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The Arbor City Community Foundation (ACCF) was a medium-sized endowment established in Illinois in the late 1970s through the hard work of several local families. The vision of the ACCF was to be a comprehensive center for philanthropy in the greater Arbor City region. ACCF had a fund balance (known collectively as "the fund") of just under $240 million. The ACCF board of trustees had appointed a committee to oversee investment decisions relating to the foundation assets. The investment committee, under the guidance of the board, pursued an active risk-management policy for the fund. The committee members were primarily concerned with the volatility and distribution of portfolio returns. They relied on the value-at-risk (VaR) methodology as a measurement of the risk of both short- and mid-term investment losses. In its report for the investment committee, the ACCF risk analytics team recommended the daily VaR at 95% confidence as a measure for short-term risk and reported the corresponding numbers. It is now the task of the investment committee to interpret these figures. The case questions guide the executive students to a critical evaluation of both the reported VaR figures as well as of the VaR methodology.

In December 2009, about a year after it suffered a crisis when clients walked away from massive derivative losses, Gulf Bank’s new CEO is trying to change the governance and operation of Gulf Bank. This case focuses on a turnaround situation and provides students with insight into evolving corporate governance standards in Kuwait. After assessing the situation that the CEO faces, students have to decide what change he should pursue and how he should carry it out. From a broad industry governance perspective, students can examine the state of banking regulation and oversight in Kuwait and suggest ways that corporate governance can be strengthened.

In November 2009, Aidan Quillan and his fellow investors were debating on what to do about their shares in Felix Resources (FLX AU), an Australian coal mining company. Yanzhou Coal Company of China (1171 HK) had been courting Felix for nearly a year, and had made a formal offer on August 13 worth roughly AUD 18 per share, curiously labeled the Scheme, which Felix's board had endorsed. But many stockholders were not really sure the offer was a good one, and the stockholder vote was coming up on December 8. When Yanzhou had first approached Felix in December 2008, the offer had been AUD 20per share. But a lot had changed since then, including the price of coal, the Chinese economy, the value of the Australian dollar, and concerns over Chinese acquisitions of Australian mineral producers. Shareholders, including Aidan Quillan, were now being pressured to accept the Scheme.

The president and founder of the Taiwanese firm Shacom.com plans to set up an insurance scheme for low-income earners. A financial model for the operation has been created and students must assess the viability of the business, its adherence to financial regulations, and the risks that it entails.

The case comprises an interview with Paul Cherry, who as chair of the Accounting Standards Board of Canada (the Canadian accounting standard setter) led a process that brought Canada to adopt international financial reporting standards (IFRS). The case provides a rich and in-depth examination of the real-world considerations that led Canada to adopt IFRS. It offers analysis of the competing alternatives such as the U.S. GAAP (generally accepted accounting principles), describes the consultation process, and sets out the thinking that led to Canada adopting IFRS. The case offers a unique opportunity for students to see a leader in the Canadian accounting profession set out what actually led to the adoption of IFRS.

A recent business graduate decided to contact her former classmates from her value investing course. She emailed them with a proposal to re-evaluate the company they had valued for their final project, National Presto Industries (Presto). Presto was a diversified company operating in three different industries: housewares/small appliances, absorbent products, and defense. The price had dropped about 25 per cent and perhaps it was time to take it off of the group’s “watch list,” as it might now be undervalued and worth purchasing. Presto was initially brought to the group’s attention through a screening process that identified Presto as having a low price to earning value, a high dividend yield, and a small market capitalization. It was unusual in that it was a company that was over 100 years old and operated in stable and unglamorous segments, yet was still considered a growth company. If it was determined that Presto was a good buy, the team also wanted to establish an exit price, but due to a tight concentration of shareholders and low average daily trading volume, the team wondered how this low liquidity would impact the stock’s share price.

Antony Ving had secured the highly coveted analyst position for the Western Investment Club (WIC), a student-controlled organization at the Richard Ivey School of Business that managed over $100,000 according to a disciplined value investing philosophy. He was preparing a presentation on Dun & Bradstreet (DNB) for the next WIC meeting. DNB was a leading provider of information, services, and solutions; it was in the business of selling accumulated information and research to customers interested in due diligence for risk management, expansion, and supply chain management purposes. While DNB had passed the investment committee’s screening, Antony had to delve into the drivers of value to distinguish whether DNB had sufficiently sustainable operating and financial advantages in a sustainable industry to qualify as undervalued. He had to present a comprehensive valuation and strategic analysis on whether DNB was a buy… or a bust.

In the summer of 2008, AQR Capital Management was considering the launch of a new hedge fund strategy. The proposed DELTA portfolio would offer investors exposure to a basket of nine major hedge fund strategies. The DELTA strategy would be innovative in two ways. First, in terms of its structure, AQR would implement these underlying strategies using a well-defined investment process, with the goal being to deliver exposure to a well-diversified portfolio of hedge fund strategies. Second, in terms of its fees, the new DELTA strategy would charge investors relatively lower fees: 1% management fees plus 10% of performance over a cash hurdle (or, alternatively, a management fee of 2% only). This fee structure was low relative to the industry, where 2% management fees plus 20% of performance, often with no hurdle, was standard.

Swedish Match is a profitable smokeless tobacco company with low debt compared to other firms in its industry. The firms CFO now wants to revise the firms conservative financial policy.

