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How to Become a CAIA® Charterholder

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Most Frequently Asked Questions About the Level II CAIA® Exam

So you passed the Level I CAIA exam—the first milestone on the way to becoming a Chartered Alternative Investment Analyst℠. You’ve become part of an elite group, but now comes Level II. This article will answer the most common questions we receive from people preparing to take the next step toward becoming a CAIA Charterholder.

What Is the Difference Between the Level II CAIA® Exam and the Level I Exam?

The Level I CAIA exam tests your understanding of the tools used to analyze alternative investments. Level II tests your ability to apply these tools to analyze and invest in alternative investments. Like Level I, Level II has a multiple-choice portion; however, Level II also has essay questions, called the constructed response portion.

What Is the Level II CAIA® Exam Date?

The Level II exam is offered twice a year in March and September in a period called a “window.” The 2022 windows are March 14–25 and September 12– 23. All the details are in this CAIA FAQ.

What Is the Level II CAIA® Exam Format?

The Level II CAIA exam is a 4-hour exam composed of 100 multiple-choice questions and three sets of constructed-response (essay-type) questions, all of which measure your knowledge of the CAIA Level II curriculum. The multiple-choice questions count for 70% of your score, and the constructed response questions count for 30%. You have two hours to complete the multiple-choice question section and two hours to complete the constructed-response section.

What Are the Level II CAIA® Exam Subjects?

The world of alternative investments is fluid, and new regulations or even deregulation are common. So, just like CAIA Level I, the topics of the CAIA Level II exam can change from year to year. However, CAIA Association has announced that the March 2022 Level II CAIA exam will cover the following subjects:

  • Emerging Topics
  • Ethics, Regulation, and ESG
  • Models
  • Institutional Asset Owners and Investment Policies
  • Risk and Risk Management
  • Accessing Alternative Investments
  • Methods for Alternative Investing
  • Due Diligence and Selecting Strategies
  • Volatility and Complex Strategies

What Are the Level II CAIA® Exam Topic Weights?

The weights of the Level II exam topics can also change from year to year. The current weights of Level II Exam topics are as follows:

  • Emerging Topics: 0%
  • Ethics, Regulation, and ESG: 0%
  • Models: 8–12%
  • Institutional Asset Owners and Investment Policies: 8–12%
  • Risk and Risk Management: 8–12%
  • Accessing Alternative Investments: 8–12%
  • Methods for Alternative Investing: 8–12%
  • Due Diligence and Selecting Strategies: 8–12%
  • Volatility and Complex Strategies: 8–12%

For the constructed response section, weights are as follows:

  • Emerging Topics: 10%
  • Ethics, Regulation, and ESG: 10%
  • Models: 0–10%
  • Institutional Asset Owners and Investment Policies: 0–10%
  • Risk and Risk Management: 0–10%
  • Accessing Alternative Investments: 0–10%
  • Methods for Alternative Investing: 0–10%
  • Due Diligence and Selecting Strategies: 0–10%
  • Volatility and Complex Strategies: 0–10%

How Much Time Does It Take to Study for the Level II CAIA® Exam?

CAIA Association reports that the average Level II candidate studies for at least 200 hours. It’s important that you do your studying over a period of several months, and that is why registration opens five months before the exam window opens. Cramming in the last few weeks for the exam won’t work. The topics you’re being tested on require a type of knowledge that can only be gained over a structured, careful course of study—not last-minute, frantic reviews of core materials. In addition, you need time to practice for the constructed response questions because, although they are “essay questions,” they are not like those in college exams.

How Hard Is the Level II CAIA® Exam?

The Level II exam is intense, and the constructed response portion only adds to the difficulty. You will need every bit of your 200 hours or more to prepare…and practice is key. Some self-directed and motivated candidates are able to pass the Level II CAIA exam using a course of self-study, but many use a CAIA Level II exam prep package to stay organized and ensure they are prepared for exam day.

What Is the Level II CAIA® Exam Pass Rate?

The pass rate for the Level II CAIA exam is on the decline. It was as high as 70% a few years ago, but the latest report from March 2022 is 58%. Although more people pass than fail the CAIA Level II exam, it’s not by much. You can greatly improve your odds of success by learning from other candidates’ experiences and avoiding common CAIA study mistakes.

How Much Does the Level II CAIA® Exam Cost?

The cost to sit for the Level II CAIA exam varies depending on when you register. The fee for each level ranges from $1,150 to $1,250, based on the exam registration period. If you want to retake the exam, the fee is $450.
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Are you ready for the next step? Check out our CAIA exam prep study packages for all learning styles now. Or, learn more about why you should pursue the CAIA charter here.

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Posted by Kaplan Schweser - May 11, 2022
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What Is The CAIA® Stackable Credential Program?

The CAIA Stackable Credential Program allows eligible candidates with the CFA® charter to bypass Level I of the rigorous two-part Chartered Alternative Investment Analyst (CAIA) exam. The goal is to enable qualified candidates to “stack” their CFA charter knowledge and credentials and move directly to Level II of the CAIA exam. This article explains what the program is, how it works, and who is eligible.

Why Was The CAIA Stackable Credential Program Developed?

