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Release: Immediate

UI graduate creates $100,000 fund for business students to buy stocks

IOWA CITY, Iowa -- A $100,000 gift from University of Iowa business graduate

W.A. "Bill" Krause is challenging undergraduates at the UI College of Business Administration to show off their investment prowess as the managers of a portfolio of real stocks, bonds and other securities.

Krause, president and chief executive officer of the Krause Gentle Corp., the West Des Moines-based company known for its chain of Kum and Go convenience stores, announced the endowment of The Krause Fund at the UI College of Business Administration Friday, May 8.

The 1957 graduate of the UI also established similar funds at Iowa State University, the University of Northern Iowa and Drake University. Undergraduates at the four universities will take part in an annual competition, known as the "Krause Challenge," to show the best return on their investments.

One student from each of the four universities will be selected on a competitive basis to serve on the board of directors of the Krause Gentle Corp. each semester.

Gary Fethke, dean of the College of Business Administration, says the experience of managing a portfolio of actual stocks and other investments is invaluable for students and is rarely available to undergraduates. The College of Business Administration operates a similar fund, known as the Henry Fund, for graduate students.

"We're grateful to Bill Krause for his commitment to the university and to business students in Iowa," Fethke said. "The Krause Fund will provide our students with an uncommon opportunity to develop the quantitative and interpersonal skills to succeed as investment professionals."

Under the program, students in the Securities Analysis class at the UI will act as the managers of the $100,000 portfolio, recommending investments and investment strategies. They will present their recommendations to an advisory committee of investment professionals who will make the final decisions on buying and selling the portfolio's holdings.

The Krause Fund requires that at least 25 percent of the investments be held in Iowa-based companies or companies that have a significant presence in Iowa.

The competition categories include: best overall fund performance; ability to get other Iowa companies to invest; entrepreuneurship and innovation; and presentations to the board of directors of the Krause Gentle Corp.

The College of Business Administration's portfolio fund managed by graduate students, the Henry Fund, began in 1994 with a $100,000 endowment and is now worth more than $300,000. The fund is named after business school alumni Henry B. Tippie and Henry Royer, whose contributions started the fund.

Tim Loughran, associate professor of finance who advises the Henry Fund, will be the faculty advisor to the Krause Fund. He can be reached at (319) 335-0882.