02 April 2012

“I would define the CFA Research Challenge as one of my most exciting, learning experiences from MBA program at HEC Paris. This topic comes to my mind everytime I think of my MBA during the fundamental phase, and I am very happy to share this experience with everybody here. The official description of the CFA Institute Research Challenge can be found at the end of this blog post, however I would like to share my own impressions.
It was the end of September when the Finance Club leadership team announced that there was going to be a competition organized by CFA institute and that HEC was looking to enter. The objective of the competition was to write an analyst sell-side report on the French company selected by the CFA Organization. I was attracted to the competition as I really wanted to learn more about financial industry and the proper way a report should be done.

After organizing a team of 5 people (4 MBA students: Antoine Cossart, Stephane Quenet, Elli Suzuki and myself, and 1 student from Masters in International Finance Stanley Yeung) – we attended a kick-off meeting where we found out the name of the company – GROUPE SEB. As I am not French and the company is French, I had not heard of them before. But when my French team-members told me that this company owns international brands such as Tefal, Krups, Moulinex and Rowenta, it became obvious that our research would be interesting. Moreover it appeared that the L’Universite Lille 2 had won this competition over the last 4 consecutive years, and that put some pressure on us. But that was only the beginning…

In fact the research and the competition itself exceeded all of our expectations. On the one hand, we had very intense compulsory studies and on the other, we had to find time to work on the report. So the efficiency level we needed and the effort per hour to put into it was huge from all of the team members. And we were all very different – 5 different nationalities, different characters, different previous work and non-work experience, different skills, different time-schedules and different other commitments and different time-zones during the Christmas break, we nevertheless made this huge diversity our strong competitive advantage.

The mentor from BNP Paribas who was assigned to guide us, Norberto Cordisco, helped us to start actually working. When the input information from the kick-off meeting is just a company’s name and format of the report, and none of us has ever written this kind of report, to understand just what to start with and how to split the workload was essential. But we had a great team and everybody was willing to learn.
I do not have to mention that I would never expect that just by researching one company you almost memorize any corporate finance book: industry and business analysis, financial analysis, modeling and valuation, risks etc . We submitted the report on January 2nd , and we finalized it only on January 1st! Great start to the New Year. One month later, we received an invitation to the French National final. Out of 12 teams only 4 were invited to present their reports. So we had only 2 weeks to make a presentation, write a speech and to defend our hold position of the stock which performed extremely well during the last 10 years. Not an easy task I should say.
Deciding whether you should buy, hold or sell the stock of the company you already very much like, writing a report and making it coherent, compiling a pitching presentation, writing and trying to squeeze the speech in only 10 minutes, memorizing the speech and trying to guess what questions you might be asked at Q&A session, rehearsing the speech 100 times to yourself and presenting your research in front of the panel of senior investment analysts and equity research directors – just to name a few of the challenges our team faced.
We managed to get ready 4 days before the presentation and asked for the feedback our 2 corporate finance professors: Pascal Quiry and Yann LeFur. We really appreciated that they both not only devoted a substantial amount of their precious time to actually read the 10-page report and look through all the additional 16 pages of appendixes, but also they separately listened to our presentation and discussed with us how we can improve it.
And the result was rewarding – we won the French Final. In fact, HEC won the French level for the first time this year and that was a great achievement for us. Needless to say that it was not the presentation itself but mainly Q&A session that was a decisive factor for a winning team. Here you can really make a difference by answering the questions about the French company in France. And YES, we made that difference!
That was however not the case with the EMEA Final in London. For the London competition we would have to compete with 23 other national winning teams from 23 countries. And as by March 15th – the date of the competition – we had already known the actual 2011 numbers of the company performance, we had to do some homework on not only presenting the French company to European judges but also to update all the data and valuation model for the actual 2011 results. And of course, we rehearsed again and presented to our 2 corporate finance professors again.
The event in London itself was really well organized – everybody in the same hotel, 2 days of networking, different speakers presentations and a competition of course. At 7pm on the 2nd day we knew a winning team who would go to Global Final in New York in April – it was Stockholm School of Economy. Good job guys!!!
Of course it was kind of sad that we did not win but we left the event with the feeling of being proud to have represented France in CFA Challenge in London. It was 6 months of work, we advanced to EMEA Regional Finals, we presented a strong recommendation and the presentation was one of the team’s best performances. And we also greatly enjoyed the learning experience and the teamwork experience. With lots of challenges we had, I am very glad I had this chance and opportunity to participate, to learn and experience it.
Time to pass to the next HEC team in CFA IR Challenge – the bar is high, but I believe next team will make it. And the experience and learning are definitely worth all the difficulties and efforts.”

Olga Malovetskaya, member of HEC team in CFA IRC, MBA participant, Class 2013

CFA Institute member societies host and launch local competitions involving teams of three to five business or finance students (graduate or undergraduate) from participating universities. Mentored by senior professionals, each team researches and prepares an investment recommendation based on analysis of a local publicly traded company. The teams’ findings are then presented at the local event and are evaluated by a panel of high-profile heads of research, portfolio managers and chief investment officers. The local winners advance to regional competitions in Americas, Asia Pacific and EMEA, and the winners of those events travel to compete in the global final.

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