Using knowledge gained from earning one financial credential to help earn another isn’t new. For example, a CFA charterholder is exempt from many of the education requirements for earning the CFP® mark. More specifically, the CAIA Association recognizes that there is an overlap in the knowledge requirements for the CFA and CAIA credentials. Therefore, CAIA Association has taken it a step farther with this program by exempting qualified CFA charterholders from having to take Level I of the CAIA exam.

Are you thinking about earning the CAIA charter? Read the free Before You Decide to Sit for the CAIA® Exam eBook.

How To Apply For The CAIA Stackable Credential Program?

Once you have decided to pursue the CAIA Stackable Credential Program, you can begin the registration process on the CAIA Exam Registration and Fees page.  Be sure to follow the registration directions under the ‘Application and Fees’ header on CAIA Association’s program page.

Note that in addition to skipping the Level I exam, CAIA Association is offering a 10% discount off the exam for active CFA charterholders.  During the registration process, enter promo code CFASOCTEN

Once you complete the registration, your application is entered into a verification queue. You will receive notification that your application has been received with further information regarding the verification process.

Are You Eligible for the CAIA Stackable Credential Program?

The eligibility requirements for the CAIA Stackable Credential program are as follows:

  • No existing CAIA exam history
  • Being a CFA charterholder in good standing
  • A CFA digital badge, verifiable by CAIA Association
  • Applying and registering for the program during CAIA’s exam registration periods

It’s important to note that program participants are not eligible for the CAIA Gateway Scholarship or any other CAIA scholarship program. CAIA Academic Partner faculty, who are CFA charterholders, should contact CAIA Association for more information regarding their program eligibility.

How To Prepare For The CAIA Level II Exam?

If you’re accepted into the program, consider increasing your odds of passing with a CAIA Level II study preparation package.  As a CAIA Stackable Program participant, you are eligible to receive a FREE Kaplan Schweser CAIA Level I package with your purchase of a Level II package. In this way, you can review any Level I topics that you need to brush upon.

As an added incentive, Kaplan Schweser is now offering 10% off CAIA Stackable study packages.  To take advantage of this offer, study packages must be purchased through your local CFA Society portal.

Use Promo Code: CAIAStack at checkout. 

Or, if you’re interested in earning the CAIA designation the traditional way, our CAIA Level I packages can help you get started.

What If You Fail The CAIA Level II Exam While Enrolled In The CAIA Stackable Credential Program?

If you fail the CAIA Level II exam while enrolled in the CAIA Stackable Credential program you can retake the exam.  There will be a $450 fee if you decide to re-register for the Level II exam while enrolled in the CAIA Stackable Credential program. The CAIA Association is committed to helping you earn the CAIA designation and will allow you to try again regardless of your status in the program. 

Ready to Start Preparing?

Find effective CAIA Stackable Study Packages tailored for program participants from Kaplan Schweser to help prepare you for the CAIA Level II exam. 

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Posted by Kaplan Schweser - December 14, 2021
Skipping Level I of CAIA exam because of the Stackable Credential Pilot

Most Frequently Asked Questions About the Level I CAIA® Exam

If you are considering sitting for CAIA Level I exam, you probably have questions. We’ve created this article to answer some of the most common questions we receive from people preparing to take the first step toward becoming a CAIA Charterholder. You’re always welcome to reach out to Schweser’s knowledgeable Student Support team for help as well.

What is CAIA®?

CAIA is an acronym for Chartered Alternative Investment AnalystSM. Offered by CAIA Association, the CAIA Charter is recognized globally as the benchmark for analysis, application, and standards of practice in the alternative investments arena. What are alternative investments? They are investments that are not stocks, bonds, and cash. Examples include real estate, infrastructure, natural resources, commodities, hedge funds, private equity, collateralized debt obligations, and credit derivatives.

What is a Chartered Alternative Investment Analyst »

What is the median CAIA® Charterholder salary?

The CAIA Charter is valued by top employers and recognized globally as the highest standard of achievement in alternative investment education. As the CAIA designation continues to grow, so do its benefits. According to Payscale, the median salary for a CAIA Charterholder in the United States is $96,000 a year. Investment analysts who hold a CAIA make about $74,197. On the top end of the scale are investment consultants, who earn an average of $139,565.

Wondering if the CAIA® charter is a good fit for your career? Download the free Before You Decide to Sit for the CAIA® Exam eBook for advice from successful CAIA professionals.

How do I earn the CAIA® Charter?

To earn the charter, you must take and pass the Level I and Level II CAIA exams. There are no degree or work requirements for taking the exams, but after you pass both, you must earn or finish earning a bachelor’s degree or equivalent and have at least 1 year of professional experience, or complete a minimum of 4 years of professional experience without a degree. You also have to join CAIA Association and submit two professional references to the association.

Why Pursue the CAIA Charter »

What is the Level I CAIA® exam date?

The Level I CAIA exam is administered over a period called a “window” twice a year, in March and September. Those who register for the exam can choose a date within the window for their exams. The Level I CAIA exam windows for 2022 are February 28, 2021 - March 11, 2022, and August 29, 2022 - September 9, 2022. 

What is the Level I CAIA® exam format?

The Level I CAIA exam is 200 multiple-choice questions. The exam length is 4 hours. There are 100 questions in the first 2 hours, followed by a break, and then 100 more questions in the last 2 hours.

