April 2008
- Director's Comments:
- Curriculum Update:
- Alternative Viewpoints...powered by CAIA:
- CAIA Events Roundup:
- Upcoming events for candidates in London, Boston
- CAIA travels to Sweden, Norway, Denmark and New York
- CAIA Poll:
Director's Comments:
Regulation in a post-Credit Crunch World
We, as humans, are always seeking equilibrium - in our personal lives, in our professional lives, and in the communities with which we interact. Even when we work in high volatility environments, we strive to understand our surroundings and achieve balance among the waves. So when major paradigm-splintering events occur, we react to restore order from the chaos.
Take for example the tragic events of September 11, 2001. In the wake of this horrific day, the US government jumped to correct what were perceived as financial loopholes that contributed to the events. The result of their quick actions was the Sarbanes-Oxley Act. Whether reasoned or not, the US government felt compelled to act, to do something, and so they did. Unfortunately, as the Sarbanes-Oxley Act demonstrated, action in and of itself does not suffice.
In the midst of great uncertainty, it takes great courage to choose a path of calm and deliberation. Our impulse is to take action, to change course, and to throw out the rulebook and start anew. However, history does not bear this out. Ill-considered and hasty action often proves counter-productive or even disastrous. Which brings us to today.
As I write this, the financial markets and the regulators that oversee them are at a critical juncture. They have been engaged in an extended period of finger-pointing and are just beginning to put away their petty bickering in order to address larger concerns.
Globally, regulatory bodies such as the UK Financial Services Authority, the European Union, the Swiss Federal Banking Commission, and the US Department of the Treasury and Federal Reserve are all engaged in the search for both paths out of this credit crunch and systems to avoid repeating our mistakes.
In the last few weeks, Treasury Secretary Henry Paulson has made some particularly sweeping recommendations, from increasing investment bank oversight to merging the SEC and CFTC. His bold call for a near-overhaul of the entire US regulatory structure has caused a significant stir and will continue to inspire debate and, one assumes, eventual action.
It was his commentary on the role of regulators, however, that I found of particular note. In Secretary Paulson's proposal, regulators would be responsible for ensuring broad market health through a principles-based approach. Rather than focusing on complex sets of rules, regulators would assume true oversight of the marketplace and provide the expansive perspective that we now know was lacking.
It is this big-picture focus and principles-based approach that I hope we will continue to see applied as this conversation continues. As this credit crunch has taught us, global markets will require global coordination and cooperation, as well. It is also my hope that as the various regulatory bodies pursue their courses, they will follow the model of the US and UK Hedge Fund Working Groups, and collaborate to create more streamlined regulation and oversight for the benefit of all.
In the end, whatever particular strategies and tactics emerge from the process, I believe that taking the time to step back and see the forest for the trees, to engage in global collaboration, and to make strategic decisions that take into account the insights of all industry stakeholders will be the difference between another Sarbanes-Oxley Act and a true long-lasting solution to the credit crunch lessons.
Best regards,
Craig Asche
Executive Director
Exam Updates
September 08 Registration Opens
Register for an exam here
Exam dates: September 08 - 19, 2008
Early registration for the September examinations ends May 13, 2008
Exam registration closes July 29, 2008
March 08 Level I Exam Results Available
Level I: As of April 7th, candidates who completed the Level I examination can log in to the website and receive notification of their general exam results.
Level II: Candidates who completed the Level II examination can log in and receive their general exam results beginning April 21st.
For complete grade release details, please visit Exam Results. For more information about the grading process, please review the Grading FAQs.
Curriculum Update:
Significant Level II Updates Now in Place
In order to remain current, significant curriculum updates have been made to the September 2008 Level II exams. Registration opened on April 1st for the Level I and Level II exams.
The September Level II exam will include updates of the Level II Topics 7 through 11, collectively known as the CAIA Level II Current and Integrated Topics. A total of 15 new articles have been added to the new curriculum. A sample of the new topics includes:
• 130/30 strategies
• Infrastructure investments (e.g., roads, bridges, etc.)
• Hedge fund contagion/systemic risk
• Credit crisis
• Hedge fund replication
• Private Equity and Hedge Fund Convergence
• MiFID
The recent market volatility, other economic events and the need to stay current and forward-looking led to this year's changes, according to Craig Asche, Executive Director.
The revised headings for topics 7 through 12 are now:
Topic 7: New Products and Strategies
Topic 8: Securitization and Structured Products
Topic 9: Asset Allocation
Topic 10: Research in Alternative Investments
Topic 11: Regulation
Topic 12: Current Topics and Case Analyses
The CAIA Association created the Curriculum Development Initiative (CDI) in spring 2007 to spearhead this year's curriculum changes. Nearly 70 CAIA members participated in the CDI, headed by CAIA's Director of Curriculum, Kathryn Wilkens, and supported by CAIA Senior Advisor, Hossein Kazemi.
