the cfa institute research challenge germany...

The CFA Institute Research Challenge

Germany 2011/2012

August 2011

CFA Institute Research Challenge Germany

The Challenge is an educational initiative in which leading industry professionals

teach and test business and finance students in research and report on a

publicly traded company. German CFA Society conducted the Investment

Research Challenge Germany for the first time in 2011.

Rules and Timeline

The Challenge starts in October 2011 and ends with a presentation in early

2012. It consists of the following components:

• Analysis of a Public Company: Teams research the same public company, selected by German CFA Society, including a question and answer

session with company management.

• Mentoring by a Professional Research Analyst: Each team is mentored by

a professional research analyst, who reviews and critiques the team's

report.

• Presentation of Research to a high-profile panel of CFA charterholders and

executives from the financial industry . The winning team will be selected

based on the combined scores for the written report and the presentation.

• If there are more than three teams competing in Germany the winner will

take part in the CFA Institute Global Challenge for the EMEA-region and in

case of success in the Global Challenge.

Contributors

• The CFA Institute Research Challenge Germany is sponsored by

CFA and CFA Institute Research Challenge 2

Participants

In 2011 these universities took part:

•Mannheim University

•European Business School

•Goethe Business School

•Hamburg University

•Frankfurt Business School

Only one team of 3-5 students per university is

admitted to take part. Participants should have

completed their bachelor already or complete it in

early 2012 latest.

Agenda


The CFA Qualification

The CFA Charter Holders

CFA Institute and GCFAS

CFA Institute Research Challenge


Key figures

• The CFA Program is the benchmark of the highest professional excellence and ethical standards in the investment industry on a global basis

• Candidates must pass three exams, have four years professional experience and abide by the Code of Ethics and Standards of Professional Conduct to be earn the designation.

• Topics include ethics and standards of professional conduct, investment analysis and valuation, economics and portfolio managment



How to obtain a CFA: There is no

easy way

Level I exam

Level II exam

Level III exam


4 years of professional experience

Abiding by the Code of Ethics and Standards of

Professional Conduct with an annual signoff

The CFA qualification

Worldwide excellence and recognition


“Whereas there are tens of thousands

of finance degrees available around

the world, ranging from the excellent

to the worthless, there is only one

CFA… explosive growth has made it,

in effect, global currency.”

-The Economist, 2005

“…the Chartered Financial Analyst

qualification, pursued part-time by

those already hired, has become the

industry’s benchmark.”

- Financial Times, 2009

Candidate Body of Knowledge


The CFA Charter

The leading standard for investment

professionals worldwide

CFA and CFA

Institute

Research

Challenge

8

The CFA Charter in Germany


Be a candidate

The case for students

• Earliest enrollment in final year of bachelor program

• Complete Level I or even Level II during your studies

• Benefit from University Partnership with

– European Business School (EBS)

– Mannheim University

– Goethe Business School

• Apply for scholarship (limited availability)

• Earn the charter after completing Level 3 and 4 years of

professional experience

• Total costs < 4000 USD including materials


Agenda






The Charter Holders

Occupational and Geographic Profile


The Charter Holders

A young, experienced and sophisticated

community


A Charterholder is…

• Credible: Adherence to a code of ethics that puts the

client's interest first and mastery of a comprehensive

body of investment knowledge.

• Committed: Demonstrated professional experience and

perseverance to undergo 18 hours of examination.

• Current: Exams updated with the latest and most

relevant knowledge and access to world-class lifelong

learning resources.

• Connected: Membership in a network of more than

100,000 investment professionals in over 130 countries.


Agenda






The CFA Institute Key figures

Overview

• CFA Institute is the global, not-for-profit member association of

investments professionals that awards the prestigious CFA® designation

• > 100,000 members globally of which 90.000 are charterholders

• 137 member societies worldwide

• CFA Institute works with over 30 educational establishments as CFA

Program Partners in the EMEA region e.g. EBS, Mannheim University,

Oxford University (business school), INSEAD (France) and London

Business School

• CFA Institute was founded in 1947 in Charlottesville, USA



Active bodies in Germany

CFA Institute

• Exams

• Content

• Standards

Stalla/Top-Finance

• CFA Exam Prep Courses

• Materials

German CFA Society e.V.