What are the Level I CAIA® exam subjects?

The world of alternative investments is fluid, and it is not unusual to read that new types have been created. Also, new regulations or even deregulation can affect charterholders. Therefore, the topics of the CAIA Level I exam can change from year-to-year. That said, the current topics are:

  • Professional standards and ethics
  • Introduction to alternative investments
  • Real assets
  • Hedge funds
  • Private equity
  • Structured products

What are the Level I CAIA® exam topic weights?

The weights of the Level I exam topics can also change from year to year. The current weights of Level I Exam topics are as follows:

  • Professional Standards and Ethics: 15%–25%
  • Introduction to Alternative Investments: 20%–28%
  • Private Equity: 12%–20%
  • Real Assets: 11%–17%
  • Hedge Funds: 11%–17%
  • Structured Products: 10%–14%

How much time does it take to study for the Level I CAIA® exam?

CAIA Association recommends that candidates spend 200 hours studying for the CAIA exam. And, you should do that over a period of several months. Cramming in the last few weeks for the exam won’t work. The topics you’re being tested on require a type of knowledge that can only be gained over a structured, careful course of study—not last-minute, frantic reviews of core materials.

How hard is the Level I CAIA® exam?

More people pass than fail the CAIA Level I exam, but not by much. It’s an intense exam. Some self-directed and motivated candidates are able to pass the CAIA exam using a course of self-study, but the majority of those who pass have taken exam prep classes or used CAIA level I study materials.

What is the Level I CAIA® exam pass rate?

The CAIA exam pass rate for Level I is estimated to be about 60%. However, only 40% of candidates who begin the program actually earn the charter. You can greatly improve your odds of success by learning from other candidates’ experiences and avoiding common study mistakes.

How much does the Level I CAIA® exam cost?

The fee for Level I ranges from $1,150 to $1,250, based on the exam registration period. If you want to retake the exam, the fee is $450. There is an additional $400 enrollment fee for first-time registrants for Level I or for Level II candidates who are participating in the CAIA stackable credentials pilot program

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Are you ready for the next step? Check out our CAIA exam prep for all learning styles now.

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Posted by Kaplan Schweser - March 5, 2021
Woman about to ask one of the most frequently asked questions about the Level I CAIA exam

How Hard Is the CAIA® Exam?

How difficult is the CAIA exam? Slightly more than half of those who take the exam pass it, which is a better average than the CFA® Program exam and the FRM® exam. However, taking both levels of the exam isn’t exactly a walk in the park. Pass rates have been declining since the exam was first offered, and only 40% of those who register for the exam end up passing both levels. This article will help you understand the challenge the exam presents and how to improve your odds of success.

Why Pursue the CAIA Charter »

About the CAIA® Exam Format

The Level I CAIA exam consists of 200 multiple-choice questions. The exam length is four hours. There are 100 questions in the first two hours, followed by a break, and then 100 more questions in the last two hours.

The Level II CAIA exam consists of 100 multiple-choice questions, which make up 70% of the exam weight. The remaining 30% consists of three sets of constructed-response (essay) questions. These questions test your practical application of the knowledge you’ve gained to realistic scenarios.

To learn more about each level of the exam, check out our FAQ for Level I and FAQ for Level II.

CAIA® Exam Pass Rate

The pass rate for the Level I September 2021 CAIA exam was 51% and 58% for Level II. The pass rates have been on a steady decline for the past decade. (This pass rate information is courtesy of Wikipedia.) More candidates are taking the exam than previously, which is one reason the pass rate is declining, but the other is that the exam is becoming more challenging.

Wondering if the CAIA® charter is a good fit for your career? Download the free Before You Decide to Sit for the CAIA® Exam eBook for advice from successful CAIA professionals.

CAIA® Level I Exam Topics

The topics covered by both levels of the CAIA exam can change from year to year because the world of alternative investments is fluid.

CAIA Level I Topic Exam Weight
Professional Standards and Ethics
15–25%
Introduction to Alternative Investments 20-28%
Private Equity 12-20%
Real Assets
11-17%
Hedge Funds
11–17%
Structured Products
10–14%


The Level I exam is computerized, and questions are served up in topic batches, although you won’t get all questions on one topic at once. Now that you know the format, you can see that you aren’t likely to pass the exam if you don’t pass the topics with weights over 15%. Based on this table, the topics you really want to get right are Professional Standards and Ethics and Introduction to Alternative Investments.

CAIA® Level II Exam Topics

CAIA Level II TopicMultiple Choice Weight
Constructed Response Weight
Emerging Topics 0%10%
Ethics, Regulation, and ESG 0%10%
Models 8-12%0-10%
Institutional Asset Owners and Investment Policies 8-12%0-10%
Risk and Risk Management 8-12%0-10%
Methods for Alternative Investing 8-12%0-10%
Accessing Alternative Investments 8-12%0-10%
Due Diligence and Selecting Strategies 8-12%0-10%
Volatility and Complex Strategies 8-12%0-10%


Level II is also computerized and a certain percentage is solely dedicated to the constructed response questions. Level II is truly designed to assess how well you apply your knowledge to real-life situations; therefore, the topics are fairly evenly weighted. So it is essential you have a firm grasp on all the topics to be successful.

