AIM Investment Management is donating both its name and its capital to establish an investment center at the C. T. Bauer College of Business of the University of Houston that is intended to help train graduate students in money management.

In the AIM Center of Investment Management, students are to run a multimillion-dollar fund, said Robert Casey, assistant dean at the Bauer School.

The Houston mutual fund company hopes to both deepen ties with a school of which nearly one-third of its employees are graduates and create a potential "farm team" where future employees might be developed, Mr. Casey said. The company has pledged $2 million toward the building of the center.

In the program, students are to raise money from accredited investors through private partnerships, make quarterly presentations to the investors, and aim for market-beating returns, Mr. Casey said. Students hope to raise $1 million to $3 million for a mid-cap equity growth fund, he said.

In addition to strengthening its connection to the university, AIM will be donating prototype technology that will get its first real-world test in the school, said a spokesman for the company.

Though some may be nervous about putting their money into the hands of graduate students, the results in a similar program at the University of Austin have been respectable. The latter developed the first such program in this country in the early '90s, and the graduate students have averaged a 19.3% annual return on the growth fund they launched in 1994, said D. George Gau, chairman of the finance department at the Austin school.

For the most recent fiscal year - which ended in February - the $14 million-asset fund returned 26.8%, said Mr. Gau.

AIM's project is more sophisticated than its predecessor, Mr. Casey said. The fund at the Bauer School - named for retiring AIM chairman Charles T. Bauer, who recently donated $40 million to the school - is to include accounting, marketing, and back-office responsibilities in addition to investment decisions.

"It's almost like a flight simulator," Mr. Casey observed.

The building is expected to be completed next spring, with classes starting in the fall of 2001, said Mr. Casey.

The school needs to raise roughly $5 million for construction and so far has commitments either of cash or in-kind contributions from a number of sources, Mr. Casey said. Assistance has been pledged from the architectural firm Gensler & Associates, which has agreed to design the building. IBM, Reuters, Cisco, and others are being solicited for help, he said.

San Antonio-based Frost National Bank has also agreed make an unspecified gift to the center, and other banks may get involved soon, Mr. Casey added.

The students have yet to begin raising money for the fund, he said, since various regulatory hurdles at the Securities and Exchange Commission remain to be cleared. He said he expects this to be done by late fall.

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