Recession provides real world lab for biz schools

Mike Sullivan has presented a task to the 25 MBA students in his investment class.

Sullivan, a finance professor at the University of St. Thomas Opus School of Business in downtown Minneapolis, asked his students to navigate their way through a few imaginary scenarios one morning recently.

"The facts are that you had $10 billion. You lost 20 percent, so you've got $8 billion."

The odd thing is, these scenarios don't sound so imaginary.

A few years ago, talk of banks collapsing or nonprofit endowments losing hundreds of millions of dollars would have been strictly in the "what if" realm of business and finance theory.

Those scenes now play out every day.

"What's going on in the world today -- in the world's economy, in the financial markets and the capital markets -- is probably the best teaching tool for someone like me," said Sullivan. "Because it's on the front page every day."

"What's going on in the world today ... is probably the best teaching tool for someone like me."

Sullivan is able to bring another layer of expertise to his teaching. He's also the chief investment officer for the University of St. Thomas.

Sullivan has plenty of stories to share about his experiences in the market as of late. He's managing St. Thomas' $500 million endowment. Well, it was $500 million this summer. Like many college endowments, it's lost tens of millions of dollars in recent months because of the problems on Wall Street.

The students in Sullivan's investment class, all in their second year of a two-year MBA program, seem to embrace the grim financial news as a learning opportunity.

Joe Schultz, 25, will graduate with his MBA in May.

"No one expected the financial world to collapse, no one expected all of these banks to be de-leveraging," said Schultz, "and to see it all happen while I'm still in school and this kind of a class has been really interesting."

Schultz isn't worried about finding a job after graduation. He doesn't have to, since he's headed to the University of Minnesota to work on a doctorate in applied economics.

Drew Kniffen, 28, from Chicago, graduates in May with an MBA and a law degree. Kniffen is concerned about the job market.

"It's a bit of an ominous world to be going into right now. It feels like the clouds are coming overhead," said Kniffen. "But we have until May, and hopefully things will sort of resolve themselves and something will show up. I'm confident that things will come back to normal."

Professor Mike Sullivan has told his students they can expect starting salaries $20,000 to $30,000 less than they would have received a few years ago, when students going into finance were earning $80,000 to $90,000 straight out of college.

"They probably have to start lower than they want to, but there are positions," said Sullivan. "There's a lot of turnover going on. They don't graduate for four or five months, they graduate in May, so we keep our fingers crossed."

These tough times could actually be a benefit to his students in the long run, Sullivan said. They can take the real world lessons they've learned in recent months and use them as they work their way up the financial ladder.

Like most of us, these students are hoping the only way to go from here -- is up.

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