CAIA® Exam Study Tips: How to Increase Your Odds of Success

The CAIA exam requires a significant investment of time to be successful. But most of the time, failing a level of the exam is the result of study mistakes and insufficient prep. These tips will help you develop the knowledge and confidence necessary to pass Level I and Level II of the CAIA exam:

  • Put in the study time: CAIA Association says candidates should study at least 200 hours for each exam, or 400 hours total. Don’t take this suggestion lightly. You have a lot of material to cover. Starting early will help ensure you leave yourself enough time to master it.
  • Don’t rely on cramming: Candidates who do not manage to dedicate enough time to prepare for the exam might be tempted to resort to cramming. Time and time again, it’s been proven that the best last-minute exam prep activities are light review and a good night’s sleep. Cramming is not in the recipe for CAIA exam success.
  • Develop and follow a study plan:well-thought-out study plan is essential. The study plan should serve as a map for going through the entire curriculum and should incorporate classes, study notes, practice questions, mock exams, and final reviews to reinforce the learning process.
  • Learn how to apply your knowledge to real-life scenarios: Memorizing vocabulary and concepts will not be enough to pass both levels of the CAIA exam. Both test your ability to apply what you know to situations you are likely to encounter when serving clients. So keep that in mind and try to think about how you might use the concepts you’re learning about.
  • Practice, practice, practice: There is no better way to build your confidence ahead of the CAIA exam than by doing practice questions. Practicing what you have learned is essential for retaining and assessing knowledge, as well as being comfortable answering the kinds of questions you’ll encounter on exam day. Practice also helps you truly assess your comprehension of critical concepts and identify and address weaknesses.

Ready for the Challenge?

If you’ve decided the CAIA exam is something you want to take on, check out our CAIA study materials for all learning styles now.

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Posted by Kaplan Schweser - March 3, 2021
People at computers wondering how hard the CAIA Exam is

CAIA® Fundamentals eBook

Begin Your Journey to Becoming a Successful CAIA® Candidate!

Kaplan Schweser has developed this exclusive eBook for new and aspiring CAIA® candidates. The purpose of this text is to show you what a past textbook covered on the topic of quantitative analysis, so you get an idea of what the current book is like. This eBook is not meant to be a substitute for any current Kaplan Schweser or CAIA Association study guides.

Download Your Free Copy of CAIA® Fundamentals eBook

Step 1: Enter your information in the form below and click Submit Form.

Step 2: You will receive an email from Kaplan Schweser with a link to access your eBook anytime.

Step 3: Click the link in your email to access your free eBook.

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Posted by Kaplan Schweser - January 14, 2021
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FREE eBook: Before You Decide to Sit for the CAIA® Exam

Get Advice from Past Exam Takers

If you are wondering if the CAIA® charter is a good fit for your career, this eBook is for you. We’ve enlisted the help of CAIA professionals who have successfully gone through the program and asked them for advice on what it takes to earn the charter and succeed in the alternative investment field. We brought all of their advice together in this eBook to help you decide if the CAIA charter is right for you.

Download the Before You Decide to Sit for the CAIA® Exam eBook

Step 1: Enter your information in the form below and click Download Now.

Step 2: You will receive an email from Kaplan Schweser with a link to access your eBook anytime.

Step 3: Click the link in your email to access your free eBook.

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Posted by Kaplan Schweser - January 14, 2021
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What Is the CAIA® (Chartered Alternative Investment Analyst℠) Designation?

The CAIA® designation is recognized globally as the benchmark for analysis, application, and standards of practice in the alternative investments arena. In this article, you’ll learn exactly what the CAIA designation is, what an alternative investment analyst does, how you can become a CAIA charterholder, and what you can do with the designation.

What the CAIA® Designation Is

The CAIA Charter, offered by CAIA Association®, is the globally-recognized credential for professionals who manage, analyze, distribute, or regulate alternative investments such as hedge funds, venture capital, private equity, and real estate. By completing the CAIA program, you will become a Chartered Alternative Investment AnalystSM and join a growing community of 9,000 professionals in over 80 countries. Not only that, but also you’ll be making a significant investment in your career.

What an Alternative Investment Analyst Does

An alternative investment analyst manages, analyzes, distributes, or regulates real assets (e.g., real estate, infrastructure, natural resources, commodities, intangible assets), hedge funds, private equity, and structured products (e.g., collateralized debt obligations and credit derivatives). Alternative investment analysts work in hedge funds, private practices and firms, investment management firms, companies, foundations and trusts, colleges and universities, pensions, and state and local governments—just to name a few.

Not all alternative investment analysts have earned the CAIA designation. However, many CAIA charterholders agree that it sets you apart in the world of alternative investments.

For anyone who wants to be an alternative investment analyst, the future is bright. According to the U.S. Bureau of Labor Statistics, financial analyst jobs, which include alternative investment analysts, are expected to grow at a rate of 11 percent from 2016–2026. In addition, the salaries for these positions are quite encouraging. According to PayScale, salaries can range from $44,946–$119,264, with the average being $64,146.

