May 30, 2019
Talent Meets Opportunity
By Amanda S.F. Hartle
Principal Financial Group partners with CMU students to revolutionize retirement, insurance and asset management spaces.
Imagine you're an executive at a global corporation making purchasing decisions on a vast array of retail, industrial, apartment and office properties in cities all around the world. The correct metropolitan area or a well-timed decision could have positive financial or quality-of-life implications for your customers and investors.
This year, Principal Financial Group partnered with students in Carnegie Mellon University's Department of Statistics and Data Science to take the guesswork out of commercial real estate decisions. The result was a statistical model that combines real estate returns with accurate predictions in diverse markets across different property types.
Principal supports Carnegie Mellon's undergraduate and graduate research programs, and as a first-time corporate partner, the company also is the first to support concurrent student projects in one semester across three of CMU's colleges – Dietrich College of Humanities and Social Sciences, Tepper School of Business and Heinz College.
“When it comes to cross-campus collaboration, Carnegie Mellon University puts it to practice, and it's immensely powerful,” says Joseph Byrum, Principal's chief data scientist. “CMU is one of the only places I can walk into, and immediately, there is university collaboration” across disciplines, departments and colleges.
Under Byrum's guidance, Principal has taken a new tack to build its reputation as an industry leader in leveraging data as an asset by utilizing university partnerships. Being able to tackle the real-world challenges facing the retirement, insurance and asset management spaces at one institution at the same time is incredibly advantageous, Byrum explains.
Throughout the course of each project, Principal staff members hold weekly meetings and set goals and deadlines for students. This involvement and familiarity with students and faculty is key.
“Saying ‘Here's your project and I'll see you at the end of the semester' doesn't work. What motivates us is knowing that we aren't working on a side project with them. We're putting critical things in, and we care about getting results,” says Byrum. “It comes down to picking projects that are good for the companies, good for the faculty and good for the students. It really has to be a winner for all three of those stakeholder groups.”
For information systems management graduate student Rahul Srivastava (HNZ 2019), his team's project taught him to consider the ripple effect of a solution for those outside his department.
“When I worked with their architects, they spoke from an entire organization perspective. It taught me that I needed to think of the bigger picture. One part always impacts other parts, and I should keep that in mind,” he says.
His team addressed overlapping data issues and the use of multiple aggregators among the six divisions of Principal's global investment arm. They created a centralized data management system to remedy the issues and studied industry trends to recommend additional areas for improvement.
The time-consuming project also had its own ripple effect in Srivastava's life.
“Prior to this project, I was not aware of the financial industry. I had to do a lot of research and a lot of work to learn more about it. After graduation, I will be a senior consultant with [global professional services organization] EY.”
The experience exposed psychology and statistics major Yuxi Xie (DC 2020) and her team to real-world experiences that result from interactions with a Fortune 500 company.
“While working on a project, I needed to communicate with our project manager, who understood modeling and markets, but I also needed to speak with portfolio managers who are the ones making the decisions,” Xie explains.
The potential solutions created by students like Xie and Srivastava are the reason why Principal sought out CMU and invested heavily in their partnership with the university.
“You go to CMU and work with the best-in-class technology education. CMU faculty are world class, students who go there are world class,” Byrum says. “So when someone is working on these problems and deciding what to do and what not to do, why would you want anyone else advising you?”