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On February 20, 2020, the executive vice-president and chief financial officer of Input Capital Corporation, the first agricultural commodity streaming company in Canada, was reviewing a capital stream contract that one of his associates had prepared for Sustainable Farms Inc. and submitted for his approval. One important consideration was the rate of return expected from the contract and the risks involved. The executive called a co-op student to his office and assigned her the task of calculating the internal rate of return, or effective yield, on this capital stream contract. He also hinted at an alternative way to assess the profitability of the contract, which was to estimate the contract’s mark-to-market value.

This case focuses on the entrepreneurial journey of Sino Suisse Pte Ltd, an external asset manager (EAM) in Singapore. This case is motivated by three observations: (1) the ability of Sino Suisse to rise rapidly from failure in a short span of 3 years to achieve an asset under management (AUM) of US$ 4 billion, (2) the strong conviction of the founder in the "triple-wins" positioning of the EAM business model, and (3) the use of technology to maintain a lean organizational structure. The case examines the motivations of Mr Albert Liu, founder of Sino Suisse, in switching from a salaried employee in private banking to an entrepreneur in 2017. It goes on to explore the entrepreneurship lessons learnt by Liu. The case further presents the business and revenue models of a typical EAM and the value propositions of the EAM model to high net worth clients. It illustrates the "three-win" positioning of an EAM espoused by Liu and continues with the differentiating value propositions of Sino Suisse to clients, which includes, • an open architecture with access to products, pricings and markets from multiple private banks and investment banks, • an aggregator platform called the "Happy Alliance" which allows other EAMs to participate in idea generation and sharing of best practices, new products and ideas via various channels including seminars, online forum, and events, • an exclusive business network called the "Hippo Club" where ultra-high net worth clients of Sino Suisse can source for direct investment deals and philanthropic ideas, among the members. Finally, the case prompts the reader to analyze a key concern of Liu, namely the risk of a negative externality on Sino Suisse from a reputational loss in the broader EAM industry, and brainstorm ways to mitigate this risk for Sino Suisse and the broader EAM sector.

Special purpose acquisition companies, or SPACs, have been around in various forms for decades, but during the past two years they've taken off in the United States. In 2019, 59 were created, with $13 billion invested; in 2020, 247 were created, with $80 billion invested; and in the first quarter of 2021 alone, 295 were created, with $96 billion invested. In 2020, SPACs accounted for more than 50% of new publicly listed U.S. companies. SPACs are publicly traded corporations formed with the sole purpose of effecting a merger with a privately held business to enable it to go public. Compared with traditional IPOs, SPACs often offer targets higher valuations, greater speed to capital, lower fees, and fewer regulatory demands. Despite the investor euphoria, however, not all SPACs will find high-performing targets, and some will fail. Many investors will lose money. As an investment option they have improved dramatically, especially over the past year, but the market remains volatile. More changes are sure to come, which means that sponsors, investors, and targets must keep informed and vigilant. This article is not a blanket endorsement of SPACs. It is simply a guide for businesspeople considering a move into this rapidly evolving (and for many, unfamiliar) territory.

This decision-based case developed from primary sources utilizes disguised names, but actual data to afford students the opportunity to evaluate and suggest options regarding the financial implications of varying the timing of retirement. Leon and Billie Reynolds have asked their daughter, Lexie, to review their retirement planning. The couple had accumulated almost $2,000,000 in investments. The case gives the couple's net worth, current salaries, insights into their spending habits, possible retirement points, family situation, and current allocations of their retirement funds. The case asks students to apply his or her financial planning skills to review the implications of the timing of the couple's retirement.