How to Earn the CAIA® Designation

To earn the CAIA designation, you must complete the following:

  • Take and pass both levels of the CAIA exam. There are no degree or work requirements for taking the exam.
  • Earn or finish earning a bachelor’s degree or equivalent and have at least 1 year of professional experience or complete a minimum of 4 years of professional experience without a degree.
  • Join CAIA Association (which costs $350 USD and requires you to abide by their terms and conditions).
  • Submit two professional references to CAIA Association.

In our article about how to earn the CAIA designation, you can take a closer look at the requirements.

Are you thinking about taking the CAIA Exam? Download the free eBook, Before You Sit for the CAIA® Exam, for invaluable advice from successful CAIA professionals.

What You Can Do With the CAIA® Designation

Many of the titles held by those with the CAIA designation appear at first to be the same as those of CFA® charterholders and other financial certifications or degrees. The difference is the investments they analyze or manage and where they work. These are some of the most common job roles for CAIA charterholders:

  • Investment analyst: Analyzes investment risk and return data, conducts performance attribution, carries out peer benchmarking, and performs investment operations tasks.
  • Portfolio manager: Oversees an investment fund or group of funds, making informed decisions for their clients based on expert insight and experience.
  • Investment manager: Administers clients’ funds, pooling their money into long-term investment strategies, including alternative assets.
  • Credit structurer: Blends or repackages financial assets and complex transactions in the credit area (also an alternative investment).
  • Managing director or senior vice president: Is responsible for the performance of their firms as determined by their board of directors and C-level executives.
  • Chief-level executive: Makes the strategic decisions that drive the success and the direction of the organization. Chief-level executive positions held by those with the CAIA designation can include chief information officer (CIO), chief financial officer (CFO), and senior investment officer.

Although a CAIA designation is no guarantee you’ll land a management position or a spot in the C-suite, a significant percentage of CAIA charterholders have worked their way up to these levels. You can explore these positions and others in more detail in this article about what you can do with the CAIA designation.

Ready to Learn More About Earning the CAIA® Designation?

If you’re wondering if earning the CAIA designation is right for you, check out these reasons why you should pursue this charter. When you’re ready to get started, Kaplan Schweser has CAIA exam prep study packages to increase your odds of success!

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Posted by Kaplan Schweser - January 13, 2021
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What Can You Do With a CAIA® Charter?

Top employers value the CAIA® Charter, and it is recognized globally as the highest standard of achievement in alternative investment education. Charterholders demonstrate their knowledge and interest in specific financial products known as alternative investments.

But, what kind of jobs are available to them? Let’s take a look at some of the most common job titles for those who have earned the Chartered Alternative Investment Analyst℠ designation. We’ll describe these positions in alternative investment terms.

What Can I do with a CFA® Charter? »

Where CAIA® Charterholders Work

Many of the titles held by those with the CAIA designation appear at first to be the same as those of CFA® charterholders and other financial certifications or degrees. The difference is the investments they analyze or manage and where they work. Alternative investments are assets other than stocks, bonds, and cash, such as private equity, hedge funds, real estate, derivatives, commodities, and more. You can find CAIA Charterholders in hedge funds, private practices and firms, investment management firms, companies, foundations and trusts, colleges and universities, pensions, and state and local governments, to name a few.

Investment Analyst

Investment analysts analyze investment risk and return data, conduct performance attribution, carry out peer benchmarking, and perform investment operations tasks. CAIA Charterholders are good candidates for this position because of their specialized knowledge of alternative investments and risk management. Employers currently advertising for CAIA Charterholders for investment analyst positions on the CAIA Careers web page, maintained by CAIA Association, include equity divisions of wealth management firms, state and local government or higher education retirement funds, credit funds, ratings agencies, and venture capital firms.

Investment Consultant

Investment consultants provide clients with investment products, advice, planning, or any combination of these. They formulate investment strategies, helping clients fulfill their needs and reach their financial goals. CAIA Charterholders bring alternative investment product knowledge and asset allocation skills to the role. A small sampling of the types of employers who hire CAIA Charterholders as investment consultants includes accounting and finance firms, consulting firms, global investing firms, life insurance companies, and firms specializing in audit, tax, and advisory services.

Investment Advisor

Investment advisors provide investment guidance to clients in exchange for specific fees. They differ from stockbrokers, who earn a commission. Investment advisors often have what is called discretionary authority, which means they can act on behalf of their clients without formal permission. Clients and investment advisors usually formalize this authority as part of onboarding. A CAIA Charterholder’s specialized knowledge in everything from ethics to structured products is valuable in this position. Investment advisors with the CAIA Charter can be found in mutual funds, investment banks, brokerages, private equity firms, and tax firms.

Portfolio Manager

Portfolio managers are in charge of an investment fund or group of funds, making informed decisions for their clients based on expert insight and experience. They work with analysts, researchers, and clients to stay current on the markets and business news. They make decisions to buy and sell assets throughout the day as the markets fluctuate. CAIA Charterholders demonstrate specialized knowledge on how to apply alternative investments to the decisions they make for their clients. Among the employers who hire CAIA Charterholders as portfolio managers are hedge funds, banks, financial services firms, brokerages, equity funds, and government or college and university pension plans. You can learn the skills you need to succeed in this position in this article.

