Chartered Alternative Investment Analyst (CAIA) (pronounced "KAI-ah") is a professional designation offered by the CAIA Association to investment professionals who complete a course of study and pass two examinations. The "alternative investments" industry is characterized as dealing with asset classes and investments other than standard equity or fixed income products. Alternative investments can include hedge funds, private equity, real assets, commodities, and structured products.

The Chartered Alternative Investment Analyst Association was founded in 2002 by the Alternative Investment Management Association (AIMA) and the Center for International Securities and Derivatives Markets (CISDM). As of 2024, there are over 13,000 CAIA members.^[1] CAIA designees are required to maintain membership in the CAIA Association and adhere to professional and ethical standards.

Curriculum

The CAIA curriculum is designed to provide finance professionals with a broad base of knowledge in alternative investments and consists of two exam levels that are revised regularly to incorporate relevant, practical industry developments, and the latest academic research. The Level I curriculum focuses on the fundamentals of alternative investment markets, while Level II concentrates on advanced topics in alternative investments. Both levels take a global perspective and incorporate issues of ethics and professional conduct.

The CAIA Level I exam consists of 200 multiple-choice questions. The Level I curriculum covers seven topics, listed below. CAIA Level I candidates are assumed to have an elementary undergraduate understanding of the basic concepts of traditional finance and quantitative analysis.

The Level I curriculum covers:

• Professional Standards and Ethics
• Introduction to Alternative Investments
  • What Is an Alternative Investment?
  • The Environment of Alternative Investments
  • Accessing Alternative Investments
  • Quantitative Foundations
  • Statistical Foundations
  • Financial Economics Foundations
  • Derivatives and Risk-Neutral Valuation
  • Measures of Risk and Performance
  • Alpha, Beta, and Hypothesis Testing

• Real Assets
  • Natural Resources and Land
  • Commodities
  • Other Real Assets
  • Real Estate Assets
  • Real Estate Methods
• Hedge Funds
  • Structure of the Hedge Fund Industry
  • Macro and Managed Futures Funds
  • Event-Driven and Relative Value Hedge Funds
  • Equity Hedge Funds
• Private Equity & Private Debt
  • Private Equity Assets
  • Private Equity Funds
  • Private Credit and Distressed Debt
  • Introduction to Structuring
  • Credit Risk and Credit Derivatives
• Digital Assets
  • Distributed Ledger Technology
• Additional Strategies
  • Funds of Funds
  • Equity-Linked Structured Products

The CAIA Association recommends that candidates devote 200 or more hours of study to prepare for the Level I exam.

Level II

The CAIA Level II exam consists of 100 multiple-choice questions, plus three sets of constructed response (essay) questions. Candidates must apply the skills and knowledge from Level I to gain a deeper understanding of issues involved in each of the areas of alternative investments. The Level II curriculum covers nine topics, listed below.

The Level II curriculum covers:

• Emerging Topics
  • Digital Assets: Bitcoin, Web 3.0, and DeFi
  • Private Equity: Value Creation in Private Equity, and Forecasting Returns
  • Portfolio Management: Rebalancing Illiquid Portfolios, Managing Liquidity for Capital Calls, and Assessing Long Term Performance

• Universal Investment Considerations
  • Professionalism and Fiduciary Responsibilities
  • Global Regulation
  • Geopolitics
  • ESG and Alternative Investments
  • ESG Analysis and Application
• Models
  • Modeling Overview and Interest Rate Models
  • Credit Risk Models
  • Multi-Factor Equity Pricing Models
  • Asset Allocation Processes and the Mean-Variance Model
  • Other Asset Allocation Approaches
• Methods for Alternative Investments
  • Valuations and Hedging Using Binomial Trees
  • Directional Strategies and Methods
  • Multivariate Empirical Methods and Performance Persistence
  • Relative Value Methods
  • Valuation Methods for Private Assets: The Case of Real Estate
• Accessing Alternative Investments
  • Hedge Fund Replication
  • Diversified Access to Hedge Funds
  • Access to Real Estate and Commodities
  • Access through Private Structures
  • The Risk and Performance of Private and Listed Assets
• Due Diligence & Selecting Managers
  • Active Management and New Investments
  • Selection of a Fund Manager
  • Investment Process Due Diligence
  • Operational Due Diligence
  • Due Diligence of Terms and Business Activities
• Volatility and Complex Strategies
  • Volatility as a Factor Exposure
  • Volatility, Correlation, and Dispersion Products and Strategies
  • Complexity and Structured Products
  • Insurance-Linked and Hybrid Securities
  • Complexity and the Case of Cross-Border Real Estate Investing

The CAIA Association recommends that candidates devote 200 or more hours of study to prepare for the Level II exam.

Historical pass rates

Grading begins once the examination window is closed, and Level I results are posted within three weeks after the final examination day. Level II exam results are available within six weeks after the last exam day, due to the need to grade essay questions.

The percentage of candidates that pass the CAIA exams changes from exam to exam.

Candidates may augment their study of the CAIA curriculum materials with third-party preparation programs. Those programs are offered by: Center for Business Studies - Zurich/Switzerland, Edge Designations, FK Partners - Sao Paolo, Brazil, Berkeley Middle East Training, Escuela FEF - Madrid, Spain, Afi Escuela de Finanzas - Madrid, Spain, Kaplan Financial - Hong Kong, Upper Mark, Kaplan Schweser - Globally, Kaplan Financial - UK, Top Finance

Chapters

Once the program and eligibility requirements have been met, CAIA Members are able to join Chapters. There are 35 CAIA Chapters around the world. Chapter activities include educational panels with expert speakers and deliver on CAIA's mission to educate Candidates and Members about relevant topics in alternatives.