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How to stand out in alternative investments

 The Chartered Alternative Investment Analyst (CAIA) is the globally recognized credential for professionals managing, analyzing, distributing or regulating alternative investments (such as real assets, hedge funds, private equity and/or structured products).

 

Our program is currently the only MSc in Finance worldwide awarded with a triple professional association university partnership (CAIA, CFA, GARP).

Two alumni of our program , Wolfdieter Schnee and Michael Werle describe the significance of CAIA.

 

 

CAIA consist of two exam levels covering everything from the characteristics of various strategies within each alternative asset class to portfolio management concepts central to alternative investments. Level I offers an assessment of your understanding of various alternative asset classes and your knowledge of the tools and techniques used to evaluate the risk-return attributes of each one.

 

In Level II, you learn how to apply the knowledge and analytics acquired in Level I within a portfolio management context. It has to be noted that both exams include segments on ethics and professional conduct, provided by the Chartered Financial Analyst (CFA) Institute. In contrast, while there is some cursory coverage of alternatives within the three levels of the CFA exam, the focus on alternative investment practices and strategies in the CAIA exams ensures the expertise necessary for allocators and manager. Wolfdieter Schnee determines the advantages in being a CAIA member as follows: “For me, the benefits of the CAIA designation are with me for every stage in my career as I am able to get access to the global CAIA community, which holds more than 250 events each year, stay current with ongoing education, research, and opportunities for networking and knowledge.”

 

Becoming a CAIA Charterholder by mastering the two exam levels takes most candidates about 12 to 18 months. A minimum of 200 hours study time is recommended for each level. Michael Werle explains what is critical in preparing for the exams: “A thorough understanding of the topic is a prerequisite but not sufficient on its own to successfully complete the exams. Depending on your type of study, make yourself familiar with the exam modalities in good time. At the exams, you can expect a set of questions within a limited time frame at an unfamiliar location. Therefore, preparing under exam like conditions (e.g. question banks) is truly recommended.” The CAIA Association provides access to sample/practice exams for registered Candidates at each level.

 

Wolfdieter Schnee summarizes: “Today, providing alpha requires the use of investments in non-traditional asset classes (beyond shares and bonds) or investments in such classes with the aid of complex, non-traditional strategies – in short alternatives. In the competitive landscape of alternative investments, mastering the broad array of asset classes, strategies and practices surrounding them is essential to me. Through becoming a CAIA Charterholder, I took a major step in my alternative investment education and subsequently my career.”

 

Michael Werle adds: “Alternative investments became more and more important for institutional investors throughout the last decades. Nowadays, private and semi-institutional investors are discovering these asset classes to access different risk premia and extend their portfolio diversification. Having profound knowledge about alternative investments is critical in my job, when talking to internal and external clients, and assessing the associated risks and rewards.”

 

Blog entry written by Wolfdieter Schnee and Michael Werle