Investment Manager

Investment managers administer clients’ funds, pooling their money into long-term investment strategies, including alternative assets. They differ from portfolio managers because they have a wider range of responsibilities; most are expected to have advanced degrees. Along with meeting with clients and evaluating investment options, they develop financial documents and reports, make projections for expected returns on investments, monitor economic factors, and manage or supervise analysts and other employees. Employers who hire CAIA Charterholders as investment managers include hedge funds, consulting firms, investment banks, and capital investment firms. You can get a broader view of this position here.

Credit Structurer

Credit structurers blend or repackage financial assets and complex transactions in the credit area (also an alternative investment). They manage product development, marketing, and risk analysis, and obtain approvals. This is a job role well suited to CAIA Charterholders. The types of employers who hire them include financial services firms, investment banks, private equity firms, and asset management firms.

Managing Director or Senior Vice President

CAIA Charterholders often move up in their careers to hold managing director or senior vice president positions at private equity, capital investment, investment management, financial services, and hedge fund firms. They are responsible for the performance of their firms as determined by its board of directors and C-Level executives. They report to the CEO and even the company’s chair or board of directors.

Chief-Level Executive

Chief executives make the strategic decisions that drive the success and the direction of the organization. As such, C-level positions are viewed as the highest level of business success. Chief-level executive positions held by those with the CAIA designation can include chief information officer (CIO), chief financial officer (CFO), and senior investment officer. Their responsibilities vary based on the structure of the firm and the specific role. You can find CAIA Charterholders in these positions in higher education retirement funds, trust companies, global investment advisory firms, hospital systems, and mutual funds.

Interested in Pursuing the CAIA® Charter as a Boost to Your Career?

Although earning the CAIA designation does not guarantee you a job or a top position at a firm, it can make a difference when an employer is deciding between two otherwise equally qualified candidates. In that situation, the CAIA Charter could be your competitive advantage. Passing the CAIA exam and earning the CAIA charter takes hard work and dedication, but our CAIA exam prep study packages can help. It’s a career move worth considering.

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Posted by Kaplan Schweser - January 13, 2021
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What Is an Alternative Investment?

The Chartered Alternative Investment AnalystSM (CAIA®) Charter is a globally recognized credential for finance professionals managing, analyzing, distributing, or regulating alternative investments. According to CAIA Association, there is an elite group of 9,000 charterholders worldwide. If you’re wondering what “alternative investment” means and whether becoming a CAIA charterholder is right for you, this definition can help.

There are four categories of alternative assets you must be familiar with for the CAIA exam: real assets, hedge funds, private equity, and structured products.

1. Real assets

These are associated with investments that directly control nonfinancial assets and represent actual rights to consumption. Within real assets, investors may invest in real estate, infrastructure, natural resources, commodities, and intangible assets.

2. Hedge funds

These are private investment vehicles that are subject to minimal regulation and therefore able to pursue unique investment opportunities using derivatives, leverage, short positions, and other strategies.

Interested in earning Chartered Alternative Investment AnalystSM Charter? Download the free Before You Sit for the CAIA® Exam ebook for advice from successful CAIA professionals.

3. Private equity

These investments include debt and equity securities that are not publicly traded. Within private equity, investors may invest in:

  • Venture capital: Senior equity financing for small, high-risk startup companies unable to obtain public equity
  • Leveraged buyouts: Funds that privatize a public company by purchasing its equity using a large amount of debt
  • Mezzanine debt: Privately held convertible debt, debt with equity options or warrants, and preferred stock
  • Distressed debt: Debt issued by companies in, or about to enter, bankruptcy

4. Structured products

Structure products, such as collateralized debt obligations (CDOs) and credit derivatives, create a specific risk, return, tax, or other profile by segmenting the cash flows of traditional investments or linking the returns to one or more market values.

Now that you understand the different categories of alternative investments, learn why finance professionals worldwide decide to pursue the CAIA designation.

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Posted by Kaplan Schweser - January 13, 2021
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CAIA® vs. FRM®: Everything You Need to Know

In the finance world, two common designations are CAIA® and FRM®. If you’re thinking about becoming a financial analyst or working with investments, these are two designations that could advance your career. So, what’s the difference and which is right for you? Let’s take a look at CAIA versus FRM.

What Do CAIA® and FRM® Mean?

CAIA is an acronym for Chartered Alternative Investment AnalystSM. The CAIA Charter designation, offered by the CAIA Association, is recognized globally as the benchmark for analysis, application, and standards of practice in the alternative investments arena. Alternative investments include real assets (e.g., real estate, infrastructure, natural resources, commodities, intangible assets), hedge funds, private equity, and structured products (e.g., collateralized debt obligations, credit derivatives). In other words, alternative investments are not stocks, bonds, and cash.

FRM stands for Financial Risk Manager. Offered by the Global Association of Risk Professionals (GARP), FRM certification sets you apart in the global marketplace and gives you a strong understanding of the underlying risk management concepts in today’s ever-changing financial markets. It also lets employers know that you take risk management seriously and that your knowledge has been validated by international professional standards.

Similarities

Both designate professionals who are knowledgeable in finance and capable of analysis. For each, you must pass two sets of exams (CAIA Level I and Level II; FRM Part I and Part II). You can’t move to the next level or part until you pass the first. In addition, their exam topics intersect slightly. A topic of the CAIA exam is risk and risk management, and the FRM Exam has questions about hedge funds. The exams for each require a great deal of study, practice, and commitment to learning and analysis.

