A group of 20 students at the University of Wisconsin at Madison is managing $40-million of the system's endowment funds -- and it's not play money.

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Author: Strout, Erin

Last month the Board of Regents voted to allow students in the Applied Security Analysis Program to manage $20-million of investments in treasuries and about $11-million in Treasury Inflation-Protection Securities. The allotments are in addition to $10-million in fixed income that the students have managed since 1998.

The pool of funds is believed to be the largest managed by students at any university in the United States.

"I am confident that our students will live up to the enormous responsibility placed in them," Mark Fedenia, director of the program, said in a written statement.

So why would a university put $40- million in the hands of 20 students?

Since 1998 the group has earned a 6-percent return on its investments, which meets the benchmark set by the board. And the investments under the students' management are considered among the safest, while still giving the group some real-world money-management experience.

"Beyond the sheer size of the portfolios," Mr. Fedenia said, "students will now experience the additional complexity of managing money in multiple portfolios with differing investment objectives."

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By Erin Strout