning that this is a unique and amazing situation that requires a particular way of thinking with a particular set of skills.”
In 1990, the Trustees designated $250,000 from the Foundation’s endowment for Darden students to use as a way to learn how to manage investments first-hand. Currently, the assets being managed by students have reached $6.2 million divided into four funds: Monticello, Darden, Jefferson and Cavalier. According to the club’s website, the fund has grown to be one of the largest of its kind in the U.S.
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