W&L Students Form New Investment Society

W&L Students Form New Investment Society
The Sustainable Innovation Investment Society aims to focus on long-term investing.

(SIIS logo | SOURCE: Sustainable Innovation Investment Society)

Two Washington and Lee students are working to create the Sustainable Innovation Investment Society, a novel W&L investment group with the goal of training students to identify companies with high potential for long-term growth.

Building upon the foundation created by the Williams Investment Society and similar groups, they hope to manage a portion of the W&L endowment and give students experience in fund management.

Grace Rustay ‘27 and Ryman Smith ‘27, the founders, sat down with The Spectator to discuss their vision and objectives for the organization.

At its core, the goal is to “give students the opportunity to learn about valuation metrics for companies that are sustainable and innovative,” Smith, an Accounting and Economics double major, told The Spectator.

The founders believe there to be a significant appetite for students who know how to value innovative companies with a specific focus on technology and management strategies. With this goal in mind, they plan to develop a curriculum and teach students this highly marketable skill.

Rustay remarked that “A lot of people that are hired” into the world of finance “go into this process blind with limited exposure to sustainable investing.”

Existing investment groups, such as the Williams Investment Society, focus on large companies with extremely high valuations. According to Smith, the Sustainable Innovation Investment Society aims to create a niche with smaller companies in the $500 million to $50 billion valuation range.

The group also hopes to explore how to better predict companies' growth rates using nontraditional metrics. “One of the biggest problems in the market right now is that it's essentially a sprint to the next quarterly reporting deadline,” Smith told The Spectator. “We’re trying to find companies that do something that is innovative, that is different from market practices [and] has the real ability to have a long-term focus.”

Smith and Rustay also noted that while environmental technology groups have the potential to match their investment criteria, the group's aims are educational and financial rather than political, differing from ESG investing.

“The goal of this is not to celebrate environmentally sustainable companies at the expense of profit,” Rustay, a Global Politics and Environmental Studies major, said. “The true thing that moves the needle,” she continued, “is profitability. Morality does not work to get people to care about the environment.”

“Profit speaks louder than politics,” she argued, adding, “This kind of fund and this kind of investing can be very, very profitable if you do it correctly.”

Regarding engagement, Rustay noted that the group has 30 interested students and roughly a dozen Economics Department faculty who have expressed excitement about the new group. Over fifteen W&L alumni have shown interest in joining the advisory board.

She also emphasized that the group is open to all majors. STEM students in particular may be helpful for identifying the viability of emerging technologies.

When asked about the feasibility of managing a portion of the endowment, the two founders seemed optimistic. “The portion of the endowment is to give us some skin in the game and experience with real money,” Smith commented.

W&L’s endowment, estimated to be worth around two billion dollars, annually contributes “about 40%” of W&L’s total operating budget according to W&L Vice President of Finance Steve McAllister. The relatively new Diversified Capital Group gives the founders a roadmap for a newly-founded group being allowed to manage a portion of the endowment.

“This is the coolest new tool we can add to the toolkit,” Rustay concluded. By focusing on these emerging areas, they believe W&L can teach their students to be ‘not unmindful of the future’ and adapt to the modern finance ecosystem.