A more detailed history of the evolution of the Wharton Investment Management Fund is summarized below:
The Wharton Fellows Fund (as the Wharton Investment Management Fund was originally known) was founded in 1993, and received its first investment in September 1994 from Sheldon Gordon (WG‘59), a retired partner of The Blackstone Group. The fund was originally set up as a balanced fund that was allowed to invest in many different types of securities. In 1995 the Fund adopted an equities-only investment discipline.
In 1996 the Wharton Fellows Fund adopted a small-cap value discipline, an investment philosophy adhered to by the Wharton Investment Management Fund to this day. The rationale for this decision was based on several factors. First, the Fund Fellows felt the broad mandate of a balanced fund reduced their ability to focus on collective education and market out-performance. Second, in order to both increase the assets under management and more closely resemble the investing philosophies of existing investment management firms, the Fund Fellows decided a more specific investment strategy was required. Third, after experimenting with an equities-only investment discipline, the Fund Fellows selected a small-cap value focus because the management of smaller companies is often more accessible to students and the market for small-cap companies is generally priced less efficiently than for large-cap firms. Additionally, it is believed that a value approach for a student-run fund is more manageable given the high turnover of portfolio managers.
Beginning in 1997, the Wharton Fellows Fund increased its assets under management when it received a series of pledges from both The Wharton School of The University of Pennsylvania and the Wharton Graduate Association (WGA).
At the beginning of 2002, the Wharton Fellows Fund and The Wharton School of The University of Pennsylvania restructured their relationship in an effort to provide a more sustainable training platform for Wharton MBA students with an interest in investment management. The assets in the Wharton Fellows Fund were transferred to the newly created Wharton Investment Management Fund at that time and the Wharton Fellows Fund was subsequently closed. At the time of the transfer, there was approximately $300,000 under the management of the Fund.
The Fund received an additional $300,000 capital infusion during the 2010 school year raising the fund's total assets under management to $1 million. The Fund also changed its mandate from small-cap to all-cap.