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At a dinner in December, Frank Reilly (BS Commerce ’57) greeted the last group of students he would ever teach. After 34 years at Notre Dame, the Bernard J. Hank Professor of Finance and former business dean would retire in June. It was time for a toast.
He stood before the students and told them he would have paid Notre Dame to teach them every day.
He said he was blessed to have a career that allowed him to do exactly what he wanted.
And that he’d had the greatest life he could imagine.
It seemed incredible, almost unimaginable, to the students and other attendees that this finance giant and business college visionary was honoring them in this way, that he was framing his career in such humble, outward-facing terms.
But this is Reilly’s way. When you ask him about his tenure at Notre Dame, he talks about colleagues who came through for him, students who led him to new ways of thinking and alumni who supported his efforts. And he talks about administrators, including Father Theodore Hesburgh, CSC, who convinced the former student to return to Notre Dame as a dean in 1981 when Reilly wasn’t sure the time was right.
It was Lee Tavis (BS Commerce ’53), former chaired professor in finance, who approached Reilly in 1980 about interviewing for the dean’s position for the Notre Dame College of Business Administration. But Reilly wasn’t interested. He was enjoying his finance professorship at the University of Illinois. Plus, he had no experience as an administrator. So he waved Tavis off with a thanks, but no thanks.
But Tavis eventually called back to invite him to a big basketball game and just to talk about research.
“Frank is nationally known as a real leader in the profession, a revered statesman... Because of Frank, AIM is one of the great stories in higher education in the past 30-40 years.” –Scott Malpass
“So I came and we talked and had a great conversation,” Reilly recalls. Then he spoke with the provost, something he wasn’t expecting.
He got another surprise when he rode to the game with Hesburgh. “Father Ted said, ‘Gee, we’re trying to build something here, and we need our graduates to come back and help us, and we’d really like you to think about doing something for us,’” Reilly recalls.
Still, he never suspected a grand scheme. “You look back and you see this whole thing was set up,” Reilly laughs.
However, the visit got him thinking. “Eventually I decided that if I ever wanted to be a dean, this would be the first place I would do it,” Reilly says. “I’ve always loved Notre Dame and everything it stands for. So I began to get interested and excited about it, and I eventually said yes.”
Returning to Notre Dame meant re-establishing a connection that began with his father, Clarence, who was recruited to play football by Knute Rockne in 1924. But Clarence was injured that first year and went back home to Chicago to finish school at DePaul. Reilly came to Notre Dame in 1953 and immersed himself in academic life. “Every semester I took an overload just because I enjoyed the courses,” he says. “In four years, I ended up taking something like 160 credit hours.” He joined an experimental program in the Business College called the Program for Administrators (PFA), which was based on case studies. “I ended up drifting into finance and investments,” he explains.
He graduated in 1957 and began collecting valuable career experiences: trader, research analyst, professor. He also was invited to grade the prestigious Charter Financial Analyst (CFA) exam. Reilly served as chair of the CFA Institute Board of Trustees, and after 40 years, is still involved with the Institute, which is the largest association of investment professionals in the world.
These career experiences would help him lead the business college to its next level. Top of the list was to build a greater research culture. “Our faculty members were dedicated to teaching and carried a very heavy load, but I thought we had to cut back a little on the teaching and give people more time to do research for publication in top journals,” he says. “We needed to recruit people who could research AND teach. We needed money for research databases. We had to get a better computer system — we only had two computers in the whole building for faculty.”
Then there was the lack of an executive MBA program. “Faculty did executive teaching on their own with no department, no structure, no assistance,” Reilly says. With his close friend Associate Dean Yusaku Furuhashi working on it, the Executive MBA program was ready in about six months — record timing.
Even with all his duties as dean, Reilly taught classes. Scott Malpass (MBA ’86, ’84), vice president and chief investment officer at Notre Dame, remembers taking Security Analysis at 7:30 a.m. “That class inspired me to become an investment professional,” says Malpass. “Frank wants you to learn and be successful. To do that you’ve got to be disciplined.
