German CFA SocietyInvestment Research Challenge

Germany 2010Germany 2010

The Challenge

• The ChallengeThe ChallengeThe ChallengeThe Challenge

• The Timeline

• The Rules

• The Company• The Company

2Investment Research Challenge Germany

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The Global Challenge

• Student teams from Asia, Canada, Europe, and the US are mentored by industry professionals in writing an equity research report on a publicly traded company

• Reports are graded by investment professionalsprofessionals

• Top 4 teams are chosen to present to a panel of experts

• Winning team competes at Regional Final

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2010 Global ChampionsUniversity of the Philippines

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Global IRC Network

Americas + New York:Americas + New York:Americas + New York:Americas + New York:

• 30 Challenges

• 200 Universities

Asia Pacific:Asia Pacific:Asia Pacific:Asia Pacific:

• 16 Challenges• 16 Challenges

• 140 Universities

EMEA:EMEA:EMEA:EMEA:

• 14 Challenges

• 90 Universities

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The purpose

Teach best and ethical practices in

equity research through a real-

world experience to the next

generation of investment generation of investment

professionals

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The Student Experience

– “Candid feedback from mentors, graders, and judges helped me to understand the industry”

– “It was a thrill to open the NYSE!”

– “It was an honor to win US$10,000 for my university”

– Understanding : “opportunity favors the prepared mind”prepared mind”

– “My sell-side research report opened doors to a fantastic internship”

– “I was offered a job in the investment industry where jobs are difficult to find.”

– And the best part was…

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The Challenge

Form team Form team Form team Form team of 3 of 3 of 3 of 3 –––– 5 5 5 5

studentsstudentsstudentsstudents

Mentoring by Mentoring by Mentoring by Mentoring by an industry an industry an industry an industry professionalprofessionalprofessionalprofessional

(CFA (CFA (CFA (CFA charterholder)charterholder)charterholder)charterholder)

Interview Interview Interview Interview company company company company

managementmanagementmanagementmanagement

Write an Write an Write an Write an equity reportequity reportequity reportequity report

Present to a Present to a Present to a Present to a panel of panel of panel of panel of industry industry industry industry expertsexpertsexpertsexperts

Compete Compete Compete Compete against the against the against the against the world’s top world’s top world’s top world’s top

teamsteamsteamsteams

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The IRC Germany

• All teams have to submit an company research report

• Graders will chose the 4 teams with the best reports

• These reports are presented to a panel of experts to choose the overall winner of the German Research choose the overall winner of the German Research Challenge

• The winning team will compete against the other winning teams in the EMEA region at the EMEA regional final in Madrid

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The Timeline

• The Challenge

• The TimelineThe TimelineThe TimelineThe Timeline

• The Rules

• The Company• The Company

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The Timeline

• 15 October 2010 → KEY DATE!• Universities submit team applications to Society

• 26 November 2009 → KEY DATE!• Teams submit up to 3 questions for the subject company to Society

• 2 December 2009• 2 December 2009• Teams to attend Company presentation in Frankfurt if possible

• Travel expenses will reimbursed

• 21 January 2010• Teams submit final reports to Society by 5pm

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The Timeline

• Week commencing 31 January 2011• Local Final held in Frankfurt

• Overall winner announced at Final

• 3 March 2011• EMEA Regional Final held in Madrid

• 8 April 2011• 8 April 2011• Global Final held in Omaha, Nebraska, USA

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The Rules

• The Challenge

• The Timeline

• The RulesThe RulesThe RulesThe Rules

• The Company• The Company

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The Rules

• Teams:– 3 – 5 undergraduate or graduate students

– One team per university

• Participating students:– Students cannot be CFA charterholders– Students cannot be CFA charterholders

– Students that had been or are currently employed in a role whose primary duty involves fundamental company analysis are not allowed to participate

– Students have to be actively enrolled at the participating university

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The Rules

• Research Process:– Only publicly available information can be used

– Reports must be the original work of the students; faculty members and mentors may not write any part of the report

– When conducting primary research, students must identify – When conducting primary research, students must identify themselves as students and disclose their involvement in the CFA Institute Investment Research Challenge

– Teams may contact the subject company’s customers, competitors and suppliers, but must confine their conversations to corporate officers who normally interact with investors, such IR officers, CEO’s or CFO’s

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The Rules

• Faculty involvement:– No more than 2 hours of assistance from faculty advisor

with primary research

– No more than 6 hours total assistance from faculty prior to local Finallocal Final

– Faculty may spend an additional 2 hours for each regional or global final in which the team participates

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The Rules

• Mentors:– The teams will be introduced to their allocated mentor via

email by the German CFA Society in November

– A maximum of 6 hours of contact prior to submitting the written report, including phone calls, face-to-face meetings, written report, including phone calls, face-to-face meetings, and reviewing report will be allowed

– Mentors will be allowed to review students’ written work and provide comments only. Mentors will not be allowed to perform any research or write any portion of the report

– The teams may spend an additional 2 hours with their mentors for each regional or global final in which the team participates

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The Rules

• Research report:– The teams must use the report template– Reports may be 8-10 pages, including an investment

summary– Any additional charts and/or graphs will be included in the

appendix. There is no limit to the length of the appendixappendix. There is no limit to the length of the appendix– The report must be the original work of the student teams,

and may not be copied from another source– The final report will be submitted to the Society in electronic

format, on or before Friday 21 January 2010– The reports will be submitted under an anonymous team

name, e.g. Team A, Team B which is allocated by the Society

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The Rules

• Grading criteria• Section Maximum Score

• Investment Summary 20

• Valuation 20

• Business Description 5• Business Description 5

• Other Headings 5

• Industry Overview & Competitive Positioning 15

• Financial Analysis 20

• Investment Risks 15

• Total 100

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The Rules

• Grading:– The reports will be graded by a group of investment

professionals

– Grading will consist of a blind process in which the identity of the university is not known to the gradersof the university is not known to the graders

– The 4 teams that receive the top scores will be selected as finalists

– The graders will provide short comments to give feedback for the students

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The Rules

• Presentation:– The finalist teams will make a presentation in front of the

panel of experts selected by the Society

– Each presentation will last 10 minutes, with 10 additional minutes of panelist Q&Aminutes of panelist Q&A

– Panelists will be provided with copies of the written reports, but will base their scores on the oral presentation only

– Team scores will be weighted 50% for the written report and 50% for the oral presentation

– The overall winner will be selected on the day of the panel presentations

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The Rules

• Presentation judging criteria– Materials (quality of slides and other materials)

– Argument (using data to support recommendations)

– Poise (being confident and convincing)

– Questions (ability to answer questions effectively)– Questions (ability to answer questions effectively)

– Use of resources (team involvement in presentation and Q&A)

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The company

• The Challenge

• The Timeline

• The Rules

• The CompanyThe CompanyThe CompanyThe Company• The CompanyThe CompanyThe CompanyThe Company

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The Company

• The company will be the same for all teams

• The company will be chosen by the German CFA Society

• The company will be a publicly listed company• The company will be a publicly listed company

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