• Member Relations

• Post CFA EducationalPrograms

• Events

• Candidate Support



Who we are

The organisation• Organised as non-profit association,

managed by professionals and

volunteers, founded in 2000

• Based in Frankfurt, with members

from all over Germany

• Promoting the highest professional

and ethical standards in the

investment industry

• Providing a networking platform for

the investment community as well as

other stakeholders

• www.gcfas.de

The members• The 3rd largest society in the EMEA

region with almost 1.700 members

• Annual member growth ca. 15%

• Members include CFA

Charterholders, candidates registered

with CFA Institute, German

Investment Professionals

• Germany had the second largest CFA

Exam candidate enrolment in the

EMEA region in 2009 and 2010


http://www.gcfas.de/

German CFA Society members

Profile


Agenda






The Global CFA Institute Research

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

professionals

• Top teams are chosen to present to a

panel of experts

• Winning team competes at Regional

Final

21CFA and CFA Institute Research Challenge


2011 Global Champions: Politecnico di Milano



Global IRC Network

2011 participation:

2500+ students

1200+ industry volunteers

546 universities

102 CFA Hosts

79 CFA local level challenges


Investment Research Challenge

2011 IRC Germany Champions: Goethe University


The winning team from Goethe Business School: Sven Lindner, Dominik Jochem, Benjamin Goy, Natalia Nesterenko and their

mentors Christian Roth und Dr. Michael Thomas, CFA. The team was coordinated by Prof. Dr. Andreas Hackethal, Dean and Chair

of Finance, Goethe Business School.

The purpose

Teach best and ethical practices

in equity research through a real-

world experience to the next

generation of investment

professionals


CFA Institute Research

Challenge

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”

– “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…



The Process

Form team

of 3 – 5

students

Mentoring by

an industry

professional

(CFA

charterholder)

Interview

company

management

Write an

equity report

Present to a

panel of

industry

experts

Compete

against the

world’s top

teams



Participating Universities 2011

• Mannheim University

• European Business School

• Goethe Business School

• Hamburg University

• Frankfurt School of Finance



• All teams have to submit an company research report

• These reports are presented to a panel of experts to

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 (2011: Madrid, 2012 tba)



The Timeline

• Mid October 2011 • Universities submit team applications to Society

• Mid November 2011• Teams submit up to 3 questions for the subject company to Society

• End of November 2011• Teams to attend Company presentation in Frankfurt if possible

• Travel expenses will reimbursed

• End of January 2012• Teams submit final reports to Society by 5pm


Exact schedule will

be available in mid

September 2011


The Timeline

• Beg. of February 2012• Local Final held in Frankfurt

• Overall winner announced at Final

• Beg. of March 2012• EMEA Regional Final (2011: Madrid / 2012 tba)

• Beg. of April 2012• Global Final (2011: Omaha, Nebraska, USA / 2012 tba)


Exact schedule will

be available in mid

September 2011

https://lh5.googleusercontent.com/-SObhtgEzch4/TYfyz-wic9I/AAAAAAAAAy4/-GtmUrdD4S8/s1600/buffett2.jpg


The Rules

• Teams:

– 3 – 5 undergraduate or graduate students

– One team per university

• Participating students:

– 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



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

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



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, 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



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 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

– The reports will be submitted under an anonymous team name, e.g. Team A, Team B which is allocated by the Society



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

graders

– If more than 7 universities

participate 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


The 2010/2011 jury of the Investment

Research Challenge Germany consisted of:

• Dr. Matthias Meitner, CFA

• Harald Bareit, CFA

• Sebastian Kordt, CFA

• Helge Axel Müller, CFA

• Falko Hörnicke, CFA


The Rules

• Grading criteria• Section Maximum Score

• Investment Summary 20

• Valuation 20

• Business Description 5

• Other Headings 5

• Industry Overview & Competitive Positioning 15

• Financial Analysis 20

• Investment Risks 15

• Total 100



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&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



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)

– Use of resources (team involvement in presentation and

Q&A)



The Company

• The company will be the same for all teams

• It has to be a small to mid-cap company listed in the

local market

• In 2011 it was Pfeiffer Vacuum, a global market

leader for vacuum pumps

• 2012 will a global leader in sportsware.


http://upload.wikimedia.org/wikipedia/de/3/34/Pfeiffer_Vacuum_Logo.svg

Contact


Susan Spinner, CFA

Managing Director

Kaiserstraße 23

60311 Frankfurt

Phone +49 69 2424 89-50

[email protected]

www.gcfas.de


mailto:[email protected]

http://www.gcfas.de/

the cfa institute research challenge germany...

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