At a recent seminar on the future of Phillips Academy’s endowment, students discussed world trends in science and technology relevant to investment of Andover’s $736 million funding. Organized by Amy Falls, Chief Investment Officer, Stephen Carter, Chief Financial Officer and Eric Best ’66, the seminar offered nearly 25 students an opportunity to explore future investment opportunities and relay those ideas to Falls, who is responsible for investing Andover’s endowment. Best introduced the seminar as the same “strategic engagement” group thinking process that he applies to corporate boards. He presented a slideshow, titled “Phillips Academy Students of the Future,” which provided an overview of the evening’s guidelines and goals. An experienced sailor, Best used a sailing metaphor throughout the evening. He described markets, like the ocean, as “liquid, powerful, unpredictable, indifferent, driving.” Pointing out the impact that students can have, Best said, “The best idea can come from anyone, anytime,” but they become effective only if those who make the major decisions hear the idea and take action. Best summarized the motion in global markets, from 1950’s industrial, vertical structure to today’s informational “webs of participation” that depend on technology. Best’s slideshow highlighted Time Magazine’s Person of the Year cover this year, a mirror aimed at “You.” He connected this with a video of a talented young girl singing at a talent contest, which became a YouTube sensation. Best also referenced the dilemma in 1995 at Morgan Stanley and other investment banks, which he described as a lack of foresight regarding the importance of the internet. Today, Best said, global economic conditions are excellent, and “the wind is up” with enormous liquidity, or money available for investment, in global financial markets. Students then broke up into pairs to discuss their “thoughts on the future,” as the slideshow instructed. Then the pairs joined together for discussion at each of the four tables, and each group planned a quick presentation of their collection of ideas. Students brought up ideas about a wide variety of geographic areas, levels of unpredictability and specificity. John Gwin ’07 brought up the concept, first conceived by Wired magazine editor Chris Anderson, of a “long tail” in marketing. Due to vast warehouses, diverse supply and rapid shipping, companies like Netflix can offer a much wider variety of products that physical stores, like Blockbuster, which are limited by shelf space and must cater to the demands of popularity. Gwin also mentioned the segmentation of the market, and the rise of “narrowcasting,” or targeting products at a very particular audience. Prateek Kumar ’07 picked China Mobile, a Chinese telecommunications company, as a top pick for investment as the Chinese economy continues to grow at one of the highest percentage rates in the world. Kumar also commented on the resurgence of nuclear power in the United States, where there are plans to build 10 to 15 new reactors. Pointing to other examples of future trends, students named the growing Hispanic population in the United States, the success and failure of social networking sites, and the ease with which both digital and physical viruses spread. Best asked students how each of them would invest $10,000, which prompted a wildly disparate array of creative answers. Student said that they would put their money in Chinese blue-chip stocks, Chinese dropouts-turned-entrepreneurs, advertising, DNA analysis, “green” technology, and privacy. Falls concluded the discussion with a few remarks expressing her amazement at the intellect and creativity of the group. She said, “The is an optimistic group.” Falls said that Phillips Academy was already moving to increase investment in “green” energy and renewable resources. Falls also said that if she were given $10,000 to invest on her own, she would put that money into clean water as it becomes a scarcer and more valuable resource. Falls wrote in an email that the idea for the seminar was conceived in conversations between her and Best. She stated that their rationale was, “When thinking about the future – why not ask the future?” The website of Best Partners, the consulting firm that Eric Best heads, describes him as “an accomplished practitioner of scenario-based strategic planning as a tool for risk management, options identification and organizational change.” But Best took an elaborate path to advising investment bankers. After graduating from Phillips Academy, he attended Hamilton College in New York, where he majored in English. In addition to deep-water sailing, he studied international economics at Harvard and worked as a journalist for the San Francisco Examiner before joining Morgan Stanley in 1996, where Falls also worked. Best left to form Best Partners in YEAR. Leaving the seminar, students took away a perception that their ideas might gain some traction in the Investment Committee’s decisions on where to invest the endowment. Falls and Best also arranged for a videographer to record the event, especially students’ presentations of their ideas. This film will be shown at a meeting in New York on May 16, in a similar session with Andover parents and alumni in the financial community. Falls also plans to hold more events like this one with students.
