Haas NewsWire

Haas NewsWire, May 17, 2004

Google's Eric Schmidt to Address 730+ Graduates at Haas School Commencement
Lester Center to Head New Research Initiative on Entrepreneurship
Berkeley Team Wins Low-Income Real Estate Challenge
Gauging the Recovery: Attend the Ninth Annual Fisher Center Real Estate Conference
O'Brien Honored for Innovations in Investment Profession
Collin-Dufresne Develops Better Methods to Manage Risk
Diversity Committee Publishes Survey Results
Financial Times Ranks Center for Executive Development #20 in the US
Business Forecast Luncheon to Focus on Digital Entertainment, June 16
First-Year MBA Student Consulting Projects Span the Globe
Second Annual Haaski Open a Smashing Success
Haas NewsWire's Summer Publication Schedule Set
Haas in the News
Happening at Haas

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Eric Schmidt
Eric Schmidt

Google's Eric Schmidt to Address 730+ Graduates at Haas School Commencement

Google CEO Eric Schmidt will deliver the address for the Haas School's class of 2004 at the Commencement Ceremony on Sunday, May 23, at 7:00 p.m. in the Greek Theater

This year, the reception will precede the commencement program and conferring of degrees. The reception will take place on the Campanile Esplanade at 4:30 p.m. to 6:00 p.m.

Schmidt will speak to more than 730 students being awarded degrees in the ceremony. Students will be recognized from the school's Undergraduate Program (350 graduates), Full-time MBA Program (225 graduates), Evening & Weekend MBA Program (91 graduates), Berkeley-Columbia Executive MBA Program (60 graduates), and Ph.D. Program (11 graduates). While the full class of Berkeley-Columbia students took part in separate graduation ceremonies in December 2003, they are also invited to participate in the June commencement.

Several of the programs have named a top student from their respective graduating classes. The Department Citation winner in for the Undergraduate Program is Jay Bharadwa. Sankar Ram Sundaresan received the academic achievement award from the Evening and Weekend MBA Program and Gideon Granville received the academic achievement award from the Full-time MBA Program. Alice Quinn was awarded the Executive MBA Distinguished Service Award from the Berkeley-Columbia Executive MBA program. A full list of award winners will appear in the commencement program.

The student speakers at this year's commencement are Jennifer P. Cunanan (Undergraduate Program); Tina Maree Herrera (Evening & Weekend MBA Program); and Christopher Daniel Mucha (Full-time MBA Program).

Dean Tom Campbell will preside over the ceremony.

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Lester Center to Head New Research Initiative on Entrepreneurship

Professor John Freeman and The Lester Center for Entrepreneurship & Innovation have received a $600,000 two-year grant from the Ewing Marion Kauffman Foundation to investigate the causes and consequences of entrepreneurship in the United States.

Led by Freeman, research director of the Lester Center, the "Causes and Consequences of Entrepreneurship in the United States" project will support the research of faculty and doctoral candidates across various departments at UC Berkeley. The grant will support the first two years of a project that could be extended to four years with funding expected to total $1.2 million.

Researchers will be examining the effects of entrepreneurial activity on a broad array of areas, including job creation and destruction, the impact on the broader pool of "stakeholders" beyond the founders themselves, and the differing processes through which companies are started and developed.

"We are especially thrilled by this opportunity as it gives us the means to challenge faculty across campus to focus on the importance and relevance of entrepreneurship to their own areas of research interest," said Jerome Engel, executive director of the Lester Center. "This campus-wide research collaboration will bring a unique, academically powerful spotlight on the broad social and financial impact of entrepreneurship. We are fortunate to have someone of John Freeman's caliber to lead this effort."

The Ewing Marion Kauffman Foundation encourages entrepreneurship across America and improves the education of children and youth. The foundation focuses its operations and grant-making on two areas: entrepreneurship and education.

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Berkeley Team Wins Low-Income Real Estate Challenge

The UC Berkeley team has won the Bank of America Low-Income Housing Challenge for its proposal of a mixed residential ownership/rental development at an urban infill site in Richmond.

The Bank of America Challenge, which took place Friday, May 14, brought together multidisciplinary teams from four west coast graduate schools. Each school competed to propose the best affordable housing project by identifying a viable site, partnering with a nonprofit developer, gaining community support, and creating the design, financing, and marketing plans. A panel of industry professionals judged each of the presentations for innovation, quality of design, and feasibility.

