January 30th 2013

1st General Meeting Spring 2013

 

2

Long-term Goals

Education

Discipline

Alpha

Growth

To offer an educational, real-life opportunity for aspiring investment professionals

To adopt policies and procedures characteristic of a professionally managed fund

To create and maintain an alpha generating process that promises safety of capital and a fair return

Personal, career and fund growth

 

3

Annual Club Timeline

- Industry Definition

- Drivers & Risks

- Industry Thesis &

Opportunities

- Identify best &

worst companies

- Relative comparison

- BUY / SELL pitches

- Summer workshop

- Leadership trials

SummerSpring Semester Fall Semester

Industry Analysis Stock Analysis Review and Preparation

Supported by:- Regression analysis- Proprietary student research- Published Street research - Peer-to-peer mentorship

Supported by:- Valuation methodologies- Regression analysis- Published Street research - Peer-to-peer mentorship

Supported by:- Club management- Club resources- Leadership role incentives- Prior research

Maintained Coverage by Investment Management – Constant Re-evaluation

 

4

Roles in the Finance & Investment Club

Generalists Investment Research (IR) President VP Corporate Relations VP Operations

Co-VPs IR Senior Analysts (SA) Junior Analysts (JA)

Investment Management (IM) VP IM Sector Heads (SH) Investment Associates (IA)

Organizing events, communication, general meetings and speakers

Over 150+ members organized by sector; researches investments

Portfolio management; responsible for maintaining investment coverage

Executive Board

Investment Management (IM)

Investment Research (IR)

VP Investment Management 7 Sector Heads & 8 Investment Associates

2 VPs Investment Research 14 Senior Analysts & over 140 Junior Analysts

 

5

Annual Club Timeline: Spring Semester

Source: ‘‘Training Student Equity Analysts and Utilizing their Recommendations in Active Portfolio Management’’ by Scott Stewart

Financial Statements

Fidelity 2-Minute Drill- Bring in Investment Professionals for a one-day stock pitch event

Risks and Sensitivities

Comparables Valuation

Discounted Cash Flow

Company Drivers

Leadership Selection- Replacements are appointed, if needed- Study abroad, “senioritis,” job search likely reasons

Wall St. Trip- Lunch with 30 senior Alumni- Corporate site visits

Maj

or E

vent

sIR

Pro

cess

1

2 4

3

5

1

2Company Presentations- Alumni and faculty judges- Identifying best and worst companies

4

MarchFebruary April January1 2 43 5

1 2 43

3

 

6

Fund Operations & Mechanics: Investment Decisions

Source: ‘‘Training Student Equity Analysts and Utilizing their Recommendations in Active Portfolio Management’’ by Scott Stewart

Step

1:

Step

2:

Step

3:

Formal Stock Pitch to Investment Management- Initial research presented by either IM or IR side- Group-led Q&A and discussion- Industry drivers & company fundamentals questioned- Usually sent for second round of research

Q&A Follow-up (after 7+ days of additional research)- Analyst(s) answer previously unanswered questions- Group-led Q&A and discussion- Investment management team decides whether to repeat Step 2 or to pass onto voting process

Investment Voting Process (after IM team is satisfied)- Held after Investment Management meetings- Occurs when comfortable with fundamental research- Pros and Cons of investment discussed- Investment decision passed onto Advisor

Supported by:- Valuation methodologies- Regression analysis- Proprietary student research- Published Street research

Supported by:- Comfortable understanding of the industry and the company- No rock left unturned

Supported by:- Thorough discussion- Analysis of affect on sector / portfolio beta- Decision by committee

 

7

Directed Study Application The Finance Directed Study program is back

The Course is a guided and intensive version of Finance Club– Industry analysis, company valuation, trends, industry drivers, etc.

Applications are due this Friday at 6pm– Responses will be given over the weekend

Professor Segal, our faculty advisor, leads the program – Richmon Kam will be the TA

The Directed Study participates in the BSAS Competition

The team consists of 5 people, who in the past have been Juniors, but exceptional Sophomores have been considered– Freshmen should also apply to get their name out there…

Please submit a cover letter and resume to richmon.kam@gmail.com

 

8

Fund Updates We are building an alumni board

– 4-6 advisors from the buy-side, with one from the sell-side

– Provide input on fund management, what we should teach and club structure

In 3-4 weeks the Executive Board will be meeting with the Endowment to finalize the $250,000 donation

A full fund update on performance next week

Two new Sector Heads

Chris Kovalik: Consumer

Knut Kirchoff: Industrials

 

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Next General Meeting;Wednesday February 6 @ 5pm in SAR 101

If you want to join a team please come up to the podium so that we can put you in touch with the senior analysts of the sector of your choice