What Exactly is CAIA? What You Can Do with it and How to Earn it

The CAIA credential is worldwide regarded as the gold standard for alternative investment analysis, implementation, and standards of practice. This blog will explain the CAIA designation, what an alternative investment analyst performs, how to become a CAIA charterholder, and what you can accomplish with the designation.

What Exactly is the CAIA Designation?

The CAIA Charter is the worldwide recognized credential for professionals who manage, evaluate, distribute, or regulate alternative investments such as hedge funds, venture capital, private equity, and real estate. It is offered by the CAIA Association. You will become a Chartered Alternative Investment Analyst after finishing the CAIA program, joining a growing network of 9,000 professionals from over 80 countries. Not only that, but you'll be investing significantly 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.

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.  

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