The members of the Berkeley Housing Team are Eric Cress, MBA 04; Andrea Ursillo, MBA 04; Alex Waterbury, MBA 05; Marcus Deiderich, Department of Planning 04; Melissa Ohsfeldt, Planning 04; and Dara Douraghi, Architecture 05.

The UC Berkeley team created Shields-Reid Village, a mixed ownership/rental development in north Richmond. Developed in partnership with Rubicon Programs. The John Stewart Company, and the North Richmond Community Housing Development Corporation, the four-acre site would hold 46 homes for sale (with 20 priced below market) and 49 rental units (with 17 designated for formerly homeless families with at least one disabled member).

"Our proposal provides affordability for both owners and renters, revitalizes an underutilized infill site, and uses off-site manufactured construction and green building practices," says Andrea Ursillo.

The team was sponsored by Elizabeth Tracey at Bank of America in San Francisco. Robert Edelstein served as the faculty advisor.

NAIOP Real Estate Challenge Announces Results: Another UC Berkeley team took part in the annual National Association of Industrial and Office Properties (NAIOP) Challenge against Stanford University. Stanford won this year, but the Berkeley is still up by three. In fifteen years of competitions between Stanford and Berkeley, the record now stands at nine victories for Berkeley, six for Stanford. The members of this year's Berkeley team were Catherine Bedford, MBA 05; Jeanine Kranitz, MBA 04; Bruce Ou, M.Arch. 05; Eric Poretsky, MBA 05; and John Renner Jr., MCP 05. The NAIOP advisor was Steve Chamberlin and Nancy Wallace served as the faculty sponsor.

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Gauging the Recovery: Attend the Ninth Annual Fisher Center Real Estate Conference

"Assessing the Economic and Real Estate Recovery" is the theme of the ninth annual Fisher Center for Real Estate and Urban Economics Conference on May 18, 2004, from 8:00 a.m. to 4:30 p.m. at the Hilton Hotel and Towers in San Francisco.

Leading experts will share their ideas about the complexities of today's real estate business and how the industry will be affected by the challenges of an ever-changing economy. Real estate development Professor Robert Edelstein is the conference chairman. California State Professor of Real Estate Kenneth Rosen will give his annual economic forecast.

The session topics are:

Registration is $425 per person. For more information, contact the Haas Real Estate Group or FCREUE at 510-643-6105 or creue@haas.berkeley.edu.

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O'Brien Honored for Innovations in Investment Profession

The man who invented the Wilshire 5000 index and helped launch the Haas School's Master's in Financial Engineering Program, John O'Brien, received the 2004 Matthew R. McArthur Award by the Investment Management Consultants Association (IMCA) at its annual conference in Boca Raton, Florida, on April 25.

IMCA recognized O'Brien for his outstanding contributions to the investment consulting profession, including the Wilshire 5000 index, investment policy analysis, asset/liability management, and risk-adjusted performance measurement.

In 1969, O'Brien established the first pension consulting activity based on modern portfolio theory. Prior to O'Brien's innovations, the industry had relied solely on peer-group rate of return comparisons.

In 1972, O'Brien opened his own consultancy, O'Brien Associates, to further develop modern portfolio theory applications for institutional asset managers and pension funds. In 1973, he introduced the O'Brien 5000 index, which was later renamed the Wilshire 5000 after O'Brien sold the business and its name was changed to Wilshire Associates. The Wilshire 5000 is the largest and only comprehensive index tracking the performance of all publicly traded stocks in the US, now worth about $10,275,000,000,000. Changes in the index directly measure the change in market value of all US stocks.

In 1980, O'Brien teamed with Haas professors Hayne Leland and Mark Rubinstein to form Leland O'Brien Rubinstein Associates (LOR). LOR is credited with many innovations, including "portfolio insurance," options-based asset/liability hedging, and the first exchange-traded index fund.

In 1987, Fortune magazine listed Leland, O'Brien, and Rubinstein among its "Men of the Year."

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Collin-Dufresne Develops Better Methods to Manage Risk

Associate Professor Pierre Collin-Dufresne, who joined the Haas School's Finance Group in January 2004, seeks to offer economic explanations and alternative models that can be used by financial institutions to price and hedge such contracts more effectively.

With the growing internationalization of trade and the integration of financial markets has come greater risk in areas such as foreign exchange, interest rates, and commodity prices. To help firms hedge - that is, lessen -- their exposures to risks, financial markets offer specially designed "insurance" contracts known as derivatives. As the derivative markets have grown in recent years in the range of trillions of dollars, financial economists have become especially interested in how derivative contracts should be priced, but have discovered that market prices do not quite conform to the insights of established theories.