On December 22, 2010, the chief executive officer of Al Hilal Bank in the United Arab Emirates was preparing to address a group of international banking executives who were interested in understanding what decisions had contributed to Al Hilal’s success thus far, and what challenges the bank would face in 2011 and beyond. In two and a half years, Al Hilal had developed a respected and fast-growing Islamic bank. The Al Hilal team had combined a foundation of strong corporate governance practices, a strong risk management framework, and an innovative customer service culture. As proof of its success, it had become profitable in the third quarter of 2009, and profits were rising rapidly.

A recent business graduate decided to contact her former classmates from her value investing course. She emailed them with a proposal to re-evaluate the company they had valued for their final project, National Presto Industries (Presto). Presto was a diversified company operating in three different industries: housewares/small appliances, absorbent products, and defense. The price had dropped about 25 per cent and perhaps it was time to take it off of the group's "watch list," as it might now be undervalued and worth purchasing. Presto was initially brought to the group's attention through a screening process that identified Presto as having a low price to earning value, a high dividend yield, and a small market capitalization. It was unusual in that it was a company that was over 100 years old and operated in stable and unglamorous segments, yet was still considered a growth company. If it was determined that Presto was a good buy, the team also wanted to establish an exit price, but due to a tight concentration of shareholders and low average daily trading volume, the team wondered how this low liquidity would impact the stock's share price.

Excel spreadsheet for students.

The established credit raters were criticized for inflating the mortgage credit bubble that imploded in 2008. A new rating agency, KBRA, is considering how to capitalize on the opportunity this presents and how to enter the industry. A small group of managers have to decide on a business model, how to meet hiring and funding needs, and what types of ratings to start with: municipal, corporate, or structured. Where are the needs for new ratings stronger? How can investors be convinced to use the new ratings? How can KBRA compete with Fitch, Moody's, and S&P?

ATR KimEng is a Philippino asset management business. It is making an important decision on its own strategy going forward: should it stay independent, or be taken over by a large bank in the region. Through this case, we disuss the financial service industry in South East Asia, and study the opportunities and challenges presented by the changing global market dynamics.

Bruce Ballantyne had recently joined C.R.P. Products (CRP), a furniture manufacturer in Stratford, Ontario, to help review the company’s operations and assess what changes were necessary to keep up with demand. Although it was early 2011 and the peak season was still four months away, Ballantyne knew that he would have to determine what equipment was needed over the next three weeks to ensure it was delivered and installed before the peak season. Jamie Bailey, the owner of CRP, had also concluded that CRP did not have the financing available for both the new equipment needed to make its unique design of outdoor furniture and the seasonal working capital required to support inventory and accounts receivable. He had turned to Ballantyne to develop a solution that would keep up with demand, keep inventory low, and work within the available financing.

A junior investment analyst at Maple Toronto Fund (the Fund), a “deep-value shop” whose main strategy was to invest in deeply undervalued businesses, was screening hundreds of small-cap stocks and came across HQ Sustainable Maritime Industries Inc. (HQS), an aquaculture and aquatic product processing company that operated in two product segments in China. A quick look at HQS’s financials suggested to the junior investment analyst that he had found the “holy grail” of value investing: a net-net stock. The junior investment analyst knew he had to perform in-depth due diligence to estimate the stock’s intrinsic value and determine whether the stock was truly undervalued. He wondered how to tackle the valuation; in addition to developing a deep understanding of the industry and the company’s business model and numbers, he considered the value-investing-based valuation approach. The junior investment analyst knew that demonstration of thorough analysis and accurate valuation of HQS might convince senior management of the Fund to acquire a substantial stake in HQS. If this investment was profitable, it could boost his career and prospects of advancement within the Fund. The junior investment analyst had one week to put his presentation together.

Business Intelligence Advisors, Inc. (BIA) was an investment research firm that had developed methods to help professional investors discern when CEOs and other executives in publicly traded firms "either lacked confidence in or were conveying less than complete or reliable information" in their public statements. BIA aimed to give its clients a better way of interpreting information provided in analyst calls, media interviews, and other events where executives publicly faced skeptical questions and had to give unscripted answers. BIA's methodology used verbal and nonverbal cues to identify executives who parsed their words too carefully or displayed discomfort with what they were saying. In analyzing the case, students will learn about the role of information in markets-how investors get it, how they process it, and why it matters. The case asks students to evaluate why BIA's methods might work and to analyze how BIA should leverage its approach to build a sustainable business.

No abstract available.

The Ameritor family of mutual funds was nicknamed the "Dead Man Funds" because of its terrible performance and the assumption that those who kept their money in the funds had no choice, that is, they were dead. Established in the 1950s, the funds boasted $200 million in assets under management by 1970. But those numbers quickly dropped to practically nothing by the late 1980s. In 1989, Morningstar Inc. told investors, "We urge you to cut your losses and get out." Expense ratios skyrocketed as high 40 percent per annum, numerous lawsuits were filed by the SEC, and turnover rates hit 400 percent in some years. By 2010, the mutual funds had either been liquidated or went out of business. The case examines the demise of the funds, highlighting the initial outflow of funds as well as the investors who chose not to remove their capital.

Pinpoint Consulting, a multi-billion dollar strategy consulting firm, has been hired by Dart Financial Corporation to provide advice on the potential acquisition of a credit card portfolio. An analyst has the task of building a model and making recommendations. The price is set at $60 million and the analyst must assess whether the portfolio is an attractive opportunity and a suitable fit for Dart Financial.