Investors Told to Brace for Astounding Changes at Darden’s 7th Annual University of Virginia Investing Conference

14 November 2014

Experts in innovation treated investors attending the first day of the seventh annual University of Virginia Investing Conference to some startling ideas on health care, cybersecurity, energy and even exponential technologies.

“We’re living in crazy and amazing times,” said Peter Diamandis, M.D., chair and CEO of the X PRIZE Foundation and co-founder and vice chair of Human Longevity Inc. “Our lives are far more robust because of the impact of technology. Technology takes what’s scarce and makes it abundant.”

The “Investing in Innovation” conference — which began Thursday at the University of Virginia Darden School of Business and concludes Friday — brings industry experts from around the world who help investors find the best strategies to deliver positive returns while managing investment risk. The event is hosted by Darden’s Richard A. Mayo Center for Asset Management. At the conclusion of day one of the conference, Darden Dean Robert F. Bruner formally announced the naming of the center for Darden alumnus Richard A. Mayo (MBA ’68). Mayo received the honor for his lifetime contributions to the School.

Diamandis, an innovator in the fields of space travel, incentive education and health care, provided leaders some tips on what the future holds for business:

  • We are going to enter the era of perfect knowledge, in which you can get information where and when you want and if and how you want it.
  • The only constant is change and the rate of change is increasing.
  • Competition is now the guy in the garage — the entrepreneur.
  • Disrupt your own business or someone else will.

Examples of disruption? Skype gutted long distance. Craigslist helped drag down newspapers. Google sidelined libraries. Uber is slaying taxi businesses. “Technology today is turning every two to three years,” said Kathy Warden, corporate vice president and president of Northrop Grumman’s Information Systems. “It took 10 years just a short time ago.”

Change is also hitting the energy business hard — but in a good way for America. New techniques for extracting oil from shale and the discovery of massive natural gas reserves will soon change America’s dependency on foreign energy fuels.

“The innovation done by early pioneers in shale exploration — people thought they were crazy,” said Darden alumnus W. Barnes Hauptfuhrer (MBA/J.D. ’81), chief executive officer of Chapter IV Investors LLC. “Things have changed dramatically in the past five years. I call it the shale gas revolution. The shale oil revolution.”

“It’s a very exciting time to be in the business,” said Darden alumnus Robert S. Craine (MBA ’79), president and founder of Lynx Production Company Inc. and Lynx LNG LLC, who has been an independent oil and gas producer for 30 years. “Horizontal drilling and other advances we’ve seen have come from independent oil companies. It used to be from big oil.”

Look for America to disrupt the world’s economy. “We’re not ready to export oil yet because of political issues, but America’s production will change the world’s supply and demand in a fundamental way,” said Hauptfuhrer.

Craine said the fallout from the new wealth of oil in America would change the geopolitics of the world, better the trade balance and fatten the country’s budget. “We’re getting the job done,” he said.

Innovations in health care are also on the way — with big changes expected quickly. But don’t expect the Affordable Care Act to go away. “The Affordable Care Act caused a big fight, but we think it’s here to stay,” said Samuel D. Isaly, managing partner of OrbiMed Advisors. “Except at the beginning, I think it’s been implemented fairly well.”

But health costs have to be cut in a country with an aging population and one that spends 18 percent of its GDP on health care. It’s unsustainable, the experts said.

Technological advances will transform health care, said Bryan Johnson, founder of the OS Fund and Braintree. But important ideas need to be funded and innovators need to be given capital to bring their dreams to life. Risk tolerance needs to be raised. Biological innovations can happen fast, Johnson said. “The return in biology will be phenomenal.”

Digital health care will include technology that will capture vital data from patients, analyze that data and spit out the results, he said.

Darden alumnus Robert J. Hugin (MBA ’85), chair and CEO of Celgene Corp., said the good thing about America is that “patients matter.” If companies deliver drugs that help patients, “you will get reimbursed.”

Hugin noted that 5 percent of patients run up 50 percent of health care costs. “We have to find a way to reduce that.”

The day concluded with the announcement that Columbia Business School won the Darden @ Virginia Investing Challenge (DVIC), a stock pitch competition, which included 15 top business schools. Those business schools included:

  • Carnegie Mellon University (Tepper)
  • Columbia Business School
  • Cornell University (Johnson)
  • Duke University (Fuqua)
  • Georgetown University (McDonough)
  • Massachusetts Institute of Technology (Sloan)
  • New York University (Stern)
  • Northwestern University (Kellogg)
  • University of California, Los Angeles (Anderson)
  • University of Chicago (Booth)
  • University of North Carolina (Kenan-Flagler)
  • University of Pennsylvania (Wharton)
  • University of Virginia (Darden)
  • Vanderbilt University (Owen)
  • Yale School of Management

Darden Capital Management sponsored DVIC. Darden Capital Management is Darden’s innovative student club through which MBA students invest a portion of the School’s endowment. The club’s assets under management have grown to over $9 million.

About the University of Virginia Darden School of Business

The University of Virginia Darden School of Business delivers the world’s best business education experience to prepare entrepreneurial, global and responsible leaders through its MBA, Ph.D., MSBA and Executive Education programs. Darden’s top-ranked faculty is renowned for teaching excellence and advances practical business knowledge through research. Darden was established in 1955 at the University of Virginia, a top public university founded by Thomas Jefferson in 1819 in Charlottesville, Virginia.

 

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Darden School of Business
University of Virginia
ZunzS@darden.virginia.edu
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