How difficult is CAIA exams? How many hours of studying? What's the minimum score to pass (70% or better)?
level 1 relatively easy, just like the CFA level 1. However they are changing it in 2007, the basic review material will be gone, and more informative/harder stuff will be included. "The CAIA membership and boards are thrilled to announce that the CAIA program will now focus exclusively on alternative investments, effective with the September 2007 exam curriculum. As a result, the traditional investments material (Investments by Bodie, Kane and Marcus), will be removed from the curriculum. The last three years have been a period of immense growth and development for the CAIA curriculum. As the AI landscape grows and changes, we strive to ensure that our program reflects these developments. The removal of traditional content will allow for a greater amount of alternative investment specific material. Eliminating traditional material will not preclude the candidate from his or her responsibility for understanding it. Rather, it will be assumed that all candidates are fully versed in traditional analytics as a prerequisite for entering the program. Pre-tests on basic asset valuation and portfolio theory concepts will be available on the CAIA website so that potential candidates can gauge their level of understanding and competence. This exclusive focus on alternative investments is consistent with CAIAA's goal to provide a balanced combination of depth and breadth across hedge funds, private equity, real estate, managed futures and commodities, enhancing the Association's ability to provide the global mark of distinction in alternative investments. The mission of the curriculum committee is to ensure that the reading materials and corresponding learning objectives in the CAIA study guides cover all the elements essential to a fundamental understanding of private equity, real estate, commodities, managed futures and hedge funds, as determined by the CAIA Advisory Board. To keep pace with research advancements and new product development, the CAIA curriculum is reviewed and updated on a regular basis. " level 2 is really hard, just like CFA level 2. And guess what, I bet that CAIA will become a 3 level exam, after all CFA was also two levels for quite a while before membership ranks rose.
Few articles commenting on CAIA The Wall Street Journal [Excerpted from the original article] Financial advisers, and even regulators, are going back to school to learn the A-to-Z of alternative investments spurred by the growing popularity of hedge funds with wealthy investors. There's not a whole load of choice out there when it comes to education in the sector and the Chartered Alternative Investment Analyst Association is grabbing the growing number of hungry students around the globe. Some 1,171 candidates in 50 countries took exams in February for the association's professional "CAIA" designation (pronounced "KAI-yah"), up more than 40% on the last exam session in July. The association expects 1,800 to register for this fall's exams, boosted by the adoption of the program by the Securities and Exchange Commission, and growing recognition of the designation in Europe and Asia where there has been a significant up-tick in enrollments. Craig Asche, executive director of the CAIA Association says most academic programs at universities and company training schemes are still geared towards stocks and bonds, creating a supply demand mismatch in a nascent, but rapidly growing industry. "If you are a young person looking to get into this field, then there is no other way to get educated than through this program," he says. William Gruzynski is a portfolio manager and director at Emerald Strategies LLC, a Chicago-based alternative investment firm focusing on hedge funds, managed futures solutions and foreign-exchange strategies for wealthy individuals and institutions, such as foundations and endowments. He graduated from the CAIA program last year. Mr. Gruzynski, who has over 30 years of industry experience, says the program helped him learn in more detail about real estate and private equity. Although he isn't directly involved in these types of strategies, his new knowledge has helped him articulate the pros and cons to clients when questions about they come up. "Clients tend to look only at returns and not take into account how they are generated and the risks that are involved," Mr. Gruzynski says. Asian Investor By Simon Osborne The academic qualification to become a Chartered Alternatives Investment Analyst is being promoted in Hong Kong this week. It is more familiarly known as CAIA, which rhymes with the Cantonese "Aiya!". CAIA was jointly founded in 2002 by the Alternative Investment Management Association and the Centre for International Securities and Derivatives markets. Today 11% of members are based in Asia. More than half of CAIA's participants are North America-based and the organisation is taking steps to ensure that the topics covered within the qualification are applicable globally rather than be excessively America-centric. Courses are done by self-study and the exams currently have a 70% pass rate, and each are four hours long. It costs a hefty $1,000 to take the exam, but many companies reimburse their employees after they pass. Approximately 3,000 people in 54 countries are taking the exam this year. In Hong Kong this week to encourage more candidates is Craig Asche, CAIA's executive director. He is now based in Amherst, Massachusetts, and was formerly director of Salomon Brothers' foreign exchange department in Hong Kong. Asia's man on the CAIA's global board is Peter Douglas of GFIA. He has passed his CAIA exams, and Asche told the putative candidates they don't have to be a spring chicken to contemplate doing this programme. "It's set at the same level of difficulty as the CFA qualification," Asche explains. "They are complementary qualifications as CFA covers traditional investments and we cover alternatives. Our curriculum has an enormous amount of practical application. It has to be designed like that in order to be worthwhile for the candidates." The two-tiered qualification encompasses the core alternatives topics of hedge funds, real estate, venture capital, private equity, energy futures and commodities. Each level also has a section on professional ethics. Level One of the syllabus also includes scarier topics such as quantitative