CFA INSTITUTE RESEARCH CHALLENGE 2013 Files/CFA...•Any types of buses are allowed •Personal...

CFA INSTITUTE

RESEARCH CHALLENGE

2013

HOSTED BY CZECH CFA SOCIETY

RESEARCH CHALLENGE 2012 WINNERS

CFA Institute is one of the leading, globally recognized organizations in the investment industry. The CFA designation is increasingly understood as a near equivalent of the prestigious MBA in finance.

ABOUT CFA INSTITUTE

CFA Institute mission► Global, not-for-profit association of investment professionals► The mission: “To lead the investment profession globally by setting the highest standards of ethics, education

and professional excellence.”► Administers the Chartered Financial Analyst (CFA) Program and awards the world-wide prestigious CFA designation► www.cfainstitute.org

Current situation► 60+ years tradition► More than 100.000 members from 137 countries across the world and over 200.000 candidates from 167 countries► The membership has grown more than fivefold across the world since 1990, when CFA Institute had 15.000 members

mostly in the US► Growing membership in Asia and Europe in particular► Headquarters in Charlottesville, representative offices in Hong Kong, London and New York

About CFA Program► The CFA Program is understood as a benchmark of the highest professional excellence and ethical standards on a global basis► The CFA designation is one of the most prestigious and respected designation in the investment and financial industry globally► Described by the Economist as “the gold standard” and as a “passport to a career in international finance” by the Financial Times► To earn the CFA charter: successful pass of three exams during the minimum of three years, four years of relevant work experience

and adherence to strict ethical standards is necessary; only 1/5 of enrolled candidates completes the program (excluding no-shows)► Topics examined include ethics and standards of professional conduct, investment analysis and valuation, economics and portfolio

management► More than 95.000 investment professionals have earned the CFA Charter since 1963

CFA Institute is one of the leading, globally recognized organizations in the investment industry. The CFA designation is increasingly understood as a near equivalent of the prestigious MBA in finance.

ABOUT CZECH CFA SOCIETY

Czech CFA Society► Non-profit organization, the 113th member society of CFA Institute; winner of CFA Institute 2009 Revitalization Award► Successfully serving CFA charterholders and CFA Program candidates locally since May 2002► Promoting the highest professional and ethical standards in the Czech investment industry► Providing a networking platform for the financial community in the Czech Republic► www.czechcfa.cz

Members’ profile► Over 120 members and over 400 registered candidates* ► Candidates typically at entry-level position to investment banking industry, CFA charterholders hold mid to senior level executive

positions

Czech CFA Society Board of Directors► Marek Jindra, CFA, FCCA, President – Partner at Ernst & Young► Jan Brázda, CFA, Vice-president – Senior Manager at PricewaterhouseCoopers► Lubomír Vystavel, CFA, Member – Director and Head of Equity Markets at ING Commercial Banking► Jana Jandová, CFA, Member – Manager at Deloitte► Matej Turek, CFA, Member – Manager at Ernst & Young► Martin Fisher, CFA, Member - Trader► Olga Kuiper, Member – previously Senior Relationship Manager at Citibank► Executive Director: Petra Roberts, CFA – Regulatory Compliance Consultant and Managing Partner at Roberts & Co

* Data as of July 2012. Registered candidates are those candidates who have registered for the CFA Program but who may not be currently enrolled for an upcoming exam

We have a solid track record in reaching our target community and organizing high profile events.

CFA INSTITUTE RESEARCH CHALLENGE

HOSTED BY CZECH CFA SOCIETY

In order to promote best practices in equity research and company analysis,students will get a chance to research, analyze, and report on a listed companyas if they are practicing analysts.

Unique opportunity for studentsThe challenge gathers students, investment industry professionals, publicly traded companies, and corporate sponsors together for a real world competition.An existing European listed company will provide presentation and their investment department will be available for the ‘analysts calls’.

Top Czech investment professionals involvedCzech CFA society’s members being top Czech investment professionals will be grading the research reports and evaluate the presentations. Further, each team of 3-5 students will be assigned a mentor, CFA Charterholder.

