Response by Sally M. Stalcup, president of Stalcup Consulting, which provides strategic consulting services to financial services companies.

Q: How does this financial crisis impact the validity of the CAIA (Chartered Alternative Investment Analyst) credential?

Managed Account Professional, Third-Party Platform Provider, Northeast Firm

Answer:

The credit crisis makes the chartered alternative investment analyst (CAIA) designation more valuable to investment managers and their clients. While some alternative (i.e., hedge fund) managers have received negative scrutiny recently for performance, remember that institutions for the most part are not changing their alternative asset allocations (some are actually increasing alternative allocations). You will find during times of uncertainty and instability that working with professionals who have their CAIA designation brings a level of trust and confidence to a relationship with investors.

Speaking to and working with clients is a natural part of investment management professionals' daily role. Being able to relate to and empathize with investors is necessary for client retention efforts. When investors know that the managers with whom they work are well-qualified, educated and experienced, they feel even more comfortable asking questions and discussing ideas and solutions. Having a CAIA is a reinforcement of the strength of the people and commitment of the firm with whom the investor is partnered.

Today, some of the top areas of interest for clients who invest in alternative investments include counterparty risk, regulation, legislation, leverage, valuation, risk management issues and organizational strength. Professionals with a CAIA are continuously educating themselves on the latest issues affecting those key areas. The CAIA program gives them the opportunity to attend conferences and seminars, and access research related to those topics, as well as network with their peers. Therefore, these professionals have the means to address these issues with their clients - or to find the answers if asked.

Consultants also find this designation a plus when evaluating managers. One East Coast consultant who asked to remain anonymous shared with me that, "this designation is getting more and more attention and is seen as a differentiator among managers."