analysis, valuation theory and option-pricing models, but Asche says that those who are not mathematical geniuses can also master the material. The Business Times Singapore By Genevieve Cua Test time for would-be certified hedgies The Chartered Alternatives Investment Analyst programme looks to certify local alternatives industry professionals. FRESH research has found that hedge funds with a physical presence in the region outperform their peers by as much as 5.5 percentage points a year. Assistant Professor Melvyn Teo of Singapore Management University's finance faculty was yesterday awarded a prize of US$10,000 for his research, at the first AIMA Insead Research Award for Asian alternative investments. The award aims to encourage applied research. AIMA is the Alternative Investment Management Association. The award is sponsored by the Chartered Alternative Investment Analyst Association, the sponsoring body for the CAIA designation, which seeks to become the educational standard for the alternative investments sector. Assistant Prof Teo's paper is titled 'The Geography of Hedge Funds', and is based on research done between January and May this year. It analysed the relationship between the risk-adjusted performance of hedge funds and their proximity to their investments, using data on Asian hedge funds. It found that the local information advantage was especially pervasive for emerging market and event driven funds. The panel of four judges include Stephen Diggle, principal of Artradis Fund Management, and Pierre Hillion, de Picciotto Chaired Professor of Alternative Investments and Insead finance professor. Singapore has been trying to woo hedge fund managers to set up shop here, as part of its plans to become a wealth management hub. So far, some US$7 billion of hedge fund assets is managed out of Singapore. This pales next to Hong Kong, where hedge fund assets rose 268 per cent over the last couple of years to US$33.5 billion. Last week, the SMU launched a hedge fund centre for research and education together with BNP Paribas. The centre will undertake research, organise seminars and executive education courses. As at June, AsiaHedge estimated that assets in Asia-Pacific hedge funds stood at US$128 billion. This, however, could under-estimate actual assets substantially, says GFIA principal Peter Douglas, due to managers' desire to maintain a low profile. Mr Douglas is an AIMA council member, and also a judge at the research panel. Popularity of CAIA Designation Grows, SEC Sends Its Examiners Fri., Jun 09 - FINalternatives (excerpt) Three years ago, 78 people sat for the first Chartered Alternative Investment Analyst Association examination, the only certification that focuses exclusively on the alternatives space. Since that time, 560 individuals have achieved the CAIA designation and a record 1800 are expected to sit for the next four-hour-long test in September. "We have outpaced our wildest dreams," said Craig Asche, executive director of the not-for-profit organization. "We are seeing tremendous interest from people coming out of graduate programs or PhD programs," said Asche. "The industry is relatively new and is changing quickly, dynamics that are interesting to young people." He explained that because very few graduate programs have any courses specifically focusing on alternative investments, young people have not had the opportunity to get a solid foundation in the industry. Meanwhile, the certification is gaining credibility among firms looking to increase their employees' knowledge-base. Pacific Alternative Asset Management Company, a $7.4 billion fund-of-hedge funds manager, requires all of its analysts to obtain the CAIA designation, and also recommends its other employees go through the program. Jane Buchan, chief executive officer at PAAMCO, went through the program and was very impressed with the amount she learned, even though she is a professor of finance and a veteran in the hedge fund industry. She said she specifically found the parts of the program that focused on other assets classes within the alternatives space very useful. "With the convergence of the alternatives space today, it is important to have a sense of where you fit in the marketplace," said Buchan, who is now on the board of advisors of the organization. The Securities and Exchange Commission, which until this year never had examiners who specialized in the alternatives space, is sending some of its employees to get the CAIA accreditation. For skeptics who think the accreditation is not as valuable as the CFA designation, long-considered the gold standard in the financial industry, Asche said that the CFA is a very strong program for generalists, but its focus is almost all on traditional assets. He added that 25-30% of those taking the CAIA exam are already CFAs.
I'd like to start prepping for the CFA. Any tips on how to game the Level 1 and 2 sections? Any good CFA forums?
First get the Schweser study books, as it is useless reading all the recommended readings from the CFA Insitute. There are about 6 study books in total and they cover everything on the exam, try to finish at the very least 1 book a month. Don't forget to buy the ethics guide from the CFA Insitute (very important part of the exam). I suggest finishing the books 1 month before the exam. When you are finished with the books and the review examples go to schweser's website and do some of the practice exams. Make sure you time yourself and are able to finish the practic exams on time. Its a tough exam and I know many people who have failed it more then once, so don't think that you can cram all the material 2 weeks before the exam. Do many practice questions from previous exams. Good luck, -Neo
My short term goal is to get an entry level institutional sales and trading or hedge fund job, then work on my CAIA. Does anybody recommend any advanced degrees whatsoever? I am guessing that If I am good I probably won't go back to school again. I just wish I could have had a more quantitative background. Finance as a undergrad major just doesn't go deep enough.
for trading, having programing skill helps, especially for backtesting. But if you don't have any programming background, I suggest you hire someone write it for you first and learn you way up, saving a lot of time and money. BTW, trading system design language is much easier than C/java... after all we are here to trade not a programming contest.