Newsletter - February 2011
CEO's Comments
CAIA Foundation Expands Network of Global Partners
Last month, five diverse organizations came together to support the CAIA Association's ongoing work to make alternative investment education available globally through the new CAIA Foundation. 100 Women in Hedge Funds (100WHF), a non-profit organization for professionals in the alternative investment industry; Pacific Alternative Asset Management Company, LLC (PAAMCO), an independent fund of hedge funds investment firm; Kaplan Schweser, a leading global provider of financial and accounting educational solutions; Wiley, publisher of the CAIA Knowledge Series textbooks; and the CAIA Foundation have all made a commitment to a multi-year scholarship program. Ten scholarships will be awarded every year for the next five years to full members of 100WHF to earn the CAIA designation. These scholarships are only the beginning; the CAIA Foundation sets the stage for potentially unlimited scholarships, research, curriculum development, and more in the future.
Yet, the CAIA Foundation is not the only way the CAIA Association is rapidly expanding its global network. On March 2, the association will launch its thirteenth chapter in Los Angeles, less than three months after launching its 12th chapter, in France. We signed our third Academic Partnership agreement, and first in the US, with Clark University, providing finance students access to the CAIA Association's globally-accepted, standardized alternative investment curriculum. This month, more than 2,800 candidates from 70 countries will sit for the CAIA exams, and then we will welcome a new class to our more than 4,600 current CAIA members.
The news of the Foundation's first scholarships represents the most significant multi-partner collaboration in the Association's nearly ten-year history. The excitement is building at CAIA Association headquarters as applications for scholarships come in from talented individuals around the world seeking an opportunity to gain a rigorous education in alternative investments. Just two months into 2011, the CAIA Association has made breakthrough strides toward expanding its network of global partners, and has no plans to slow the pace.
Florence Lombard
Chief Executive Officer
Exam Updates
March 2011 Exam Appointment Scheduling
CAIA candidates who have not yet scheduled an exam appointment are encouraged to do so as soon as possible. Scheduling instructions are located on the CAIA website. You must be logged in as a registered candidate to view the instructions. If you encounter scheduling difficulties, please contact Pearson VUE directly for assistance. Contact details are included with your scheduling instructions.
- REMINDER—CALCULATOR POLICY
The CAIA Association allows candidates to bring into the examination the TI BA II Plus (including the Professional model) or the HP 12C (including the Platinum edition). No other calculators are allowed in the testing room. There are no exceptions to this policy. As in the past, exam proctors will require that all calculator memory be cleared prior to the start of the exam. - Identification Requirements: Candidates will not be allowed into the testing room without the required forms of identification. Please review the Association's ID policy here.
Registration for the next exam period opens April 4, 2011. Exam dates are:
- Level I Exam Session: September 19 – 30, 2011
- Level II Exam Session: September 12 – 23, 2011
Chapter Notes
The CAIA Association will launch its newest chapter—CAIA Los Angeles—on March 2. The launch will feature Mark W. Yusko, CEO & CIO of Morgan Creek Capital, who will make a presentation titled "Alternative Thinking About Investments." The CAIA Los Angeles chapter executive team will also be introduced:
Matt Balaker, CAIA
Investment Officer, Micro PIPE Capital Management
Eric Einertson, CAIA
Consultant Relations, Wilshire Associates
Tom Mahoney, CAIA
Private Wealth Advisor, UBS
Mick Swartz, CAIA
Associate Professor, University of Southern California
George Song, CAIA
CEO, Aptima Capital Management LLC
Jason ZumBerge, CAIA
Director, Strategic Relationships, Altegris Investments
UPCOMING CAIA GLOBAL CHAPTER EVENTS:
CAIA Boston and BSAS Educational Event
Thursday, March 10, 2011, Hyatt Regency
CAIA Canada Emerging Markets Educational Event
Tuesday March 15, 2011, Cambridge Club, Toronto
CAIA Los Angeles Chapter Launch and Educational Event
Wednesday, March 2, 2011, 5:00 PM, Beverly Wilshire Hotel
"Alternative Thinking About Investments"
Mark W. Yusko, CEO and CIO, Morgan Creek Capital Management
UPCOMING MEMBER COMMUNITY EVENTS:
CAIA Educational Event in Dublin
Thursday, March 31, O'Callaghan Davenport Hotel
RECENT EVENT LISTINGS AND RESOURCES:
CAIA Boston Networking Event, February 9
CAIA Canada Networking and Careers Event, January 20 | View Resources
CAIA Canada and AIMA Educational Event, February 9
CAIA Canada Networking Event and Glenlivet Tasting in Toronto, February 17 | View Resources
CAIA Hong Kong and HKSI Educational Event, February 24
CAIA London January Social, January 19, 2011
CAIA London February Social, February 16
CAIA New York Educational Event, February 8
CAIA Singapore Member Lunch, January 25
CAIA Singapore Networking Event, February 21
CAIA Switzerland Social Event in Geneva, January 19
CAIA Switzerland Educational Event in Zurich, February 17
CAIA Educational Event in Miami, January 19
CAIA Think-Tank Event in Dubai, February 1
CAIA Dinner in Cape Town, February 16
CAIA Networking Event in Belgium, February 17
CAIA Educational Event in Sydney, February 22
CAIA Educational Event in Melbourne, February 25
CAIA Networking Event in Seoul, February 28
CAIA Out Front
Hedge Funds World Middle East
March 7 – March 10
Dubai, UAE
Hedge Funds World Middle East is the region's premier event when it comes to the scope, depth and breadth of its attendees, be it hedge fund managers, investors, financiers or other industry experts including legendary economist, Nouriel Roubini. Steve Wallace, Director of Industry Relations (EMEA), will be moderating at the event. Chris Holt, Directory of Industry Relations (AMRS) will be chairing Day 2.