Collin-Dufresne's two main lines of research concern fixed-income securities and credit derivatives. He examines, for example, how the pricing of caps (contracts that protect an investor from paying interest beyond a certain percentage on things like loans) compares to that of swaps (contracts that allow an investor to switch from paying interest at a fixed rate on things like mortgages to paying a floating interest rate when such rates are lower). "Cap prices actually prove to be more volatile than standard theory would predict, and in ways that seem inconsistent with movements in swap rates," Collin-Dufresne says.

He and Robert Goldstein of the University of Washington in Saint Louis have developed what they call an unspanned stochastic volatility model that shows that the greater cap-price volatility may, in fact, be perfectly consistent with dynamic asset pricing theory once real-world factors are taken into account. "We provide a statistical method that a bank can use to set prices for these contracts that is more consistent with the data," he says. "This should allow them to do hedging and pricing in a more efficient way."

Looking at bond prices for firms with varying degrees of default risk, Collin-Dufresne has similarly found that basic option pricing theory does not accurately reflect market behavior. "Corporate bonds, for example, trade at much lower prices than theory predicts," he says. "My model tries to account for factors such as the possibility that firms are changing their capital structure, which allows them to change their risk level. This, in turn, affects the prices of their bonds."

Collin-Dufresne also studies "contagion risk" -- the tendency of one firm's bankruptcy to affect the default risk of other firms in a kind of domino effect. When such events occur, he has found, the spread between the cost of risky and risk-free bonds becomes larger as the bonds of suspect firms suddenly become less attractive investments. Recently, he has been exploring the derivatives markets for commodities such as oil, gold, silver, and copper.

Collin-Dufresne, who holds a Ph.D. from the HEC School of Management in Paris, has been a faculty member at Carnegie Mellon's Graduate School of Industrial Administration. He is a research associate on the National Bureau of Economic Research, an associate editor of the Review of Financial Studies, and serves on the advisory research board of Moody's. He recently was awarded the Cheit Teaching award by the Ph.D. students at UC Berkeley for the course in Dynamic Asset Pricing.

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Diversity Committee Publishes Survey Results

The Haas School's Standing Committee on Diversity has assembled the results of its fall 2003 survey of alumni, faculty, students, and staff about student diversity issues at the school.

The 25% survey response rate clearly demonstrates that the Haas community cares deeply about this issue, said the committee, which was appointed by Dean Tom Campbell in May 2003 and represents a cross-section of Haas students, staff, and alumni.

Among the key findings, the majority of respondents felt that Haas values diversity and provides a welcoming environment for underrepresented minorities, women, socio-economically disadvantaged students, and non-native speakers of English. Respondents also felt that the school faces obstacles in fostering minority representation and diversity that include Proposition 209 and insufficient financial aid and scholarships.

Details on the survey responses and on initiatives already under way will soon be sent via email to Haas faculty, students, and staff.

For more information, please contact the committee at diverse@haas.berkeley.edu.

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Financial Times Ranks Center for Executive Development #20 in the US

The Haas School's Center for Executive Development (CED) programs were ranked #20 among US schools and #37 in the world by the Financial Times in a survey of executive development programs published today, May 17, 2004.

The Financial Times also evaluates two categories of executive programs. CED ranked #20 in the US and #48 in the world for its custom programs, designed to address a specific client's needs. Its open enrollment programs, open to individuals from a variety of companies, ranked #17 in the US and #34 in the world.

Last year, CED, which administers these programs at the Haas School, had an overall ranking of #16 in the US and #28 in the world.

To be eligible for the Financial Times ranking, schools must have more then $2 million of business in each category. The survey is based on survey responses from program participants and corporate purchasers as well as data supplied by participating schools. The Financial Times weighs the schools' rankings of the past three years, which were 40%, 33%, and 27%, respectively. This year, 48 business schools participated in the open enrollment survey, 56 in the custom program survey.

For full text, go to http://rankings.ft.com/rankings/openProgrammes/rankings.html.

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Business Forecast Luncheon to Focus on Digital Entertainment, June 16

John Riccitiello, formerly of Electronic Arts, Inc., BS 81, will speak at the 2004 Business Forecast Luncheon; his topic: "What's on Tonight? And What's it Playing on? Who, What, and Where to Watch in Digital Entertainment."