To view the press release from March 26th, please click here.
Alternative Viewpoints... powered by CAIA
"Sustainable Hedge Fund Performance" , posted on March 31, 2008 on AllAboutAlpha.com
Daniel Capocci, Ph.D., CAIA
KBL European Private Bankers
Every year, pure random chance dictates that exactly half of all investors will outperform the median and half underperform the median. The Holy Grail of alpha generation, of course, is to outperform more than pure random chance should allow. In other words, to produce persistent alpha.
Three fields exist that examine hedge fund performance. The first includes studies that compare the performance of hedge funds with equity and other indices (some authors conclude that hedge funds are able to outperform these indices, whereas others are more cautious in their conclusions).
The second field of hedge fund performance analysis compares the performance of hedge funds with that of mutual funds (where some have found that hedge funds constantly obtain superior performance to mutual funds, although lower and more volatile returns than the reference market indices considered.)
Finally, the third group of hedge fund performance analysis examines the persistence of hedge fund returns. Persistence is particularly important in the case of hedge funds because the hedge fund industry has a higher attrition rate than mutual funds.
Click here to continue...
CAIA Events Roundup
Upcoming Candidate Events
The London and Boston CAIA chapters will be hosting "Congratulations & Commiserations" socials for CAIA candidates who recently sat for the March 2008 exams.
If you registered for a Level I or Level II March 2008 exam and live in the greater London or greater Boston area, you will receive an invitation in the next few weeks.
Our members look forward to seeing you there!
CAIA Global Travels
CAIAA is excited to announce our travel schedule for the next few months. In 2008, we are focusing on cities with emerging AI markets as well as those where CAIAA has an established and active presence. Below are some of the locations we plan to visit this spring.
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2008 Spring Travel Schedule
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May
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13th & 14th
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15th
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16th
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June
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2nd & 3rd
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4th-6th
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*Please note that these dates are subject to change.
If you would like to schedule a private presentation for your firm to learn more about the CAIA program, please email us at events@caia.org.
Stay tuned for more exciting news as CAIAA continues to expand its global reach. We look forward to seeing you on the road!
CAIA Mini Quiz
Have 15 minutes to spare before heading off to your next meeting? Feel like putting your AI knowledge to the test? Take a CAIA mini quiz!
Derived from our sample Level I and Level II exam questions, the CAIA mini quiz is timed, the results are tallied, and the correct answers appear beside each question. Quick? Yes. Painless? You be the judge...
CAIAA is Hiring
Interested in joining the CAIA Association team? We're looking for exceptional professionals to help us meet our growing outreach and program development needs.
The Association is experiencing unprecedented growth and offers competitive salary and benefits. Contact the CAIA Association at hr@caia.org for more information.
Program Director
The Program Director is responsible for oversight of the curriculum and examination development process. The Director coordinates the work of both the Director of Curriculum and the Director of Examinations ensuring their smooth operation.
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Director of Industry Relations
The Director of Industry Relations supports the strategic objective of promoting the CAIA designation by coordinating and executing outreach to the investment community. These institutions include, but are not limited to, financial firms, industry associations, and regulatory bodies.
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Exam Item Coordinator
The primary purpose of this position is to assist in the management of examination items, including but not limited to the revising and organizing of new and existing items.
The secondary purpose of this position is to manage the CERTS database by designing a proper hierarchy structure of our program and organizing the movement of items in and out of CERTS. The position contributes directly to the main mission of the examinations area.
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CAIA In the News
Below are some recent stories in which the CAIA program, members and/or Association appeared.
- Hedge funds grew 14.5% in 2007 (Investment News, April 7, 2008)
- Vulture venture (San Diego Union-Tribune, April 6, 2008)
- Insight into CAIAA curriculum changes and alternative investments focus (Opalesque, April 2, 2008)
- The Alarm isn't False (Alpha Magazine, March 2008)
- The Source of the Future George Soros (Expansión, March 12, 2008)
- CAIAA Expands to Chicago (HedgeWorld.com, February 25, 2008)
- Asia-focused hedge funds say aloha to Hawaii (Financial Times, January 14, 2008)
- Alternative Investments Performing Well (CNBC Asia Squawkbox, December 2, 2007)
- Pensions' Taming of the Hedge Fund (HedgeWorld.com, November 13, 2007)
- Gibraltar Gains Ground In Hedge Fund Industry (Vox, November 11, 2007)
- People Briefs: CAIAA Names New Canadian Chapter Head (HedgeWorld.com, November 8, 2007)