The CAIA Program
The CAIA program provides finance professionals with an extensive foundation of knowledge in alternative investment vehicles, including hedge funds, commodities, managed futures, real estate, and private equity.
The curriculum is designed by leading academics and practitioners, and is divided into two levels. Level I
introduces the candidate to the core topics in the field of alternative investments and Level II
covers advanced topics in the field. Both Levels I and II cover topics relating to ethics and standards of
professional conduct. The CAIA curriculum is revised twice a year to ensure adherence to the latest developments in research and industry practices.
Candidates registered for the CAIA program are assumed to have an understanding of the prerequisite material. For further information on the Prerequisite Program, please visit the CAIA prerequisite webpage.
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LEVEL I - September 2012 Curriculum Outline
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Topic 1: Professional Standards and Ethics
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Topic 2: An Introduction to Alternative Investments
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Chapter 1 - What is an Alternative Investment?
Chapter 2 - The Environment of Alternative Investments
Chapter 3 - Statistical Foundations
Chapter 4 - Risk, Return and Benchmarking
Chapter 5 - Correlation, Alternative Returns and Performance Measurement
Chapter 6 - Alpha and Beta
Chapter 7 - Hypothesis Testing in Alternative Investments
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Topic 3: Real Assets
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Chapter 8 - Land, Infrastructure, and Intangible Real Assets
Chapter 9 - Real Estate Fixed Income Investments
Chapter 10 - Real Estate Equity Investments
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Topic 4: Hedge Funds
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Chapter 11 - Introduction to Hedge Funds
Chapter 12 - Hedge Fund Returns and Asset Allocation
Chapter 13 - Macro and Managed Futures Funds
Chapter 14 - Event-Driven Hedge Funds
Chapter 15 - Relative Value Hedge Funds
Chapter 16 - Equity Hedge Funds
Chapter 17 - Funds of Hedge Funds
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Topic 5: Commodities
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Chapter 18 - Commodity Futures Pricing
Chapter 19 - Commodities: Application and Evidence
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Topic 6: Private Equity
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Chapter 20 - Introduction to Private Equity
Chapter 21 - Equity Types of Private Equity
Chapter 22 - Debt Types of Private Equity
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Topic 7: Structured Products
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Chapter 23 - Credit Risk and the Structuring of Cash Flows
Chapter 24 - Credit Derivatives
Chapter 25 - Collateralized Debt Obligations
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Topic 8: Risk Management and Portfolio Management
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Chapter 26 - Lessons from Hedge Fund Failures
Chapter 27 - Risk Analysis
Chapter 28 - Due Diligence and Fund Managers
Chapter 29 - Regression, Multivariate, and Nonlinear Methods
Chapter 30 - Portfolio Optimization and Risk Parity
Chapter 31 - Portfolio Management, Alpha, And Beta
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LEVEL II - September 2012 Curriculum Outline
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Topic 1: Professional Standards and Ethics
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Topic 2: Private Equity
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Chapter 1 - Private Equity Market Landscape
Chapter 2 - Routes into Private Equity
Chapter 3 - Private Equity Funds Structure
Chapter 4 - The Investment Process
Chapter 5 - Private Equity Portfolio Design
Chapter 6 - Fund Manager Selection Process
Chapter 7 - Benchmarking in the Private Equity World
Chapter 8 - Monitoring Private Equity Investments
Chapter 9 - Private Equity Fund Valuation
Chapter 10 - Private Equity Fund Discount Rate
Chapter 11 - The Management of Liquidity
Article A - Kojima, J. C. and D. J. Murphy. "Hitting the Curve Ball: Risk Management in Private Equity." The Journal of Private Equity. Spring 2011, Vol. 14, No. 2, pp. 18-42.
Article B - Aigner, P., S. Albrecht, G. Beyschlag, T. Friederich, M. Kalepky, and R. Zagst. "What Drives PE? Analyses of Success Factors for PE Funds." The Journal of Private Equity. Fall 2008. Vol. 11, no. 4, p. 63-85.
Article C - Klier, D., M. Welge, and K. Harrigan. "The Changing Face of Private Equity: How Modern Private Equity Firms Manage Investment Portfolios." The Journal of Private Equity. Fall 2009. Vol. 12, no. 2, p. 7-13.
Article D - Phalippou, L. "Beware of Venturing into Private Equity." Journal of Economic Perspectives. Winter 2009. Vol. 23, no. 1, p. 147-166.
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Topic 3: Commodities
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Chapter 12 - Key Concepts in Commodity Market Analysis
Chapter 13 - Role of Commodities in Asset Allocation
Chapter 14 - Methods of Delivering Long Commodity Exposure
Chapter 15 - Methods of Delivering Commodity Alpha
Chapter 16 - Commodity Indices
Chapter 17 - Investment Vehicles and Asset Allocation
Article A - Gorton, G. and K. G. Rouwenhorst. "Facts and Fantasies about Commodity Futures." Financial Analysts Journal. March/April 2006. Vol. 62, no. 2, p. 47-68.
Article B - Erb, C. and C. Harvey. "The Strategic and Tactical Value of Commodity Futures." Financial Analysts Journal. March/April 2006. Vol. 62, no. 2, p. 69-97.