Sponsored by the Haas Alumni Network, the Business Forecast Luncheon takes place on Wednesday, June 16, from 11:30 a.m. to 1:30 p.m. at the World Trade Club in San Francisco. The event is open to the entire Haas School community.

Riccitiello, who is in the process of starting a private equity firm focused on consumer media and entertainment, served as president and chief operating officer of Electronic Arts from October 1997 to April 2004. Under his leadership, the company grew from $532 million in sales to approximately $3 billion, while profits increased approximately nine-fold. EA now holds a leadership position in both the console- and PC-driven interactive entertainment market, with such products as the Sims, Medal of Honor, and EA SPORTS brands, as well as licensed properties such as Harry Potter, James Bond, and Lord of the Rings. In the past year, EA has been in Forbes magazine's Top 500 and Business Week's Top 50 "Best Performers." It has also been recognized by Fortune magazine as one of America's top 100 places to work.

Deadline for registration is June 13. Early registration is recommended as space is limited.
Register online at http://www.acteva.com/go/haasalumni. For more information, contact the Alumni Relations Office at 510-642-7790 or alumni@haas.berkeley.edu.

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First-Year MBA Student Consulting Projects Span the Globe

Teams of Berkeley MBA students taking part in the International Business Development course, one of the most popular courses at Haas, will spread out over the globe beginning May 22 to conduct on-site consulting projects for companies, nonprofits, and nongovernmental organizations.

Sixty-four MBA students will take on a variety of projects, benefiting organizations from a Native American Heiltsuk community in British Columbia to an agroforestry center in Cameroon.

Divided into 16 teams, the students will depart for 13 different countries or regions: India, Bangladesh, Chile's Easter Island, Mexico, Ghana, Tanzania, Finland, China, Canada, Cameroon, South Africa, Tahiti in French Polynesia, and Peru. This year's client list includes organizations that have worked with IBD teams for years, along with a number of new clients hosting IBD teams for the first time.

New projects this year include:

For more information on the IBD program, visit http://www.haas.berkeley.edu/HaasGlobal/IBDindex.htm.

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Second Annual Haaski Open a Smashing Success

The Haas School's annual golf tournament, the Haaski Open, was a great success this year with over 100 golfers spending a day in the sun while supporting the school.

Hosted by Grant Inman, MBA 69, at the Claremont Country Club, the field of 105 golfers included Haas alumni, current students, faculty, staff, former Cal athletes, current Cal coaches, and university administrators. The event raised more than $100,000 for the Haas School through sponsorships, live and silent auctions, and green fees.

The Haas School of Business would like to recognize the following individuals and organizations for their sponsorship:

EAGLE ($10,000)
Stephen & Susan Chamberlin
Grant Inman

BIRDIE ($5,000)
Patricia Dunn & William Jahnke
Stephen Etter
Jonathan Harris & DJ Tierney, Morgan Stanley
Marc Singer, McKinsey & Company

PAR ($2,500)
Tom Broderick, PricewaterhouseCoopers LLP
GEB Properties, Inc.
Greyrock Capital Group
Rick Holmstrom

Special thanks to the following individuals and organizations for their support:
John Abbott, Chico Brewhouse; BYOG - Build Your Own Garment; Claremont Country Club; DoubleTree Hotel; Dreyer's Grand Ice Cream; Rick Enos, Compadres; Peter and David Liebowitz; and The Wall Street Journal.

Extra special thanks to the student volunteers from the Haas School of Business:
Tom Chang, MBA 04; Apurva Dave, MBA 05; Mahta Eghbali, BS 04; Mark Gervase, MBA 04; Jeff Holiday, BS 04; Camille Landis, MBA 05; Brian Leslie, MBA 04; Anuj Mathur, MBA 05; Yelena Nisenbaum, BS 04; Patrick O'Neill, MBA 05; and Jason Tanner, BS 04.

The following people served on the 2004 Haaski Open planning committee and contributed largely to its success: Edward Arnold, BS 40; Tom Broderick, MBA 76; Paul Cortese, BS 40; Stephen Etter, MBA 89; Mark French, MBA 98; Mark Gervase, MBA 04; Jonathan Harris, MBA 96; Doug Massey, MBA 04; Raymond Miles (former dean, professor emeritus); Emily Norman, MBA 04; Marc Singer, BS 86; and
Andrea Sturzu, BS 04.

