What do you think about the CAIA?

I'm seeing more and more people take the CAIA

What is the CAIA Exam?

Sometimes described as the "CFA for everything besides stocks and bonds," CAIA is the Chartered Alternative Investment Analyst designation. It is a two-level exam that focuses on, as the title suggests, alternative investments. Per the CAIA Association, the different levels focus on:

Level I:
Assesses your understanding of various alternative asset classes and your knowledge of the tools and techniques used to evaluate the risk-return attributes of each one.

Level II:
Assesses how you would apply the knowledge and analytics learned in Level I within a portfolio management context. Both exams include segments on ethics and professional conduct.

The Association's website has more details on the CAIA curriculum.

How Does CAIA Compare to CFA?

While both designations involve challenging exams, there are many differences between them. A related post, What is Better: CFA, MBA or CAIA? give a good overview of these differences.

How Useful is Chartered Alternative Investment Analyst Designation?

With CAIA being a newer designation, and one that focuses only on alternative investments, it may not have the same recognition that the CFA does. WSO community members offer their perspective on the designation:

  • CAIA may be helpful for manager research/Fund of Funds
  • Its good if you have interest in joining the AI teams at asset managers or wealth managers or working on asset allocation teams for pensions endowments family office roles etc.
  • The only people I have seen with CAIA are client service or sales type people that have some indirect involvement with hedge funds / other alternative investment products, more from a marketing type standpoint
  • It's good for pension asset allocation roles and AI focused teams / specialists at asset managers

WSO user @davidsandler , who has taken both the CFA and CAIA exams shares:

In short, CAIA is perfect for:

  • portfolio construction & advisory
  • multi asset investing
  • macro investing
  • figuring out what you want to specialise in
  • fundraising / sales at buy-side institutions

It's no good for:

  • a career in bottom-up stock picking
  • traditional finance routes (equities/bonds)
  • opening doors (it's not well known enough...yet)

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Comments (63)

Mar 10, 2015

Also interested

Mar 10, 2015

It might be somewhat useful as a Fund of Funds analyst. For direct investing, it is pointless.

    • 1
Mar 18, 2015

Would the CFA/CAIA designation be 100% required to get you a spot at a good fund? Or can an MBA do it alone?

    • 1
Mar 21, 2015

CFA / CAIA gives you knowledge. MBA gives you the network and opportunity to recruit. Notice none of these gives you the skills to be Bill Ackman / David Einhorn or Warren Buffet / Michael Price / Joel Greenblatt (Bill Ackman studies Warren Buffet, and the dude's killing it and has a HBS MBA).

Depends on your pre-MBA work experience. If your pre-MBA experience is middle-office / back-office like mine, you better prepare at least 3 very decent stock pitches (2 long, 1 short) and wow the interviewers. I am looking at the Columbia Business School student pitches published in their newsletter. Most of students had pre-MBA experience like "2 years BB IB and then some PE" or "worked in long/short fund or mutual fund", though for the latter I assume they want to be in PE or something post-MBA.

    • 1
Mar 24, 2015

.

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May 5, 2015
vanillathunder:

CFA / CAIA gives you knowledge. MBA gives you the network and opportunity to recruit. Notice none of these gives you the skills to be Bill Ackman / David Einhorn or Warren Buffet / Michael Price / Joel Greenblatt (Bill Ackman studies Warren Buffet, and the dude's killing it and has a HBS MBA).

Depends on your pre-MBA work experience. If your pre-MBA experience is middle-office / back-office like mine, you better prepare at least 3 very decent stock pitches (2 long, 1 short) and wow the interviewers. I am looking at the Columbia Business School student pitches published in their newsletter. Most of students had pre-MBA experience like "2 years BB IB and then some PE" or "worked in long/short fund or mutual fund", though for the latter I assume they want to be in PE or something post-MBA.

Which newsletter is that? I'm interested.

Mar 21, 2015

CAIA may be helpful for manager research/FOF. I do not know much about the curriculum so can't necessarily bash it. However, to lump it into the same sentence as the CFA is not appropriate; apples to oranges.

Mar 21, 2015

Its good if you have interest in joining the AI teams at asset managers or wealth managers or working on asset allocation teams for pensions endowments family office roles etc

But as someone said before, neither the CFA or CAIA makes you a competent investor - be it top down or bottoms up. I know more than a few fancy MBAs and or CFAs who can't identify opportunities in the market or create a decent thesis to save their life - and this is why any role in Asset Management generally trumps your experience and what you know about the markets over designation and branding - but those latter two will secure you more blank slate interviews

Best Response
May 3, 2015

My firm (AM) sponsors both CFA and CAIA. CFA is clearly the gold standard but I opted for the CAIA after reviewing the syllabus - to me it was far more interesting and far more 'niche'.

