New professional designation for analysts

Both AIMA and CISDM have been leading proponents of education in alternative investment management since 1990 and 1995 respectively.

As a new standard for professionals within this specialist area of investments, the qualification will demonstrate an individual’s abilities within and understanding of alternative investment vehicles.  The CAIA designation is offered through the Chartered Alternative Investment Analyst Association and registration for the 2003 CAIA exams will start on 3 November 2002

Florence Lombard, Executive Director of AIMA, said: "Alternative investments such as hedge funds, private equity, real estate, and commodity investment have become an increasingly important part of both individual and institutional investor’s portfolios"

Ms Lombard added: "Three years ago, AIMA’s Education Committee identified a need for the creation of a professional and recognised qualification, which would be taken by investment professionals – both buyers and sellers – to demonstrate their theoretical and practical understanding of this rapidly growing financial sector.  Together with the CISDM, AIMA is proud to have been a co-founder in the creation of the CAIA, which we believe will become the industry’s educational standard."

Thomas Schneeweis, Director of the CISDM, said: "There are a number of professional designations in the investment area..The CAIA professional designation does not replace other professional investment designations; rather, it complements these qualifications in the same way that alternative investments complement traditional stock and bond investments."

Mr Schneeweis added: "Alternative investments differ from traditional investments in a number of important ways including regulatory background, investment strategies (e.g., long and short investing, use of derivative markets) as well as risk and return characteristics.  It is our hope that many investment professionals with existing professional designations will consider the CAIA as evidence of an additional area of expertise."

The specific objectives of the CAIA Association are:

1) Enhancing investment knowledge on alternative investments and promoting ethical conduct and professionalism within the industry.

2) Establishing the CAIA as a premier professional designation in the area of alternative investments among professionals and academics alike.

3) Encourage contact and communication among alternative investment professionals.

4) Establishing an ongoing series of educational events for alternative investment practitioners and academics.

Those who wish to obtain the CAIA designation are required to pass two CAIA exams, hold a bachelor’s or equivalent degree, fulfill the CAIA Association’s membership requirements, and apply concurrently for membership in the CAIA Association.  CAIA holder’s will also be required to show evidence of periodic efforts to further their education in the traditional and alternative investment areas.

The CAIA exams cover traditional alternative investments such as real estate, private equity and commodity investment as well as more modern alternative investment vehicles including hedge funds and managed futures.  The exam curriculum has been determined by a separate exam committee.  The exams will be administered at proctored testing centers around the world. Information on the testing centers will be made available online at www.caia.org in November 2003.  The first sitting of Level I exam will take place in February of 2003.  Level I and Level II exams will be given the last week of June 2003 and each six-month period thereafter.  The exam proctoring centers are capable of offering individuals the opportunity of taking exams throughout the week. 

The Level I exam is comprised of two parts.  The morning part of Level I covers fundamental concepts of finance and statistics as they relate to investment markets and alternative investments.  The afternoon part of Level I covers trading strategies employed by alternative investment managers, sources of returns to those strategies, types of alternative investments, as well as background legal and economic aspects of alternative investments along with standards for professional conduct.  The Level I exam is all multiple choice.  The Level II exam will concentrate on the application of portfolio theory to alternative investments, manager selection and oversight, risk management, due diligence, and standards for professional conduct.  Level II will be in both multiple choice and essay format. 

Study guides as well as necessary study materials are currently available.  Online review courses, approved by the CAIA Association, will be available starting in December 2002.  Computer based self study materials are also available through various external vendors. The CAIA Association will also support other organizations in developing their own courses designed to promote the CAIA designation.  Updates on approved review programs will be available at www.caia.org.

For information on obtaining the CAIA designation, please visit www.caia.org or contact the CAIA Association, 29 South Pleasant St, Amherst, MA 01002, USA: Phone: 1-413-253-7373; Fax: 413-253-4494; Email: [email protected].

Background Note: The Alternative Investment Management Association (AIMA) is a London-based not-for-profit international trade association whose objectives are: to increase investor education, transparency and promote due diligence and related best practices, and to work closely with regulators and interested parties in order to better promote and control the use of alternative investments.  Its membership includes fund of funds managers, institutional investors, hedge funds, prime brokers, exchanges, fund administrators, auditors, lawyers and other service providers.  These companies are based throughout Europe, North America, Asia, Australia and the Middle East and include Chapters in Hong Kong, Australia and Japan.  Further information can be found at www.aima.org

The Center for International Securities and Derivatives Markets (CISDM) is a non-profit academic research and education center at the Isenberg School of Management, University of Massachusetts, Amherst, Massachusetts. CISDM’s goals are to facilitate research in both traditional and alternative investment markets, to promote interactions between the academic and business communities, and to make available educational material on international financial markets to financial and non-financial firms. The Center is the editorial home of The Journal of Alternative Investments, distributed internationally by Institutional Investor. For additional information on the services and products of CISDM, visit www.cisdm.org