So those were rigorous classes, but he was always available to guide you.”
Reilly’s years as dean were good for the College. According to O’Hara’s Heirs: Business Education at Notre Dame 1921– 1991, during Reilly’s deanship, the undergraduate program achieved and maintained its standing among the country’s top business schools. The MBA program was ranked by Businessweek just below the top 20. The accounting program was placed fifth nationwide in a survey by Public Accounting Report.
“Cultural changes are always one of the most difficult goals to achieve,” said Mendoza Dean Roger D. Huang. “When Frank became dean here at Notre Dame, he inspired this place to work toward excellence in research and teaching, which he himself exemplified. In so doing, he became a testament to what Father Hesburgh taught us: Mediocrity is not the way to honor the Blessed Mother.”
Reilly never aspired to be a career administrator. He was always a researcher and teacher at heart. So in 1987, he decided it was time to go back to the classroom to teach elective courses, such as Security Analysis, Fixed Income Analysis, and Portfolio Management. As a complement to his teaching, he authored two books: Investment Analysis and Portfolio Management (ten editions) and Investments (six editions.)
And then there was AIM (Applied Investment Management), the course that would define Reilly’s legacy. Conceived by Reilly, Malpass and John Affleck-Graves, former finance chair and current University executive vice president, the class was launched in 1995 to give top students — undergraduates in the fall and MBAs in the spring — the opportunity to act as stock analysts and portfolio managers using real money. The class currently man- ages $10.5 million of the University’s $10 billion endowment.
“We wanted to train the next generation of top money managers and do it the right way with the right fundamental skills and aptitudes,” Malpass says. “So it wasn’t just how to do basic security analysis. It was also learning every part of the work. This is a very demanding class. It takes a lot of time for both the students and professors. But we wanted to look at the students holistically to help them advance.”
Over the 20 years of the class, the fund has returned 11.7 percent annualized versus 8.6 percent for its primary benchmark, the Standard & Poor’s 500 Index. “That’s extraordinary,” says Malpass. “That would put the AIM fund in the top 1–2 percent of all portfolios.”
He credits Reilly for helping the program become widely regarded among business schools and on Wall Street. “Frank is nationally known as a real leader in the profession, a revered statesman,” he said. “So to have him as the common thread through the whole thing is incredible. Because of Frank, AIM is one of the great stories in higher education in the past 30 to 40 years.”
AIM student Allison Fachetti (FIN ’15) is well aware that AIM will likely have a significant impact on the rest of her life and that doors will be opened. “If you want to do investment management or equity research, it’s expected that you do AIM,” she said.
Reilly honored Fachetti by recommending her for a CFA scholarship, which will cover the cost of the three-part test. “He told me, ‘If you know you want to do investment management, go after that. If you want to do research, take the CFA. You’ll be in demand, you’ll find a place,’” she says. “He just cares so, so deeply.”
And not just about finance, as Reilly taught his students. On a trip to San Francisco, where AIM students gleaned career information from top movers and shakers in finance, Reilly gave them advice from the heart. “He told us, ‘No one mentions this, but the most important decision you make in your life is finding your spouse,’” Fachetti recalled. “He told us how lucky he was to be married to Therese for 56 years. And that at the end of the day, work is important, but family is so much more important.”
With his retirement on June 30, Reilly plans to enjoy more time with his family. He and Therese have four children — Frank III, Clarence II, Therese (’85) and Edgar (FIN ’87). The Reillys also have seven granddaughters that delight them to no end. And Therese came up with a brilliant way to ensure maximum time with them. “We bought a home in Orlando because she was convinced that with Disney World so close, we’ll see the girls more often,” Reilly says. “And it’s worked out fairly well.”
Retirement will also mean travel with his wife, golf and remaining on several corporate boards because that world fascinates him.
And even if this statesman is officially departing, his gratitude will endure for Notre Dame and its role in the greatest life he could imagine.
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