Frequently Asked Questions

What does CNID really look for when it says “taking this company private”?

We want you to explain in your analysis whether you think the company that you selected is worth buying and owning as a private asset in a pension fund’s portfolio for the long term.

Does this mean CNID will be the sole investor to take the company private?

For the limited purpose of this challenge, kindly assume that CNID has the capital to take the entire company private. However, practically, there are several partners involved in a private asset transaction.

Do we need to explain the deal structure (e.g. whether the company should be taken private via LBO or ratio of debt-to-equity to finance the transaction)?

No, we are not looking for details of the deal structure. We are interested in knowing, among other things, how you analyze the business model of the company that you selected, its ability to generate cash flows and its ability to maintain an economic moat in its industry. Basically, we are looking for your ability to fundamentally analyze a company from a long-term investment perspective.

What is the investment horizon of investments for the first round?

The investment horizon is long term; approximately ten years.

Can we add appendices to the report to explain our investment model or thesis?

Yes, you can add appendices to the two-pager report to explain your model or thesis, but this is limited to one extra page. This page could include a snapshot of your model (images) without any text or explanations. Key valuation assumptions and forecasts should form a part of the main two-pager report.

What is the grading scheme of the two-pager report for the first round?

Round 1 - Score Card

Categories /Score

Organization /30

  • Presentation is concise and to the point

  • Information presented in logical order

  • Student shows creativity and professionalism

Fundamental Analysis /30

  • The facts presented are correct and relevant to the analysis

  • Key information on the company and the industry have been well described

  • Business model and key revenue/cost drivers are appropriately identified

  • Defensiveness of the cash flow profile

  • Historical financial results snapshot

Investment Thesis /40

  • Investment thesis supported by well-researched fundamental analysis

  • Student identifies direction (improvement/deterioration) of KPIs/key trends over the long term

  • Preliminary valuation analysis is used to ascertain attractiveness of risk/reward

  • Student develops his/her own conclusions and long-term outlook

Will it be the same set of companies for the second round? Do we need to continue working on the same company that we pitched in the first round?

No, the companies in the second round will be an entirely different set of companies.

Can a student receive the mentoring if they already have an internship for summer 2021?


Any recommendation to improve the odds of being selected as a finalist?

Read publicly available documents (company presentation, 10-Q, 10-K) as well as sell-side reports. It also helps to listen to a few recent earnings calls and the most recent investor and analyst day. This should provide a solid foundation for the two-pager analysis. While referring to sell-side reports, we recommend that you use your own thinking and creativity to make a decision instead of blindly relying on and reproducing the recommendation of sell-side reports.

© CN Investment Division 2020

  • LinkedIn - CNID Investment Challenge
  • Facebook - CNID Investment Challenge