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The recent Wall Street Journal story on Indiana University’s (IU) student-run real estate fund generated plenty of commentary, though much of it focused on the composition of the student group pictured in the article.

“Cue the ‘lack of diversity’ putdowns in 3…2…1,” one commenter wrote.

“One female only!” another observed.

But D. E. Kuppler came closer to what bothered me about the story. Kuppler described the program as one in which students learn “practical job skills” by “extracting value from industrial real estate,” while investors walk away with a “fantastic return.” The question wasn’t asked explicitly, but Kuppler might as well have: What are these students learning to do?

As the story’s author, reporting intern Lily Belle Poling, describes it, IU boasts one of the wealthiest student-run real estate investment operations in the country. Twenty undergraduates at the Kelley School of Business oversee roughly $12 million in outside equity, sourcing and vetting real estate deals across the country under the name Sample Gates Management.

According to Poling, the students screen “up to 400 potential investments a year,” build financial models, and present the strongest candidates to a 10-person investment committee of industry veterans. This summer, the fund exited its first investment, an Indianapolis industrial warehouse, for a 65 percent gross profit, which it made in about 16 months. One board member called the return “good for sort of any professional firm, not just students.”

At first, I wondered whether these programs blurred the line between experiential education and unpaid labor. Poling, for example, doesn’t indicate whether IU students receive academic credit for managing the fund, but she does note that they do the work without making a “dime.” Given the returns they help generate, I find that arrangement curious. 

But I think there is a bigger issue than even this, one that was illuminated in a conversation I had with someone at the University of Texas at Austin’s Real Estate Center, which operates its own student-run investment fund. (The University of Texas at Austin (UT) fund is structured differently from IU’s. UT’s capital was provided by donors, and investment returns are recycled back into the fund for future students to use. IU’s program, by contrast, raises capital from third-party investors who expect a return on their investments).

Talking with me about the purpose of programs like these and, more broadly, the purpose of business education, the UT representative, whom I will leave unnamed, put it plainly: Employers are the university’s clients. The mission is to produce graduates with the skills employers seek.

I suspect many business schools see themselves in this way, and there is obvious logic to it. Students and parents spend enormous sums on college expecting careers at the end of it. Universities respond by building programs employers recognize and reward. Indeed, programs like these investment groups may represent some of the only direct, career-specific training students receive during college. If commercial real estate firms, investment banks, and private equity companies want graduates who can build discounted cash-flow models, evaluate acquisitions, and manage portfolios, schools have every incentive to teach those skills.

And I have no objection to career-oriented curricula, and I can hardly fault a university for wanting its students to leave prepared for good jobs. But universities should also consider what those incentives ultimately produce. If employers are the university’s clients, then business schools will naturally orient themselves toward the needs of the existing economy. The question is whether universities should merely respond to those needs or exercise some judgment about the kinds of economic activity they help legitimize.

And what business schools are legitimizing here is the broader financialization of the economy, whereby more and more economic activity is organized around turning existing assets into vehicles for investment and financial return rather than creating new goods, services, or productive enterprises.

Consider real estate. Housing was once primarily a place to live. Today, it is largely treated as an investment asset to be managed for financial return. (I won’t belabor this evolution; there is plenty of good material online about how housing became an investment vehicle.) Modern business education reflects this evolution. Students are being trained to manage other people’s money and generate returns from existing assets, rather than to start businesses that create new goods and services.

I’m hardly the first person to notice this. Business schools have been the subject of numerous essays and even books pointing out their pedagogical problems. In his 2018 essay “Why we should bulldoze the business school,” Martin Parker writes that business schools “have huge influence,” yet are “widely regarded to be intellectually fraudulent places, fostering a culture of short-termism and greed.” Parker’s politics may be another matter, but his diagnosis is worth considering.

Programs like Sample Gates are, after all, preparing students for careers in commercial real estate, private equity, and investment management, where firms such as Blackstone rank among the most prestigious destinations. The effect of institutional investors such as Blackstone on housing affordability, for example, is debated, but I come down on the side that their involvement has made housing more expensive—and the Government Accountability Office, for what it’s worth, found in 2024 that institutional investors have contributed to higher home prices and rents in markets where their ownership is concentrated. The issue has become serious enough that even President Trump, hardly an enemy of financialization, signed an executive order this year titled “Stopping Wall Street from Competing with Main Street Homebuyers,” declaring that large institutional investors should not be buying single-family homes that could otherwise be purchased by families.

There is something strange about business schools treating a pipeline into these firms as an unquestioned educational success when even the Trump White House is beginning to ask whether some of private equity’s most profitable activities serve the broader public good.

I don’t know exactly how business schools should be reformed, or what programs like Sample Gates should look like instead. But I do think schools should stop occasionally and ask themselves: What are we really teaching?

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