If you are interested in joining the 2005 planning committee or would like to pre-register for next year's tournament, please contact Jeff Rhode at 510-642-1907 or rhode@haas.berkeley.edu.

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Haas NewsWire's Summer Publication Schedule Set

The Haas NewsWire will be published monthly this summer on June 14 and July 19. Regular weekly publication will resume with the first issue of the fall semester on August 23.

Please submit any news and events to haasnews@haas.berkeley.edu.

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This evening at 8:00 p.m. on KQED FM, Dean Tom Campbell and Robert Reich, former US Labor Secretary and Goldman School of Public Policy's Distinguished Visiting Professor, can be heard in a broadcast of a previously recorded World Affairs Council conversation titled, "Prosperity: Preparing for the Global Economy.

Peter Sealey, adjunct professor in the Marketing Group, was quoted in Business Week on May 17 in an article titled "The Great Innovators: He Built A Better Mouse; Hollywood Feared New Technology - But Disney Used it to Create An Iconic Brand." Sealey commented on the Disney brand within the entertainment industry.

The Haas School of Business was mentioned in Money Telegraph on May 14 in an article titled "Internet Start-up Finds Key to Success on the Dotcom Slopes." In the article, Richard Downs, founder of Iglu, a successful online travel agency, said his entrepreneurial efforts were helped when he attended Haas as an exchange student in fall 1997. For full text: http://www.telegraph.co.uk/money/main.jhtml? xml=/money/2004/05/14/ccdot14.xml&sSheet=/money/2004/05/14/ixcoms.html

Severin Borenstein, E.T. Grether Professor in Public Policy and Business Administration, commented on rising oil prices on KQED's FM Forum on May 13 in a segment titled "Price of Crude Oil." He also addressed rising California gasoline prices on the Ten O'clock News on KTVU channel 2 on May 5. For more information, visit http://www.kqed.org/programs/program-landing-local.jsp? progID=RD19.

Borenstein made several television and radio appearances in the past week, including:
May 12 on KFBK 1530 AM radio in Sacramento on rising California gasoline prices.
May 13 on KQED's FM Forum discussing world oil supplies and prices.
May 14 on KPCC radio on Airtalk discussing California's electricity markets restructuring.
May 14 on the KPIX Channel 5 news discussing rising California gasoline prices.

Business Week Online highlighted the Haas School's Global Social Venture Competition in its MBA Insider column on April 29. The item, titled "Toward a Better World", featured competition winner Schools for Community Empowerment (SCE) of East Oakland, which has one UC Berkeley Ph.D. student and one Ph.D. graduate from the Department of Education on its team. Full text: http://www.businessweek.com/bschools/content/apr2004/bs20040429_5395_bs045.htm

Balazs Veress, MBA 2004, was mention in Fansonly.com on May 12 in an article "Academic Achievements Recognized at Honors Luncheon: Annual Celebration Includes More than 200 Student-Athletes With at Least a 3.25 GPA." Veress was mentioned as one of the Pacific 10 conference post-graduate scholarship winners. For full text: http://www.fansonly.com/printable/schools/cal/genrel/051204aaa.html? frame=bottom

The UC Berkeley Business Plan Competition and its winner, Proton Power, were featured in Fuel Cell Today on May 11 in an article titled "Solid Fuel Cell Technology Takes First Prize at UC Berkeley Business Plan Competition." For full text: http://www.fuelcelltoday.com/FuelCellToday/IndustryInformation/ IndustryInformationExternal/NewsDisplayArticle/0,1602,4391,00.html#

Cynthia Kroll, researcher at the Fisher Center for Real Estate & Urban Economics, was quoted in the Contra Costa Times on May 9 in an article titled "Expectations High for Region's Growth." Kroll commented on the economic development of Eastern Contra Costa County.

Ashok Bardhan, researcher for the Fisher Center for Real Estate and Urban Economics, was quoted in the Contra Costa Times on May 8 in an article titled "Port Protesters Issued Injunction." Bardhan commented on the impact across numerous industries of the truck driver protest at the Port of Oakland.

John Freeman, Helzel Professor of Entrepreneurship and Innovation, was quoted in the Silicon Valley/San Jose Business Journal on May 7 in an article titled "Feeling Lucky? Watch out for IPO Hype" Freeman commented on Google's future prospects. For full text: http://sanjose.bizjournals.com/sanjpse/stories/2004/05/10/story1.html? t=printable.

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Alumni Events

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