Explosive growth in the use of alternative investments and calls for greater hedge fund regulation have heightened the need for standards within the industry. In Amherst, Mass., a not-for-profit organisation known as the Chartered Alternative Investment Analyst Association, has taken steps to fill the need. Designed for alternative investment specialists, the two-level examination programme covers real estate, commodities, private equity, managed futures and hedge funds. Candidates for the CAIA designation are asked to analyse, differentiate and evaluate situations pertaining to the alternative investment markets, and to understand industry-accepted standards for professional conduct.

According to the organisation's Executive Director, Craig Asche, the programme has attracted over 1,000 registrants from more than 300 institutions since its inception in 2002. Participants range in experience from new entrants to seasoned professionals and include investment advisors, financial consultants, security analysts, fund managers and administrators, lawyers, accountants and academics. Initially, it was only individuals who signed up for the programme, Asche noted, but more recently financial institutions (including Citigroup, The Government of Singapore Investment Corporation and the Pacific Alternative Asset Management Company) have been registering teams of specialists en-masse.

In time, Asche believes that the CAIA designation will carry the same clout in the alternative investment space as a CFA carries in the traditional sector. "This designation is rapidly gaining credibility within the industry," says Asche, formerly of Salomon Brothers and Swiss Bank Corporation. "It gives advisors a leg up on the competition, and advisees a higher comfort level knowing their advisor is qualified. In fact, we now have headhunters calling us for leads on qualified candidates."

The association was co-founded by Thomas Schneeweis (Director of CISDM, Editor of Institutional Investor's Journal of Alternative Investments and Board Member for the Managed Funds Association) and Florence Lombard (Executive Director of AIMA), both of whom serve on CAIA's Board of Directors. Alexander M. Ineichen, the other CAIA Board Member and Global Head of Alternative Investment Strategies (AIS) Research at UBS Investment Research, says that the course allows financial professionals with a broad array of educational backgrounds to move up the learning curve quickly and in a structured fashion. Ineichen is author of the book Absolute Returns - Risk and Opportunities of Hedge Fund Investing as well as numerous research publications including the two "In Search of Alpha" papers.

Other veterans on the CAIA team include Mark Anson, Chief Investment Officer of the California Public Employees' Retirement System (CalPERS) and Jane Buchan, Managing Director of the Pacific Alternative Asset Management Company (PAAMCO). Anson holds the CAIA charter and is a member of the Association's Curriculum and Examination Committee, while Buchan serves on the Association's Advisory Board.