Not just an exerciseAdditionally, all participants are introduced to and held to the standard of the CFA Institute Code of Ethics and Standards of Professional Conduct.

* INVESTMENT RESEARCH CHALLENGE® is the registered trademarks of CFA Institute in many countries around the world


PHASES AND TIMELINE

The Investment Research Challenge 2013 will stretch over the entire winter semester so that there is enough time available for the teamsto prepare a ‘perfect’ report:

Kick off presentation for students Wed 10 October, 19.30-21.00Preliminary (VŠE only) Wed 24 October, 19.30-21.00Teams selected by the participating institutions & student registration end of OctoberTeams orientation Wed 7 November, 19.30-21.00Teams meet with mentors NovemberTimelines, Subject Companies & Universities Due 19 OctoberSubject company presentation NovemberInitial analyses, teams prepare and submit Qs to company NovemberQ&A session/analyst calls, 2nd meeting with mentors NovemberDraft reports submission to mentors, opt. 3rd meeting with mentors DecemberWritten reports due DecemberGrading of reports, panel presentations preparation JanuaryTeams presentations and winner announced FebruaryVolunteer Registration Complete 15 MarchLocal Final Complete 15 MarchEMEA Regional Final 10-11 AprilReceipts/Invoices Due 30 April


TARGET COMPANY

AVG Technologies N.V.

AVG Technologies provides software and online services. The Company is primarily engaged in the development and sale of Internet security software and online service solutions branded under the AVG name. The Company’s solutions include software and online services, include security, personal computer (PC) management, online backup and other products.

As of December 31, 2011, the Company had approximately 15 million subscription users.

The Company competes with Microsoft, Google, Apple, Symantec, Avast! And other companies.

The subject company will make a presentation to students for the purposes of this educational exercise (beginning November), and participate in Q&A following the presentation (end of November).

Each team will prepare five questions for subject company management before the Q&A session, and submit these to the Administrator. Students will be allowed to ask the subject company additional questions during the Q&A session.

Teams may not contact the Subject Company for the purposes of the CFA Institute Research Challenge other than the informational session, the question-and-answer session, and the one permitted follow-up communication.

The target company will is major player listed on the New York Stock Exchange


CZECH TOP INVESTMENT PROFESSIONALSINVOLVEDThe quality of the Challenge will be guaranteed not only by the professional standards of the CFA Institute and the Czech CFA Society Board members but most of all by a selected group of leading Czech investment community practitioners.

Mentors

The mentors will be professionals that will assist by discussions the teams in their research process, including preparation for the analyst calls and report writing. Mentors must be CFA charterholders.

Graders and Panelists

Graders and Panelist, recruited from the Czech CFA Society membership, represent senior investment and analytical professionals, well known in the Czech republic.


TOP CZECH INVESTMENT PROFESSIONALS INVOLVED

2012 MentorsKarel Tregler, PPFMichal Mišun, RedbaenkJan Hájek, CFA, IS CSMiroslav Kuběnka, CFA, Generali PPFDan Karpíšek, CFA, KBTomáš Krsička, CFA, Glisco

2012 PanelistsPavel Cyrani, CEZDaniel Prager, TelefonicaJiří Beneš, CFA, 3TSLubomír Vystavěl, CFA, INGJiří Hnilica, VSERoman Florián, CFA, J&T BankaMarek Janča, EPHPetr Sosík, CFA, Allianz

2012 GradersJan Vejmělek, CFA, KBMiroslav Fliega, CFA, Citibank (R)Jaroslav Trojan, Credo VenturesFilip Mach, CitibankMartin Fischer, CFA, TraderMilan Jalový, EPH

Academic PartnerJiří Hnilica, VSE Praha


PRIZES FOR WINNERS

The most important reward for the winning team will be the experience of successfully completing the challenge as the best team. Nevertheless, in line with the mission of the Czech CFA Society, we would like to award the winners with the following prizes:

Invitation for the EMEA Regional final in LondonThe winning team will get a chance to compete with other EMEA IRC winners, this year in London. If they succeed they may proceed to the global final in London.

Material prizes from sponsorsThe winning team will receive material prizes from sponsors.


