Chartered Alternative Investment Analyst
Encyclopedia
Chartered Alternative Investment Analyst (CAIA) is a professional designation
offered by the CAIA Association to investment professionals who complete a course of study and pass two examinations. The "alternative investments" industry is characterized as dealing with asset classes and investments other than standard equity
or fixed income
products. Alternative investments can include hedge funds, private equity
, real assets, commodities, and structured products. The CAIA curriculum is designed to provide finance professionals with a broad base of knowledge in alternative investments.
The Chartered Alternative Investment Analyst Association was founded in 2002 by the Alternative Investment Management Association (AIMA) and the Center for International Securities and Derivatives Markets (CISDM). The CAIA Association is an independent, not-for-profit, global organization committed to education and professionalism in the field of alternative investments. CAIA designees are required to maintain membership in the CAIA Association and adhere to professional and ethical standards. Currently, there are over 5,000 CAIA members.
The Journal of Alternative Investments is the official publication of the CAIA Association. Edited by Thomas Schneeweis of the University of Massachusetts at Amherst, the JAI is one of nine journals published by Institutional Investor Journals.
The Level I curriculum covers:
The CAIA Association recommends that candidates devote 150 - 200 hours of study to prepartion for the Level I exam.
The Level II curriculum covers:
The CAIA Association recommends that candidates devote 200 hours of study or more to preparation for the Level II exam.
The percentage of candidates that pass the CAIA exams changes from exam to exam. Only about 2 in 5 candidates are able to clear both CAIA Level I and Level II exams on first attempts.
Professional certification
Professional certification, trade certification, or professional designation, often called simply certification or qualification, is a designation earned by a person to assure qualification to perform a job or task...
offered by the CAIA Association to investment professionals who complete a course of study and pass two examinations. The "alternative investments" industry is characterized as dealing with asset classes and investments other than standard equity
Stock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
or fixed income
Fixed income
Fixed income refers to any type of investment that is not equity, which obligates the borrower/issuer to make payments on a fixed schedule, even if the number of the payments may be variable....
products. Alternative investments can include hedge funds, private equity
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
, real assets, commodities, and structured products. The CAIA curriculum is designed to provide finance professionals with a broad base of knowledge in alternative investments.
The Chartered Alternative Investment Analyst Association was founded in 2002 by the Alternative Investment Management Association (AIMA) and the Center for International Securities and Derivatives Markets (CISDM). The CAIA Association is an independent, not-for-profit, global organization committed to education and professionalism in the field of alternative investments. CAIA designees are required to maintain membership in the CAIA Association and adhere to professional and ethical standards. Currently, there are over 5,000 CAIA members.
The Journal of Alternative Investments is the official publication of the CAIA Association. Edited by Thomas Schneeweis of the University of Massachusetts at Amherst, the JAI is one of nine journals published by Institutional Investor Journals.
Curriculum
The CAIA program is divided into two levels. The Level I curriculum focuses on the fundamentals of alternative investment markets, while Level II concentrates on advanced topics in alternative investments. Both levels take a global perspective and incorporate issues of ethics and professional conduct.Level I
The CAIA Level I exam consists of 200 multiple-choice questions. The Level I curriculum covers seven topics, listed below. CAIA Level I candidates are assumed to have an elementary undergraduate understanding of the basic concepts of traditional finance and quantitative analysis.The Level I curriculum covers:
- Professional Standards and Ethics
- Alpha Drivers and Beta Drivers
- Real Estate
- Hedge Funds
- Commodities and Managed Futures
- Private Equity
- Credit Derivatives
The CAIA Association recommends that candidates devote 150 - 200 hours of study to prepartion for the Level I exam.
Level II
The CAIA Level II exam consists of 100 multiple-choice questions, plus three sets of constructed-response ("essay") questions. The Level II curriculum is broadly divided into two sections: alternative investments and Core and Integrated Topics. 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. The Core and Integrated Topics text is updated annually to reflect the latest industry and research developments.The Level II curriculum covers:
- Professional Standards and Ethics
- Private Equity
- Real Assets
- Hedge Funds
- Structured Products
- Asset Allocation and Portfolio Management
- Risk and Risk Management
- Manager Selection, Due Diligence, and Regulation
- Research Issues and Current Topics
The CAIA Association recommends that candidates devote 200 hours of study or more to preparation for the Level II exam.
Historical pass rates
The grading process of the CAIA exam benchmarks candidates' scores against those of the other test-takers. Grading begins once the examination window is closed, and Level I results are usually posted two weeks after the final examination day. Level II exam results are usually available four to six weeks after the last exam day, due to the need to grade essay questions.The percentage of candidates that pass the CAIA exams changes from exam to exam. Only about 2 in 5 candidates are able to clear both CAIA Level I and Level II exams on first attempts.
| CAIA Exam Pass Rate | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||
| Sept. | March | Sept. | March | Sept. | March | Sept. | March | Sept. | March | Sept. | Feb. | |
| Level I | 74% | 71% | 71% | 71% | 68% | 73% | 72% | 70% | 72% | 74% | 79% | 75% |
| Level II | 59% | 58% | 56% | 56% | 58% | 62% | 70% | 65% | 67% | 63% | ||
External links
- Investing in Alternative - Alternative Investment Research