Student-managed investment funds are launching pads for future financial leaders. As some of the most impactful educational initiatives, they allow students to work with real capital, make decisions based on their analysis, and navigate financial market highs and lows. They offer a rare chance to gain real-world investment and management skills—making them a unique resource for universities.
What is an endowment fund?
An endowment fund is a pool of assets held by an institution, often a university or non-profit, to generate income for long-term initiatives, like scholarships, research and academic programs. Unlike a traditional investment fund, where the main goal is maximizing returns, an endowment fund focuses on generating steady income over time. Endowment funds are designed to grow sustainably, with a portion of annual returns reinvested to ensure the fund’s longevity.
Inside the EDEN Fund
Did you know that the first student-managed investment fund in Spain was created at IE University? The EDEN Fund was founded by ambitious students with a clear vision. It is setting new standards in Spain by offering students real investment experience while actually contributing to a good cause. To get a closer look, we spoke with Edoardo Nicotra, a fifth-year Bachelor in Business Administration & Laws student and the EDEN Fund’s president.
Tell us a bit about the EDEN Fund and your role as president
The EDEN Fund is a team effort. We have about 35 students, organized into four teams. Macro and Stocks make up the Investment team, led by our CIO, Nicola Zuici. Then, we have a Donor Relations team that keeps our supporters updated and helps bring in funding, and a Marketing team to keep EDEN visible and connected with the community. Lastly, our Leadership team includes human resources, the president (that’s me), the vice president and the CIO.
As president, I’m really just a representative. Everyone plays an important role in making EDEN what it is, and our success is the result of everyone’s contributions.
How did the EDEN Fund get started?
It started in Segovia with the IE Investment Club, created back in 2019. I was a first-year student when I joined, and we were all excited about the idea of starting a student-managed investment fund.
We managed virtual funds at first, simulating investments and tracking everything through Excel. It wasn’t until November 2023 that we began to handle real assets. We’re about to complete our first year with actual funds under management, and we’ve raised €12,000 so far.
What inspired its creation?
We wanted a way to gain practical investment experience and do something meaningful for future students. We were inspired by similar funds at U.S. universities and thought, ‘Why not bring this concept to IE?’ EDEN was built to help students learn by actively managing funds and, eventually, to support scholarships that would give more students opportunities here at IE University.
How EDEN operates
As an endowment fund, EDEN’s goal goes beyond maximizing profits. All donations stay within EDEN, and returns are reinvested back into the fund to support scholarships.
We follow a strategy inspired by Ray Dalio’s principles, balancing our portfolio between stability and growth. Sixty percent of our portfolio is in long-term bonds and other fixed assets that don’t require constant management, providing a stable base. The remaining forty percent is split between the Macro team, which focuses on ETFs and financial assets, and the Stocks team, which takes on more risk by investing in carefully researched companies.
The Stocks team pitches their investments to a supervisory board made up of IE University professors, who evaluate and approve investment decisions. After all, it’s about creating a sustainable source of financial support that grows over time and benefits future generations of students.
Are you a part of the IE Foundation?
Yes, EDEN is part of the IE Foundation. They provide us with funds to manage, and we keep them updated on our progress. Their support is invaluable—they’ve given us financial backing, and they’re always there to offer guidance. This has been crucial to building EDEN and making it impactful.
Tell us about an obstacle you’ve had to overcome
The biggest obstacle was the regulatory issue. In Spain, opening an investment fund requires certain certifications and exams, which we, as students, didn’t have. To navigate this, we positioned EDEN as part of the IE Foundation. This solution allows us to manage real assets under the foundation’s oversight, making EDEN both legally compliant and effective.
How does one join?
We recruit at the end of each academic year, aiming to bring in first- and second-year students who will ideally stay on for multiple years. That way, they get the full experience and can even grow into leadership roles.
The selection process is structured. First, candidates undergo training tailored to their preferred team. Then, they have a final interview with the head of their department. The process can be quite technical for investment roles in Macro and Stocks, while Donor Relations and Marketing are more focused on interpersonal skills. We want committed students who are eager to learn and contribute meaningfully to EDEN.
With just under a year of real fund management, the EDEN Fund is proving to be a transformative experience for our students. Through their work, they are not only gaining valuable skills but also creating a legacy that will support future generations of students at IE University. If you’d like to contribute to this pioneering initiative and support future scholarships, consider donating to the EDEN Fund. Your generosity will help shape the next generation of leaders and innovators.