ORGANISING COMMITTEE AND BASIC RULES

The CFA Institute Investment Research Challenge is governed by the rules approved by the CFA Institute. Local organizing committee, appointed by the Czech CFA Society Board of Directors, includes:

Marek Jindra, CFA, FCCA – Czech CFA Society, President

Matěj Turek, CFA, FCCA – Czech CFA Society, Board Member, University Outreach

Petra Roberts, CFA – Czech CFA Society, Executive Director

Jiří Hnilica – VSE Praha, Vice-dean for academic affairs, CEMS Academic Director

High ethical standardsEthical approach to the entire investment process is a cornerstone to the CFA idea and the Czech CFA Society will

require all the participants to attain the same ethical level.

Rules publicly availableThe detailed rules will be published on the web pages of the Czech CFA Society from the beginning of the registration

phase.


PARTICIPATING INSTITUTIONS – LOCAL ROUND

The following institutions were invited to participate in the local round of IRC 2013:

University of Economics, PragueJiří Hnilica – Associate Professor, Vice-Dean for Academic Affairs, CEMS Academic Director

Institute of Economic Studies, Charles University, PragueJiří Novák – Assistant Professor, Boston Consulting Group Corporate Chair

University of New York, PragueTanweer Ali, Lecturer

Masaryk University, BrnoDagmar Linnertová – Faculty of Economics and Administration

Anglo-American University, PragueKatarina Svitkova – Dean, School of Business Administration

VSB-TU Technical University, OstravaKateřina Kořená – Assistant Professor, Department of Finance

CERGE-EIRichard Stock – Program Director of MA in Applied Economics


HOW TO REGISTER

The registration process will be administered by each participating institution.

Qualifying conditions• The teams will consist of no less than three and no more than five members.• All team members are students of the participating institutions enrolled

for the academic year 2012/2013 in either undergraduate or graduate programs• Teams are selected at discretion of the participating institutions, typically by assessing

their motivation letters but they may apply other criteria.• Participants have to sign a Release letter

Team representative or individual applicants will send an email registration to designated contacts at each participating institution cc: [email protected] by end of October 2011. The application shall include for each team member:

• Name, address, email contact, mobile nr.• Semester of study, faculty, major• Brief resume• Optional if required by the university: a letter of motivation (up to A4)

All team representatives or individual applicants will be notified by email by 7 November 11


MATERIAL SUPPORT TO THE STUDENTS TEAMS

Travel & accommodation costs for students from non-PRG institutions will be reimbursed.Travel expenses

• The outward trip of the ticket has to be on the date (or prior day) of the company presentation, mentors meeting(s) (max. 2x), the final presentation and the Forecasting dinner.

• Trains should be booked in 2nd class, all train categories (incl. SC/IC/EC/R) are allowed• Any types of buses are allowed• Personal cars’ use will be reimbursed at CZK 5.00/km, up to the maximum of the sum of equivalent bus/train tickets

for the participants travelling together (as if booked reasonably in advance)• If single ticket or return ticket price exceeded CZK600 or CZK1,200 per person respectively, it needs to be approved

upfront by CCFAS (at [email protected], cc: [email protected], )

Accommodation• Accommodation will be arranged for the participants on the night following the final presentation in rooms for two or

three

All the costs will be reimbursed in cash right before the final presentation or by bank transfer to the team representatives afterwards, if preferred by the team. Expenses shall be summarized in excel format (form attached) and submitted 3 days before.


PRESENTATION OF WINNERS ON CFA FORECASTING DINNER IN CNB


RULES - EXTRACT

Teams

• There can be no alternates. Number of team members cannot drop below 3 otherwise the team will be disqualified.

• Students may not have been or currently be employed in a role whose primary duty involves fundamental company

analysis; with the exception of students who have had an internship in that function for six months or less

(cumulatively).

• CFA Charterholders are not eligible to participate on Investment Research Challenge teams.

• Students must be enrolled in the current term at the university at the time of the local Challenge final.

• Students must disclose any ownership position in the securities of the subject company.

• Students must confirm that their participation in the Challenge does not represent a conflict of interest.


RULES - EXTRACT

Company

• The subject company will make a presentation to students for the purposes of this educational exercise, and

participate in Q&A following the presentation. The teams' direct contact with the subject company will be limited to

this meeting, plus one follow-up contact.

