Internship Case Study - Dimensional Fund Advisors

Management in Practice

The Client:

Dimensional Fund Advisors (DFA) is a global investment management firm, whose investment philosophy is underpinned by rigorous academic research.  DFA is well known for their belief in the efficacy of capital markets, as well as their portfolio tilts toward small-cap stocks, a value-oriented investment style and emphasis on broad diversification.   Global assets under management at DFA exceed $US200 billion.

The Project:

The objective of the project was to analyse the structure of the Exchange-Traded Funds in Australia in 2011. It aims to track the performance of the Exchange-Traded Funds in Australia, and comment on their ability to track their target indices.

L-R: Loic Lacombe, MGSM Intern; Thomas Reif, DFA Portfolio Manager;
Graham Lennon, DFA Director & Head of International Portfolio Management; and
Professor David Gallagher, MGSM Supervisor

The Intern:

Loic is a Senior Project Manager in the real-estate and property industry. He was responsible in attracting institutional and private investors to fund building projects in French developing territories. He designed a unique financial model to provide vendor finance facilities for social and intermediate rental housing programs. Loic’s focus is analysing, modelling and managing the financial risk as part of business strategy.

Loic’s background is Mathematics. Loic wrote his Thesis in Econometric Models in the forecast of the interest rates in large industrial countries (US, Japan, Germany, UK, France) and spent 15 years as a Lecturer in financial mathematics, quantitative techniques and statistics at Sorbonne Business School and University of Saint Denis (France) while also working.

This project was the highlight of my studies at MGSM, where I began my MBA in June 2010. This MBA was preceded by 6 months of intensive English courses, which enhanced my journey. Working in DFA premises was my first experience in an Australian company. It has given me the appetite to go further in this sector and to work in the Finance industry. I thank DFA and David Gallagher for making this internship and research avenue possible.

The MGSM Academic Supervisor:

David R. Gallagher is a Professor of Management in Finance at the Macquarie Graduate School of Management, and a research director at the Capital Markets CRC Limited. He previously held appointments at The University of New South Wales (Australian School of Business), The University of Texas at Austin (McCombs School of Business) and the University of Technology, Sydney (UTS Business School).  He has previously served as a visiting scholar with the Investment Company Institute in Washington D.C.

Professor Gallagher’s research interests and expertise are in the fields of investment management and capital markets.  His research has led to industry and academic awards, together with competitively awarded research grants.  He is well known in industry, and has consulted widely.  He also directs an investments program at the Capital Markets CRC Limited with substantial sponsorship from major institutional investor organizations.

Dr Gallagher graduated with a Ph.D. in Finance from The University of Sydney, is a Fellow of the Financial Services Institute of Australasia (Finsia), and is an editorial board member of Finsia’s journal, JASSA.  He is a former deputy editor and area editor (Finance) of the Australian Journal of Management.