January 30 th st 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 Summer Spring Semester Fall Semester Industry AnalysisStock AnalysisReview 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 GeneralistsInvestment 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 Major Events IR Process Company Presentations - Alumni and faculty judges - Identifying best and worst companies 4 March February April January

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

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

9 Next General Meeting; Wednesday February 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