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The Chartered Alternative Investment Analysts' Program
Updated Oct 2009
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The Chartered Alternative Investment Analyst program provides a broad-based curriculum in alternative investments. The program covers the main areas of hedge funds, private equity, commodities, real estate, and managed futures. The curriculum provides breadth and depth by placing an emphasis on foundations in the Level I program, then by building applications in portfolio settings, asset allocation and risk management at Level II.
Split into 2 levels, the CAIA is the most costly out of the general investment designations covered, but will undoubtedly suit a number of individuals who are interested in pursuing careers in private equity, real estate and hedge funds.
Duration of Program: 2 Years
Cost of Program: $1,300 for level I and $900 for level II (early), $400 enrollment, $250 annual membership
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The CAIA examinations are offered semi-annually, giving candidates the opportunity to complete the CAIA program within a single year. The exams are administered by computer at testing centers around the world.
Level I
The Level I exam lasts 4 hours, with an optional 30-minute break between Sections 1 and 2. The exam is composed of 200 multiple-choice questions. Section 1 and Section 2 each contain 100 multiple-choice questions, and candidates are given 2 hours to complete each section.
The Level I curriculum* is broadly divided into two sections: quantitative methods and an introduction to alternative investments. Candidates study the application of basic analytical tools, as well as the fundamentals of alternative investment vehicles. Candidates learn to differentiate between the various AI trading strategies and performance measurements. Candidates registered for the program are assumed to have an elementary undergraduate understanding of the basic concepts of traditional finance.
All CAIA candidates are assumed to have an understanding of the prerequisite material, and candidates can expect to incorporate the prerequisite material into Level I and Level II examination questions. For further information on the Prerequisite Program and Study Guides, please visit the prerequisites page.
Returning candidates should be aware the Prerequisite Program has been expanded.
The Level I curriculum covers such areas as
- quantitative analysis,
- regulatory frameworks,
- trading strategies,
- performance measurement, and
- credit derivatives.
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Level II
The Level II exam is 3.5 hours, with an optional 30-minute break between Sections 1 and 2. Both exams allow candidates to review their responses and offer feedback.The Level II exam is composed of both multiple-choice and essay questions. Section 1 contains 100 multiple-choice questions, while Section 2 asks candidates to answer several essay questions. These require typed responses, generally no longer than one to two paragraphs. Candidates are given 2 hours to complete Section 1 and 1.5 hours to complete Section 2.
The Level II curriculum* is also broadly divided into two sections: alternative investments and Current and Integrated Topics. Both sections take a global perspective. Candidates must apply the skills and knowledge from Level I to gain a deeper understanding of issues involved in each of the areas of alternative investments. Current and Integrated Topics is updated annually to reflect the latest industry and research developments, such as new products and advances in risk management techniques.
The Level II curriculum covers such areas as
- asset allocation,
- portfolio management,
- style analysis,
- risk management,
- structured products,
- indexation and benchmarking, and
- current topics and case analyses.
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*Candidates should be aware that key equations are no longer provided in the Study Guide and will not be provided on the exam. This is an outgrowth of the new curriculum and the use of original reading materials developed by CAIA. All equations in the readings are important to understand.
A variety of topics are covered as part of the CAIA program, including aspects which are found in the FRM, PRMIA and CFA examinations, and notably, we see a strong emphasis on the AIMR Standards of Professional Conduct, reflecting a solid foundation of ethics for the alternative investments industry. The joint sponsorship between the AIMA and the CISDM represents a strong industry focused approach which is likely to play an important role in the expansion of this designation.
Suitability:
AIMA notes that the CAIA designation is suitable "..to hedge fund managers, managed futures advisors, real estate, private equity and venture capital managers, institutional investors, and other professionals in the area of alternative investments".
Since the program was first started in 2002, there are now about 2,000 enrollments to the program annually - representing a doubling of candidates each year. The majority of candidates have between 5-10 years of work experience, and based on the topics which are covered within the program, and unlike the CFA, FRM or PRMIA designations; we feel that the CAIA is more suitable for working professionals, rather than new graduates or students, mainly because of the cost of the program as well as strong industry linked application. And although the program may be in depth, it is still relatively new.
- Note: All data and factual information was taken from the CAIA website and CAIA does not endorse nor contribute to this webpage. |