• The subject company will not present any information to students that is not within the public domain.

• Each team will prepare five questions for subject company management before the meeting, and submit these to the

Administrator. Management will take these questions under advisement when preparing their remarks, but is not

required to cover each question within their presentation. Students will be allowed to ask the subject company

additional questions during the Q&A session of the presentation.


RULES - EXTRACT

Research Process• Students may use only publicly available information to conduct their research, and must confine the information in

their written reports and oral presentations to publicly available information.

• Contact with the subject company will be limited to the company presentation and one follow-up

• Teams may use their mentors as resources, but may not enlist the help of any other investment industry

professionals in conducting their research or writing their reports.

• PLAGIARISM WILL RESULT IN AN IMMEDEATE DISQUALIFICATION. ALL SOURCES HAVE TO

BE REFERRENCED, SEVERE PENALTIES WILL APPLY IF TEAMS WILL FAIL TO DO SO.

Primary Research• When conducting primary research, students must identify themselves as students and disclose their involvement

in the Investment Research Challenge.

• Teams may contact the subject company’s customers, competitors and suppliers. They must confine their

conversations to corporate officers who normally interact with investors, such IR officers, CEO’s or CFO’s. Any

other entity must be approved by the Society.

• Teams must submit their questions to a mentor prior to any calls.


RULES - EXTRACT

Mentors• Student contact will be limited to a maximum of 3 face-to-face meetings with their mentors, not to exceed 6 hours

total, prior to submitting the written report. The above-referenced phone call(s) to conduct primary research, and any

additional contact (i.e. e-mail, telephone), are included in these 6 hours.

• 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.

• Mentors may not contact the subject company, or any of its affiliates, distributors, suppliers or competitors within the

context of the Challenge, with the exception of supervising the student contacts.

• Mentors may not participate in the company presentation. If they are allowed by the local society to be present, it is

only in a supervisory role, to ensure that no material non-public information is discussed. Mentors may not ask any

questions to or provide any opinions of the company. Attendance at the company presentation in this capacity will

not count toward the 6 hour maximum.


RULES - EXTRACT

Reports

• Reports must conform to the format of the Investment Research Challenge Template, and be reproduced on

standard-sized paper.

• Reports should not exceed 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.

Presentations

• Each team 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.

• The presentations and Q&A will be timed, and teams may not exceed the time allotted.


RULES - EXTRACT

Assessment

• Assessment will be based on the written reports referenced above.

• The written reports will be assessed by a team of graders selected by the Society. Grading will consist of a blind

process in which the identity of the teams is not known to the graders.

• All teams will make an oral presentation of their research to a panel of experts selected by the Society.

• A winner will be selected based on the combined scores received for the written reports and the oral presentations.

The scores will be weighted 50% for the written report and 50% for the oral presentation.

• In the event of a tie, the team receiving the highest score on the presentation will be the winner.


RULES - EXTRACT

Graders

• Each Grader will assess each report to ensure that the assessment is consistent across all reports.

• Graders will be asked to provide short comments to the different sections of each report to serve as constructive

feedback for the students.

Panelists

• Panelists may be at the same time also graders.

• Panelists may be provided with copies of the written reports prior to the panel presentations for reference; however,

panelists will base their scores on the oral presentation only.

Organizing the IRC would not be possible without our corporate partners.

Local IRC Sponsor

Main Society Sponsor Society sponsor Society Partner


SUPPORTING COMPANIES


KEY CONTACTS

Registrationand questions : [email protected]

Universities : VSE Praha – [email protected] UK - [email protected] – [email protected] Brno – [email protected] Praha - [email protected] Ostrava – [email protected] - [email protected]

Organization and CFA related Qs : [email protected]@czechcfa.cz

Web pages : www.cfainstitute.orgwww.czechcfa.cz

Czech CFA Societyc/o Ernst & Young, s.r.o.Karlovo nam. 10120 00 Praha 2Czech Republic

Mobile: +420 603 489 663E-mail: [email protected]

WE ARE LOOKING FORWARD

TO SEE YOU IN

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