Article C - Till, H. "The Oil Price Spike of 2008: Inferences from Price Relationships and Other Publicly Available Data." Chapter excerpted from the EDHEC Position Paper "Oil Prices: The True Role of Speculation." Amenc, N, B. Maffei, and H. Till. November, 2008.
Article D - Buyuksahin, B., M. S. Haigh, and M A. Robe. "Commodities and Equities: Ever a "Market of One?" The Journal of Alternative Investments. Winter 2010. Vol. 12, no. 3, p. 76-95.
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Topic 4: Managed Futures
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Chapter 18 - Managed Futures Industry Development and Regulation
Chapter 19 - Managed Futures Strategies
Chapter 20 - Risk and Performance Measurement in Managed Futures Strategies
Chapter 21 - Benchmarking and Investment Products
Chapter 22 - Investment Analysis in Managed Futures
Article A - Pojarliev, M. and R. M. Levich. "Do Professional Currency Managers Beat the Benchmark?" Financial Analysts Journal. 2008.
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Topic 5: Real Assets
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Chapter 23 - Real Estate Investments
Chapter 24 - Real Estate Indices
Chapter 25 - Real Estate Equity Valuation
Chapter 26 - Real Estate Investment Risks and Due Diligence
Chapter 27 - Residential and Commercial Mortgages
Chapter 28 - Mortgage-Backed Securities
Chapter 29 - Real Estate and Asset Allocation
Chapter 30 - Alternative Real Estate Investment Vehicles
Chapter 31 - Real Estate Development
Article A - Derwall, J., J. Huij, D. Brounen, and W. Marquering. "REIT Momentum and the Performance of Real Estate Mutual Funds." Financial Analysts Journal. September/October 2009. Vol. 65, no. 5, p. 24-34.
Article B - Kaiser, R.W. and J. Clayton. "Assessing and Managing Risk in Institutional Real Estate Investment." Journal of Real Estate Portfolio Management. October-December 2008. Vol. 14, no. 4, p. 287-306.
Article C - Inderst, G. "Infrastructure as an Asset Class." EIB Papers. 2010, Vol. 15, No. 1, pp. 70-105.
Article D - Martin, G. "The Long-Horizon Benefits of Traditional and New Real Assets in the Institutional Portfolio." The Journal of Alternative Investments. Summer 2010, Vol 13, No. 1, pp. 6-29.
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Topic 6: Hedge Funds
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Chapter 32 - Convertible Arbitrage
Chapter 33 - Global Macro
Chapter 34 - Equity Long/Short
Chapter 35 - Fund-of-Hedge-Funds and Investible Indices
Chapter 36 - Strategy Specific Due Diligence
Chapter 37 - Operational Risk
Article A - Amenc, N. et al. "Passive Hedge Fund Replication: A Critical Assessment of Existing Techniques." The Journal of Alternative Investments. 2008.
Article B - van der Zwan, M. "Global Macro: An Essential Diversifier of Returns." Investment Management Journal. 2011.
Article C - Reddy, G., et al. "Are Funds of Funds Simply Multi-Strategy Managers with Extra Fees?" The Journal of Alternative Investments. 2007.
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Topic 7: Structured Products
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Article A - Kazemi, H. "Credit Derivatives." CAIA Association. 2009.
Article B - Coval, J., J. Jurek, and E. Stafford. "The Economics of Structured Finance." The Journal of Economic Perspectives. 2009.
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Topic 8: Asset Allocation and Portfolio Management
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Article A - Perold, A. F. and W.F. Sharpe. "Dynamic Strategies for Asset Allocation." Financial Analysts Journal. January/February 1995. Vol. 51, no. 1, p.149-160.
Article B - Marcato, G. and T. Key. "Smoothing and Implications for Asset Allocation Choices." The Journal of Portfolio Management. Special Real Estate Issue 2007. Vol. 33, no. 5, p. 85-98.
Article C - Sheikh, A. Z. and J. Sun. "Defending the 'Endowment Model': Quantifying Liquidity Risk in a Post-Credit Crisis World." J.P. Morgan Asset Management.
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Topic 9: Risk and Risk Management
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Article A - Jorion, P. "Risk Management for Alternative Investments." CAIA Association. 2009.
Article B - Hill, J. "A Perspective on Liquidity Risk and Horizon Uncertainty." The Journal of Portfolio Management. Summer 2009. Vol. 35, no. 4, p. 60-68.
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Topic 10: Manager Selection, Due Diligence, and Regulation
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Article A - De Souza, C. and S. Gokcan. "Hedge Fund Investing: A Quantitative Approach to Hedge Fund Manager Selection and De-Selection." The Journal of Wealth Management. Spring 2004. Vol. 6, no. 4, p. 52-73.
Article B - Brunnermeier, M., A. Crocket, C. Goodhart, A. Persaud, and H. Shin. "The Fundamental Principles of Financial Regulation." Geneva Reports on the World Economy, International Center for Monetary and Banking Studies. 2009. Chapters 2 and 3.
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Topic 11: Research Issues and Current Topics
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Article A - Jumping the Gates: Using Beta-Overlay Strategies to Hedge Liquidity Constraints
Article B - Locking in the Profits or Putting It All on Black? An Empirical Investigation into the Risk-Taking Behavior of Hedge Fund Managers
Article C - Turning Green into Green: Social Past, Financial Future
Articles D and E - An Introduction to Risk Parity & Risk Parity: Rewards, Risks, and Research Opportunities
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