This case examines modern endowment investment management through the lens of a leadership transition between Chief Investment Officers (CIOs). In March 2021, Paula Volent is about to step down as the CIO of the endowment of Bowdoin College after twenty-one years, and is preparing to meet with her successor, Niles Bryant, to plan for the transition. Under Volent's leadership, the endowment has grown from about $433 million to almost $1.8 billion while providing the college a consistent annual payout of between 4% and 5% of the value of the endowment to fund its operations. While returns have been exceptional under Volent's leadership (as compared for example to most other college and university endowments), she is acutely aware of the challenges ahead driven by capital markets conditions, including the persistently low level of real and nominal interest rates relative to history, high equity valuations, and the flow of assets into alternative asset classes. At the same time, colleges such as Bowdoin have become increasingly reliant on endowments in order to be able to offer admission to the best students, regardless of their financial situation, as well as compensation and research budgets to attract the best faculty in a highly competitive environment. Without the support of a growing endowment, this cost inflation would require significant tuition increases and quite possibly cuts to financial aid. The case offers students ample opportunities to examine the link between the financial needs of an investor ("liabilities") and its assets, and to analyze how this translates into effective investment risk management, liquidity management, return targets and the tradeoff between risk and return, and portfolio structuring decisions. The case also provides opportunities to examine performance evaluation as well as strategies for manager selection in an actively managed portfolio.

The Canada Pension Plan Investment Board (CPPIB) is one of the largest pools of investment capital in the world and follows a rigorous "Total Portfolio Framework" in its approach to investment management. In April of 2021, John Graham was just two months into his role as Chief Executive Officer, and he must decide how to lead the organization to outperform the increasingly competitive market. CPPIB had several structural and developed competitive advantages, but with assets under management projected to grow to C$1 trillion by 2030, Graham faced the challenge of scaling the organization's investment strategy for the future. As Graham settled into the chief executive's role, would he be able to lead CPPIB to meet its strategic goals?

The case explores the momentum investment strategy of AlphaArchitect, a boutique asset management firm. The protagonist, Wes Grey the CEO of AlphaArchitect, is preparing a potential client presentation for Lochen Capital, a multi-family office. Lochen has traditionally focused on value-investing and as a result the presentation needs to compare and contrast the two styles. The case introduces students to the simplest of quantitative investing strategies, momentum. Additionally, students explore AlphaArchitect's approach to implementing the theoretical momentum strategy in practice through their ETF product.

The case examines the short selling of GameStop by hedge fund Citron Capital. The valuation case for short selling GameStop is explored, along with the actual market mechanics of short selling a stock (i.e., rebate rates, securities lending collateral, and loan recalls). In addition to the costs, additional risks of short selling, including the potential for a short squeeze, are introduced.

Cantaloupe Systems expected to celebrate its first quarterly profit, and the company's proprietary machine-to-machine communication technology was a hit with owners of vending machines-and investors. Cantaloupe's systems provided real-time sales data, allowing vending machine operators to efficiently pre-pack the exact items needed for each machine before leaving the warehouse that day. But Cantaloupe's auditors threw the company a curve ball during a routine audit, insisting that the revenue recognition policy be changed in a way which would significantly reduce Cantaloupe's revenue growth and profit. Cantaloupe's leaders felt blindsided by this change in revenue recognition-wasn't their current accounting policy a more accurate picture of the firm's economic activities? Most importantly, they wondered how a change in revenue recognition would affect investors' valuation of the company and the incentives of their sales force as well as other aspects of their operations.

The case introduces IPOs in Hong Kong from the perspectives of both issuers and investors. Hong Kong was a popular choice among many local and nonlocal companies for listing. It ranked as first globally in terms of total proceeds raised for 5 out of 10 years between 2011 and 2020. The case is set in the fourth quarter of 2020, when the Ant Group entered Hong Kong for its IPO. Students take on the role of Lin Wong, head of the investment team of a new investment fund under Next Capital Investment Limited. Students have the opportunity to learn about IPOs from various perspectives: as pre-IPO investors in a fund's investment that is ready to go public, as retail investors to subscribe for high-profile IPOs in the market, and as potential cornerstone investors to subscribe for a portion in the global offering of an IPO.

In February 2020, Pan-China Consulting Services Co. Ltd. (Pan-China) was entering its third decade in operation. Pan-China's founder was reviewing the firm's evolution and discussing several key opportunities with his team. Over the previous two decades, the company had shown solid performance in providing financial and capital markets advice to over 200 companies. It had generated strong returns for its key investors, who ensured that every deal was financially secured by the company's auditing, financial, and consulting expertise. However, the founder and his two senior advisers had to make some decisions. Should Pan-China participate in a new round of private placement investment? Should it consider investing in a second opportunity? Which fund issuance would be the best fit for Pan-China? Was its consulting and investment business model sustainable?

