Reflecting its commitment towards education in the hedge fund industry, the Cayman Islands chapter of AIMA (Alternative Investment Management Association) recently hosted a presentation on how its members can obtain the CAIA professional designation.
The CAIA (Chartered Alternative Investment Analyst) Programme was established in 2002 and has become the educational standard in the hedge fund industry with over 4,000 candidates from more than 50 countries.
Nelson Lacey, director of examinations for the CAIA Association and associate professor of finance at the Isenberg School of Management at the University of Massachusetts, addressed a well-attended industry audience at The Wharf Restaurant.
He outlined the programme, which covers the whole range of alternative investments and not just hedge funds, with private equity, real estate, commodities and futures all part of the curriculum.
"Accountants, risk mangers and real estate appraisers all had their own designations," Lacey said. "We wanted to create something that was relevant, rigorous and readable so it was suitable for busy professionals in alternative investments."
AIMA, which is the global body set up to promote education and best practice in the hedge fund industry, opened a Cayman chapter last year.
This was its seventh chapter worldwide and the first in the Caribbean for the non-profit organisation, which has corporate members in 46 countries.
"Today's global marketplace requires professionals to understand alternative investments beyond their national and professional borders," said Valia Theodoraki, chief executive of the Cayman Islands Stock Exchange and head of the education and research sub-committee for AIMA Cayman.
When AIMA Cayman was formed in May 2006, chairman Andy Stepaniuk, audit partner at KPMG, said bringing a CAIA representative to the Cayman Islands was a priority, because the qualification is specific to the alternative investments industry and a good way for young Caymanians and expat professionals to further their careers.
Typically those taking the examination have a wide range of experience, with some having over ten years in industry, while others have less than two.
The CAIA programme is split into two levels, with the first level using investment analytics to examine the fundamentals of each alternative asset class, while level two applies these analytics within an asset allocation and decision making framework.
The course also covers the CFA (Chartered Financial Analyst) standards of practice, with ethics an important part of the curriculum.
Candidates work through the study materials and books at their own pace and the level one examination features 200 multiple choice questions, while level two has 100 multiple choice questions plus three essays.
The exams take place twice each year (September and March) at numerous locations around the world, although Lacey said he is confident that by September it will be possible to take the examination in Cayman.
Lacey explained that on average, candidates need to devote around 120 hours of study to each level. Once both levels of the course have been passed, candidates can use the CAIA designation providing they have a university degree and more than one year of professional experience. Candidates without a degree are required to have four years experience. Programme fees include a $400 enrolment fee, plus $1,000 for each level, although AIMA members receive a discount. There is also an annual membership fee for the designation.
Some attendees wanted some advice on whether they should go for the CAIA designation or the more traditional CFA which has been around for 60 years with 91,000 members. Lacey said he thinks the CFA - which he holds - "is a great programme, but it is not a designation in alternative investments, so there is not so much overlap". Some 25% of CAIA members also have a CFA, he added.