Another plus is you can feasibly earn the title within a year (vs 2/3 years for CFA). So early on in your career it can be a nice differentiator as well as giving you a very good feel of the financial landscape (and perhaps help decide what you want to specialise in). That worked for me - I came of the grad scheme with little idea what I wanted to do. Every other kid in the scheme was dead set on breaking into equities/bonds... Which put me off. And imo isn't where the money is flowing at the moment. I may be wrong but I think if you want to do well you need to specialise in something a bit more niche - the CAIA basically covers your options on this front.

You learn about everything other than stocks/bonds. And it's not just breezing over the topics - it goes into real detail on each. From my CAIA studies I made my mind up that REPE was for me and landed a gig shortly after completing the exam (though I should note - I don't think the CAIA helped open any doors... I had to explain to the interviewer what it actually is!). I explained it as the 'CFA for everything other than stocks/bonds'.

I've since done both the CFA and CAIA and can truthfully say I found the latter far more challenging and infinitely more stimulating. Career wise it should be the gold standard for multi asset / multi manager / multi strategy and maybe even macro investing. It's a great foundation for top-down, portfolio construction and allocation stuff. I did the CFA to sharpen up my financial analysis skills - you don't really get any of this from the CAIA. You won't come across a single balance sheet...!

In short, CAIA is perfect for:
- portfolio construction & advisory
- multi asset investing
- macro investing
- figuring out what you want to specialise in
- fundraising / sales at buy-side institutions

It's no good for:
- a career in bottom-up stock picking
- traditional finance routes (equities/bonds)
- opening doors (it's not well known enough...yet)

Hope this helps

    • 12
May 3, 2015

I'm also interested in this, I want to do the CFA level 1 or the CAIA next year (I will finish the uni next year) but I don't know which one to do.

May 6, 2015

I find the CAIA curriculum far more interesting than the CFA since the latter is a bit too heavy on accounting and corporate finance than I would like (although level III is biased towards portfolio management, which I love). However, the CAIA is nowhere near the CFA in terms of marketability, so I would take it if you were at a role where the firm sponsors you for it. Not sure how much value there is on taking it otherwise.

Jan 10, 2017

Just a question to anyone who has completed the designation, the registration is open in April for the fall exam in September. Is this adequate time to prepare for CAIA Level 1 or would people recommend starting to prepare early to reduce the work load later on?

Jan 10, 2017

I would go for the CFA and not for the CAIA. It's much more difficult and recognized in the entire financial services industry. Remember that no professional qualification will guarantee you a career! Only good performance on the job will...

Jan 10, 2017

I see more and more people taking CAIA just because of the easy win. Some of the people I know simply did CFA and CAIA at the same time, but generally you'd rarely start with CAIA over CFA if you want some sort of qualification unless you do asset allocation stuff or similar. Even then, it's going to be quite a bit of time until CAIA starts getting anywhere near the same recognition as the CFA is getting.

    • 1
Jan 10, 2017

As far as I know it's more useful for FOFs. I know a few consultants who got their CAIA with the aim of going to PE, none succeeded.

Jan 10, 2017

No success stories?

Jan 10, 2017
dzar:

No success stories?

A CAIA or CFA will not help you in breaking into PE or mezz. They are transaction-oriented businesses, so deal experience and network matter over all. Mezz will be a long shot for you, as a consultants background is less relevant (mezz funds are not very hands-on with port cos, if at all). If you're at a solid consultancy, your background would be relevant to a number of "operationally-focused" PE funds. See this thread for some PE firm examples:

http://www.wallstreetoasis.com/forums/recruiting-f...

Jan 10, 2017

BUMP

Jan 10, 2017

Do you have a CFA already? I would go for the CFA since it is more recognizable. I really haven't heard of too many people getting CAIA or even considering it, but maybe I'm out of the loop.

Jan 10, 2017

I already have the CFA, which quite frankly did not help me at all professionally. That's why I had to go to b-school.

Jan 10, 2017

None

Jan 10, 2017

I feel like CAIA are for those who are stuck in a BB role that focuses in the alt. space that don't want to put in the time for the CFA, but still want to say they studied for something.

Simple answer, don't waste your time.

Jan 10, 2017

Thanks. This was my gut feeling as well but just wanted some more input.