In February 2020, Pan-China Consulting Services Co. Ltd. (Pan-China) was entering its third decade in operation. Pan-China’s founder was reviewing the firm’s evolution and discussing several key opportunities with his team. Over the previous two decades, the company had shown solid performance in providing financial and capital markets advice to over 200 companies. It had generated strong returns for its key investors, who ensured that every deal was financially secured by the company’s auditing, financial, and consulting expertise. However, the founder and his two senior advisers had to make some decisions. Should Pan-China participate in a new round of private placement investment? Should it consider investing in a second opportunity? Which fund issuance would be the best fit for Pan-China? Was its consulting and investment business model sustainable?

After climbing the ranks among Kenya's financial institutions from 66th to 1st, and toppling a quarter of the market share held by mobile money giant Safaricom, CEO James Mwangi must now guide Equity Bank into its next stage of development beyond "Equity 3.0." Should he continue to chip away at the substantial hold Safaricom still has over the industry, or should he branch out into completely new areas that the company has never dealt with before? The former would mean a long and grueling fight, but the latter could spell disaster if fresh ventures go awry. Is the company's innovative approach on its homefield evidence of a deeper penchant for ingenuity overall, or was Mwangi simply in the right place at the right time with its landmark MVNO Equitel?

In this technical note, we examine the concept of diversification and the tradeoff between risk and return in portfolio theory. The note includes a general introduction to normal distribution, then applies it to portfolio theory by examining normal distribution of future return and risk. The note also examines formulas for calculating expected returns of various two-asset portfolios and applies these formulas to investment decision-making. Finally, it touches on errors of inference, including survivorship bias and statistical concerns around skewness or excess kurtosis.

This case is written from the perspective of a decision-maker at a private equity investment fund. The case is set in India, where a large corpus of capital sourced from the United States was deployed from the early 2000s onwards. It looks at the manner in which a private equity real estate fund evaluates the implications of RERA in India, in particular, the continuation vs. exit decision when a project encounters obstacles that delay its completion.

Just before Warren Buffett's company, Berkshire Hathaway Inc, acquired H. J. Heinz Company on February 14, 2013, rumors had been circulating that the Omaha investing oracle had set eyes on the condiment giant. By the time the official acquisition was announced, questions had arisen about some unusual trading activity in financial markets. A very profitable trade was made on the option market just a few days before the announcement: a $90,000 trade that resulted in profits of around $1.8 million. The case puts students in the shoes of a fictional SEC analyst in charge of investigating rumors of insider trading in the context of Berkshire Hathaway's acquisition of Heinz. Which market would an informed investor with limited capital choose? Which option contract would the insider choose, and why? The case allows the instructor to introduce option "Greeks," measures of sensitivity of option contracts to underlying risk factors. The Greeks are presented in an intuitive fashion, and the analysis provides an applied, true-to-life setting to a topic that students often consider very abstract.

Spreadsheet Supplement for Case UV8265

In January 2020, the chief executive officer of the family-run business Scak Textiles LLP (Scak), based in India, was thinking about how the company could achieve a new milestone of ₹500 million in revenue by 2025. He wondered why the company, after coming so far, could not achieve that number with a sustainable margin. What else could he do to help Scak reached this target, and how could he solve the bottleneck of resource constraints?<br><br>The bright next-generation entrepreneurs of the family were taking an active interest in the business and had strategic plans for enhancing the effectiveness of both business and revenue models while navigating the ever-changing business ecosystem. The promoters of Scak wanted an outline of the entrepreneurs' recommendations with adequate assumptions and a business valuation. The promoters would expect a 15 per cent return on additional capital invested; the corporate tax rate would be 30 per cent. The next-generation family members saw three possible options: add manufacturing operations, establish e-commerce platforms for business-to-business and business-to-consumer businesses, or enter the business of exporting. Could they take up all three options, or should they maintain the status quo? The value and future of Scak would depend on their decision.