Note: It is possible to hold both a CAIA Charter and an FRM certification.

Differences

The focus of the CAIA Charter is on the world of real assets, hedge funds, private equity, CDOs, credit derivatives, and other structured products. That’s different from the FRM designation, which is related to managing exposure to operational, credit, market, foreign exchange, volatility, liquidity, inflation, business, legal, reputational, and sector risk. Another difference is the exam format. Level I of the CAIA exam is multiple-choice, but a portion of Level II has constructed response. FRM Part I and Part II are both multiple-choice.

Are you thinking about earning the CAIA charter? Read this ebook before you sit for the exam.

CAIA® and FRM® Requirements

To earn your CAIA Charter, you need to:

  • Take and pass the CAIA Exams. There are no degree or work requirements for taking the exams.
  • Earn or finish earning a bachelor’s degree or equivalent and have at least 1 year of professional experience or complete a minimum of 4 years of professional experience without a degree.
  • Join CAIA Association (which costs $350 and requires you to abide by their terms and conditions).
  • Submit two professional references to CAIA Association.

To earn your FRM certification, you need to:

  • Take and pass the FRM Exams. There are no degree or work requirements for taking the exams.
  • Work full-time in a financial risk role for 2 years.
  • Demonstrate your experience to GARP by describing your professional role in financial risk management and submitting it to GARP within 5 years of passing Part II.

Exam Topics, Formats, Fees, and Pass Rates

In a discussion about CAIA versus FRM, people are most likely to be concerned about the exams. Here’s what you need to know.

The topics of the CAIA exams are as follows:

Level I:

  • Professional standards and ethics
  • Hedge funds
  • Introduction to alternative investments
  • Private equity
  • Real assets
  • Structured products

Level II:

  • Ethics, regulations, and ESG
  • Models
  • Institutional asset owners and investment policies
  • Risk and risk management
  • Accessing alternative investments
  • Methods for alternative investing
  • Due diligence and selecting strategies
  • Volatility and complex strategies
  • Emerging topics
Both levels of the CAIA exam are given in March and September. Level I is multiple-choice. Level II has a multiple-choice portion and a constructed response portion. The fee for each level ranges from $1,150 to $1,250, based on the exam registration period. If you want to retake the exam, the fee is $450. The pass rates for the September 2021 Level I exam was 51% and it was 58% for the September 2021 Level II exam.

By contrast, the topics of the FRM Exam are:

  • Foundations of risk management
  • Quantitative analysis
  • Financial markets and products
  • Valuation and risk models
  • Market risk measurement and management
  • Credit risk measurement and management
  • Operational risk and resiliency
  • Liquidity and treasury risk measurement and management
  • Risk management and investment management
  • Current issues in financial markets

Both Part I and Part II of the exam are offered in May and November. However, due to the COVID 19 pandemic, GARP has changed the dates for 2021. Part I will be offered in May, July, and November, and Part II will be offered in May and December. The format of both parts is multiple-choice. The cost ranges from $550 to $750 (USD) for Part I based on when you register. Not included in that cost is a $400 (USD) enrollment fee. The fee for Part II ranges from $550 to $750 (USD). The pass rates for the May 2021 FRM Exam were 43% for Part I and 59% for Part II.

Preparing for the Exams

Another similarity between the two designations is that the exams are nearly impossible to pass if all you do is last-minute cramming. So, whether it’s the CAIA or FRM exam, you should start studying early.

To prepare for the CAIA Exams, CAIA Association recommends more than 200 hours of study for each level. The Level I exam tests your knowledge of alternative investment concepts and tools. Level II evaluates your ability to apply those tools to analysis and investment. To pass both CAIA levels, exam technique is as important as understanding the curriculum concepts and topics. Therefore, it’s a good idea to enroll in classes, but you should also practice answering questions by taking mock exams.

To prepare for the FRM Exams, plan to study a minimum of 200–240 hours for each part. The basic strategies you should follow while learning the FRM curriculum include being aware of the big picture and knowing the main concepts. Exam preparation for FRM Part I Classes and FRM Part II Classes are recommended, as is focused study. Take as many practice exams as you can. Save one for the last week before the exam.

CAIA® vs. FRM®: How to Choose

Deciding which designation to pursue really depends on what you want to do as a financial analyst. If you’re more interested in specializing in unconventional investments, such as hedge funds or private equity, then the CAIA Charter is right for you. Certified FRMs typically hold managerial and executive-level positions that concentrate on risk and investment risk. So, if you’re interested in specializing in analyzing risk as a credit risk manager, market risk manager, regulatory risk manager, or operational risk manager, then the FRM designation is a better fit.

Of course, you don’t have to choose at all. As we mentioned at the beginning of this article, you can hold both designations. Alternative investment analysts, by the nature of most of their investments, have to understand investment risk. So, it makes sense for a CAIA Charterholder who wants to focus on risk management to become a Certified FRM®. In addition, earning the FRM certification, and then the CAIA Charter, opens doors for risk managers who want to specialize in the risk aspects of portfolio management.