Jan 10, 2017

I have neither, but just because the CAIA is less well known or niche doesn't reduce its value. The CFA was new and unknown at one point. I'd say if you worked with alt investments or in private banking and needed to know about more than just mutual funds and valuation then it might have some value. To just study for it while not trying to purse an alt investment career might be a waste

Jan 10, 2017
TNA:

I have neither, but just because the CAIA is less well known or niche doesn't reduce its value. The CFA was new and unknown at one point. I'd say if you worked with alt investments or in private banking and needed to know about more than just mutual funds and valuation then it might have some value. To just study for it while not trying to purse an alt investment career might be a waste

CFA is useless as well in practice, but it is useful in a sense because it is recognizable and it shows well when clients see First Last CFA on your business card. CAIA is not well recognized so at this point it can't even achieve that, which basically makes it worthless.

Jan 10, 2017

I've considered this as well.

I think the CFA is more popular / known even to those outside of Finance.

Just guessing, but i'd think that a CAIA would be more useful in actual work than a CFA.

Just guessing, though.

Jan 10, 2017
handullz:

I've considered this as well.

I think the CFA is more popular / known even to those outside of Finance.

Just guessing, but i'd think that a CAIA would be more useful in actual work than a CFA.

Just guessing, though.

"Just guessing, though" - clearly.

Jan 10, 2017

good for pension asset allocation roles and AI focused teams / specialists at asset managers

Jan 10, 2017

The material on the CAIA is pretty interesting, but i haven't seen any evidence that it helps that much careerwise. I even think the CFA is overrated for those wishing to make a transition, but i know others strongly disagree.

Jan 10, 2017

Hi Mbavsmfin, would you mind clarifying what you mean by making a transition? To what... back/mid office to front office or say tech industry into finance in general?

I'm not personally as excited to do company specific research but I would like to do more market and portfolio related research and construction , Fund of Funds style for instance.

Jan 10, 2017

Interested in more people's thoughts and opinions on CAIA as well....

Jan 10, 2017

No, it won't.

Jan 10, 2017

no help.

Jan 10, 2017

And DO NOT put level 1 CAIA candidate on your resume as we know that is complete bullshit and anybody can go and register.

Jan 10, 2017
Pathus21:

And DO NOT put level 1 CAIA candidate on your resume as we know that is complete bullshit and anybody can go and register.

It is true that anyone can go and register, but there is nothing wrong with putting Level I candidate. It shows that you have interest in the hedge fund/p/e industry than the average person who wants to go into alternative investments.

Jan 10, 2017
Jan 10, 2017

How does the CAIA curriculum compare to CFA?

Don't know anyone with this designation, so interested in any more informed opinions...

Jan 10, 2017

ok i havent taken the CFA. The CAIA only covers alternative products - ie u wont be answering questions about equities/bonds and if u do get one it will be something about hedging and convertible bonds. there is no accounting on it. i hear there is overlap btw CFA and CAIA for the stat part. Supposedly the CAIA is less information to learn than the CFA. CAIA is II levels, CFA is III (obviously). MSIM is starting to make/ask their analysts take it for whatever that is worth. The exam is divided into questions about HFs, real estate, commodities, credit derivatives, private equity. It might be helpful to visit their website and download their "study guides" which should give a solid picture of what is tested. I think the CAIA will start getting harder as they start getting more members (and thus less desperate for members and more desperate for respect...)

Jan 10, 2017
Jan 10, 2017

I am curious about this as well.

Aug 17, 2017

I have a question.

I recently took the CAIA exam and have a lot of leftover material/study guides/powerpoints that I paid good money for. I am wondering if I bundled all my files if people would be interested in purchasing them. Thinking ~$40 for it all, compared to the hundreds and thousand dollar study guides.

It includes:

Summarized Power points on every chapter
CAIA 2017 Workbook
CAIA 2017 study guide
Digital copy of the book (worth atleast $30)
CAIA short answer test questions
Tons of additional practice problems.

Please let me know if there is any interest in this.

Dec 14, 2017

@ISellMoney PM me if this offer still stands

Jan 15, 2018

ISellMoney, PM me if your material is still available. Thanks

a.user

Jan 15, 2018

It is still available, I just sent you a pm with the details.

Feb 6, 2018

PM if still available

Feb 7, 2018

Just pm'd you.

Jul 20, 2018

To anyone who reads this in the future, this is clearly a trap and it's against the standards. If you are registered for the exam, you are held to that standard. The CAIA and CFA institute are doing things like this to sucker you in. This is copyrighted material. Don't violate the standards

Feb 7, 2018
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