The Chartered Alternative Investment Analysts' Program

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The program sponsored by the Alternative Investment Management Association and the Center for International Securities and Derivatives Markets, a designation which has not been extensively publicised, but a designation which will undoubtedly become one of the important certifications over the next decade. With a focus on alternative investments such as real estate and venture capital, the CAIA aims to elaborate on both traditional, as well as the alternative investment arena.

Split into 2 levels, the CAIA is the most costly out of the investment designations, but will undoubtedly suit a number of individuals.

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Topic Outline: (level 1)

Section 1: Foundations of Traditional Investments

Part 1: Quantitative Analysis

Topic 1: Quantitative Analysis

Part 2: Markets and Traditional Instruments

Topic 2: Traditional Markets
Topic 3: Fixed Income Securities
Topic 4: Equity Securities

Part 3: Valuation and Investment Theory

Topic 5: Basic Risk Return Relationship
Topic 6: Efficient Capital Markets
Topic 7: Portfolio Management
Topic 8: Market Risk Management
Topic 9: Options and the Black-Scholes Option Pricing Model
Topic 10: Other Derivatives and Market Strategies

Section 2: Foundations of Alternative Investments

Part 4: Ethical and Professional Standards

Topic 11: Standard I of AIMR Standards of Professional Conduct
Topic 12: Standard II of AIMR Standards of Professional Conduct
Topic 13: Standard III of AIMR Standards of Professional Conduct

Part 5: Hedge Funds

Topic 14: Introduction to Hedge Funds?
Topic 15: Establishing a Hedge Fund Investment Program
Topic 16: Due Diligence
Topic 17: Risk Management
Topic 18: Regulation and Institutionalization of Hedge Funds

Part 6: Commodities

Topic 19: Introduction to Commodity Markets
Topic 20: Investing in Commodity Futures
Topic 21: Commodity Futures in a Portfolio Context
Topic 22: Managed Futures

Part 7: Real Estate

Topic 23: Introduction to Real Estate Finance
Topic 24: Valuation of Residential and Income-Producing Properties
Topic 25: The Secondary Mortgage Market
Topic 26: Real Estate Investment Trusts (REITs)

Part 8: Private Equity

Topic 27: Introduction to Venture Capital
Topic 28: Alternative Investment Strategies in Private Equity
Topic 29: Performance Measurement for Private Equity
Topic 30: Global Issues in Private Equity

Topic Outline: (level 2)

Part 1: Ethical and Professional Standards

Topic 1: Standard IV of AIMR Standards of Professional Conduct
Topic 2: Standard V of AIMR Standards of Professional Conduct

Part 2: Alternative Investments in Institutional Portfolios

Topic 3: Return Enhancement
Topic 4: Portfolio Optimization
Topic 5: Regulatory Issues

Part 3: Alternative Investment Risk Analysis and Management

Topic 6: Introduction to Alternative Investment Risks
Topic 7: Due Diligence
Topic 8: Quantitative Risk Analysis
Topic 9: Alternative Investment Portfolio Risk Management

Part 4: Advanced Topics in Alternative Investments

Topic 10: Alternative Asset Performance Attribution and Style Analysis
Topic 11: Indexing and Passive Replication
Topic 12: Securitization of Alternative Assets

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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 knowledge 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".

Unlike the CFA, FRM or PRMIA designations, we feel that the CAIA is more suitable for professionals, rather than new graduates or students, mainly arising from the cost of the program as well as the industry focus, and although the program may be in depth, it is still relatively new and the cost of the program in our opinion is slightly on the high side.

With the first charters awarded in 2003 numbering approximately 40, as well as a revamped syllabus for the upcoming year is likely to push this designation to an increasing level of recognition.

- Note: All data and factual information was taken from the CAIA website and CAIA does not endorse nor contribute to this webpage.