No matter which path you choose, there is a wealth of information out there that can help you earn the credential or credentials you need. You can get started here.

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Posted by Kaplan Schweser - January 8, 2021
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Why Pursue the CAIA® Charter?

The CAIA® Charter is valued by top employers and recognized globally as the highest standard of achievement in alternative investment education. As the CAIA designation continues to grow, the benefits that go along with it have grown as well.

Set Yourself Apart from the Competition

As a finance professional, you understand the importance of putting yourself in the right position when the economy rebounds. Earn your CAIA Charter, and be at the forefront, so you can set yourself apart from your competition.

Employers and clients alike will demand experienced, trustworthy professionals with a working knowledge of the alternative investment industry. The CAIA Charter designation is recognized globally as the benchmark for analysis, application, and standards of practice in the alternative investment arena.

Considering a career as a Chartered Alternative Investment Analyst? Download the free Before You Decide to Sit for the CAIA® Exam eBook for valuable advice from successful CAIA professionals.

Benefits of Pursuing the CAIA® Charter

As the CAIA Charter continues to grow, the benefits that go along with earning the designation have grown as well. Once you earn the CAIA designation, you can expect to:

  • Be recognized and respected among employers, peers, and clients as a leader in alternative investing
  • Increase your career opportunities by developing industry skills and educational standards
  • Understand a portfolio from the investor’s perspective and implement diverse strategies
  • Stay current with trade publications, resources, and industry events that are discounted for CAIA Charter members
  • Broaden your client base and professional networking connections through membership in global chapters
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Posted by Kaplan Schweser - December 18, 2020
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How to Become a CAIA® Charterholder

By completing the CAIA program, you will become part of the elite global community of over 9,000 Chartered Alternative Investment Analysts in over 80 countries. Not only that, but you’ll also be making a significant investment in your career.

Steps for Becoming a CAIA® Charterholder

The CAIA Charter is the globally-recognized credential for professionals who manage, analyze, distribute, or regulate alternative investments such as hedge funds, venture capital, private equity, and real estate.

Step 1: Pass Level I and Level II of the CAIA® Exam

The CAIA exam has two levels, and you’ll need to take and pass both of them. The exam cycles are in March and September, and you’ll need to take each level in separate cycles. For example, you can take Level I in March and Level II in September. Level I and Level II require a minimum of 200 hours of study each. There are no education prerequisites for taking these exams, but studying for each is critical. If you are in the process of earning a degree or diploma, you can still take the exam.

The topics covered in the CAIA Level I exam focus on the tools used to analyze alternative investments, and they include are professional standards and ethics, hedge funds, introduction to alternative investments, private equity, real assets, and structured products. CAIA Level II topics focus on how to apply the tools learned in Level I to analyze and invest in alternative investments. The Level II exam covers ethics, regulations, ESG, methods for alternative investing, models, accessing alternative investments, institutional asset owners and investment policies, due diligence and selecting managers, risk and risk management, and volatility and complex strategies.

Step 2: Meet Education or Experience Requirements

After you pass the exam, you’ll want to make sure you meet one of these two requirements:

Obtain a bachelor’s degree or equivalent with a minimum of one year of professional experience.
Have a minimum of four years of professional experience without a degree.
What is professional experience? It’s considered full-time employment in a professional capacity in the regulatory, banking, financial, or related fields.

Wondering if the CAIA® charter is a good fit for your career? Download the free Before You Decide to Sit for the CAIA® Exam eBook for advice from successful CAIA professionals

Step 3: Find Two Professional References

Part of becoming a CAIA Charterholder includes applying to be a member of the CAIA Association®. One of the requirements is that you provide two professional references. They do not have to be CAIA Charterholders. Supervisors are the preferred professional reference, but you can name other individuals who can describe and attest to your experience. It’s best to choose your references before you apply, and it’s a good idea to let them know.

Step 4: Apply for Membership in the CAIA Association®

To apply to be a member of the CAIA Association, go to their registration page, and create an account. There is a fee of $350 for one year (renewable annually), or $650 for two years (renewable biannually). There are a number of benefits of being a member and pursuing your charter.

Step 5: Agree to Abide by the Terms and Conditions of the CAIA Association® Member Agreement

This document lets the CAIA Association know that you have read and agree to abide by the rules in its Candidate Policy Manual, Member Policy Manual, fee schedules, code of ethics, privacy policy, intellectual property policy, and discipline procedures. The agreement also makes you aware that all policies are subject to change. You can find all this information on the CAIA Association’s policy page.

After you agree to the terms and conditions and pay your membership fee, an email confirmation will let you know that your application has been approved.

Next Steps For After You Become a CAIA® Charterholder

Besides the obvious boost to your career and your standing in the investment community, being a CAIA charterholder entitles you to a number of benefits from the CAIA Association. For example, you get your custom charter, access to as many as 250 events each year, and news and updates about continuing education, research, and opportunities for building professional networks and relationships. The benefits are with you at every stage of your career.

By completing the CAIA® Program, you will become part of the global community of over 8,000 Chartered Alternative Investment Analysts in over 80 countries.
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Are you ready for the next step? Check out our CAIA exam prep study packages for all learning styles now.
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Posted by Kaplan Schweser - December 8, 2020
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