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$3-million Gift Enhances Study of Value Investing at Rotman

September 3, 2003 - Business students will be learning much more about value investing, thanks to a $3 million gift to the Joseph L. Rotman School of Management at the University of Toronto.
The gift from John Watson (BCom 1966, MBA 1967) establishes the John H. Watson Chair in Value Investing, the first of its kind at a Canadian business school. Watson is managing partner of Sprucegrove Investment Management Ltd., which provides investment management advice, mainly in the specialized area of global equity management.

Value investing is the search for companies whose share prices are undervalued and, as such, is a bargain-hunter’s approach to picking stocks. This approach assesses a company’s intrinsic value regardless of its current share price, using a series of strictly quantitative tools.

Finance professor Eric Kirzner, a leading authority on investment finance who has been with the U of T since 1989, has been named the inaugural chair holder.

“When I looked at the landscape of Canadian business education, I saw very few students who even knew what value investing was -- never mind having expertise in the field. This initiative aims to address that need,” says Watson. “I believe that under the outstanding leadership of Eric Kirzner, the Rotman School can produce an excellent slate of graduates who can contribute to the efficient allocation of our nation’s resources by applying their expertise.”

Practised by financial gurus such as Warren Buffett and Sir John Templeton, value investing fell out of favour in the early 1990s due to trends driven by the high returns of high tech and dot-com stocks. The approach has regained popularity in recent years after the tech markets crashed. Many value investors predicted that the high tech bubble would eventually burst, and the markets have proved them right.

The Watson gift will bring enhanced research and teaching, expanded course offerings, additional seminars and guest speakers and the opportunity to attract new faculty. As chair holder, Kirzner will conduct research and teach, and will work collaboratively with the Bonham Centre for Finance and U of T’s Capital Markets Institute – both located at the Rotman School.

“The markets are coming out of one of their worst periods since the 1930s, but tough times often turn out to be the best opportunities,” says Kirzner. “In this context, we will nurture a generation of extremely well-trained security analysts who have the tools and ethics to put Canada in the forefront of market analysis.”

Roger Martin, dean of the Rotman School of Management, says the new chair will greatly augment the teaching and research platform around value investing. “We believe that boosting this area of our curriculum will have long-term benefits for the Canadian economy as a whole. Producing highly trained security analysts is essential to the development and enhancement of capital markets in Canada, which is in the public interest,” he says. “Thanks to Mr. Watson’s generous support, we will provide more knowledgeable practitioners in this area, and educate future managing partners and finance leaders.”

Recently ranked by The Financial Times, The Wall Street Journal and BusinessWeek among the best business schools in the world, the University of Toronto's Joseph L. Rotman School of Management offers leading-edge research and degree programs, including the prestigious Rotman Full-Time MBA and Part-Time MBA programs, the One-Year MBA for Executives, a first-rate Doctoral program, the distinctive Master of Management & Professional Accounting program, the undergraduate Commerce program in partnership with the Faculty of Arts and Science, combined MBA programs with the University of Toronto faculties of Law, Engineering, Nursing, and Department of Economics, and an innovative series of Executive Programs tailored to the current needs of businesses and individual executives.

For the full story on John Watson's gift, go to http://www.rotman.utoronto.ca/supportrotman.