IMN's Public Funds Summit
March 14 – March 15
Huntington Beach, CA
IMN's Public Funds Summit is the premier conference for the public pension plan community, with 15 in-depth sessions and networking opportunities with public funds officers and trustees from around the United States. Keith Black, CAIA Association's Associate Director of Curriculum, will be speaking at the event. CAIA members receive a 10% discount on conference registration.
Smart Moves
Thomas Balcom, CAIA, has been elected as President of the Financial Planning Association of Broward County. An active FPA Board member for the past 7 years, he began leading the organization on January 1, 2011.
Balcom has been providing investment management advice to high net worth individuals for over 11 years. He is a member of the CAIA Class of July 2005. According to Balcom, "Possessing the CAIA designation adds a greater degree of credibility when meeting with prospective clients. The designation has allowed me to join an elite few within the investment community who utilize alternative investments."
Balcom is the Founder of IBIS Wealth Management, a fee-only, Registered Investment Advisor firm located in Boca Raton, Florida. Prior to opening IBIS, he worked for a boutique investment firm in Miami.
Balcom serves as an adjunct professor for the Certified Financial Planner program at Barry University. He is a Hurricane Club Council member for his alma mater, the University of Miami. In 2008, Balcom was the recipient of the Structured Product Association's Leading Edge Advisor Award for his innovative work with structured investments.
Michael Cimmino, CAIA, recently joined Crystal Capital Partners, LLC ("Crystal") as a Research Associate. Crystal was established in 1992 and has been exclusively focused on alternative investments. In his new position, Cimmino is primarily responsible for manager research and due diligence.
Prior to joining Crystal, Cimmino was an analyst with Atlas One Capital Management, a fund of hedge funds, primarily performing quantitative due diligence and manager research.
Cimmino credits his CAIA designation for providing him with a solid foundation in Alternative Investments, "As a Research Associate in a hedge fund due diligence role, the CAIA program has proved immeasurable and has allowed me to truly command a deep understanding of hedge fund performance drivers."
Cimmino graduated with a B.S. in Finance from Bentley College and received an M.B.A. from the University of Miami.
George Fisher, CAIA, has joined Charles Schwab in New York as Senior Product Manager for Alternative Investments. His responsibilities include the development and management of the firm's AI Source platform. He will utilize his expertise in absolute return strategies to help Schwab offer its clients a broad spectrum of investments including hedge funds, managed futures, private equity and real estate.
Fisher, who has 23 years of asset management experience, states: "As alternative investments occupy an increasing percentage of investor portfolios, strong knowledge of the asset class is mandatory. The CAIA program provides the foundation from which to observe and analyze the evolving landscape."
Prior to joining Schwab, Fisher served as Director of Alternative Investments at ThomasLloyd, a boutique fund-of-funds, where he sourced portfolio constituents. His experience includes business development at hedge fund KOM as Senior Analyst and international fixed income trading at Kankaku (currently part of Mizuho) as Vice President.
Fisher earned his CAIA designation in March 2007 and currently holds FINRA's Series 7, 24 and 63 licenses. He has a Bachelor of Science from Georgetown University where he majored in Japanese Studies and minored in Economics. He also received a Certificate in Asian Studies from Georgetown's School of Foreign Service.
Gabriel Gomez, CAIA, is an Investment Principal for DEFI Gestion SA, a Swiss Private Equity firm. His main responsibility is to find new investments in hi-tech start-ups and monitor them, with positions at the board of directors level. In addition, he is in charge of advising a local bank private equity fund of funds.
Gomez started his career at the Nestlé Research Center in the R&D field, and subsequently worked for ACM (managing entity of the America's Cup in Valencia) and private bankers Mirabaud & Cie. Most recently, Gomez worked for Strategic Investment Advisors (SIA), a fund management company, as an investment analyst.
According to Gomez, a CAIA member since October 2008, "The CAIA designation is well recognized in the private equity world and confirms you as an alternative investments specialist. It also offers an interesting opportunity for networking."
Gomez holds a Masters' degree in Biological Sciences from the University of Lausanne as well as a Master of Advanced Studies in Business Administration from HEC Geneva.
Joe Jacobs, CAIA, joined Two Sigma Investments as Portfolio Analyst in the Portfolio Management and Analytics group. He will be utilizing his multidisciplinary background to carry out quantitative portfolio construction, dynamic risk assessment, and return analysis for the multi-billion dollar hedge fund. Jacobs will also be wearing a "dual-hat" to develop new investment products for the rapidly growing Two Sigma Advisors business.
Jacobs, who earned the CAIA designation in 2009, writes that "finishing a time-intensive designation like the CAIA shows employers that you are seriously committed to professional development." He continues, "the broad, practical curriculum is an excellent complement to a formal finance education."
Prior to joining Two Sigma, Jacobs was Vice President at BlackRock in the Portfolio Analytics Group. As a senior development manager, he led the strategic design of valuation and risk analytics systems that grew to process over $9 trillion in fixed income, equity, derivatives, and currency positions for 100+ institutions each day.
Jacobs recently earned an M.B.A. with Distinction from the Stern School of Business at New York University, where he graduated at the top of his class in Banking and Finance. He also holds a B.S. in Electrical Engineering and Computer Science from the Massachusetts Institute of Technology and a B.S. in Management Science from MIT's Sloan School of Management. In addition to his CAIA designation, Jacobs is a CFA charterholder and a GARP Financial Risk Manager.
Umar Khan, CAIA, has joined EME Capital as a Director to develop their Alternatives platform. Initially, his key focus will be to develop the firm's business in the Middle East, Europe and Brazil. EME Capital is a London (Mayfair) based investment boutique focusing on M&A, Private Equity and Investment Advisory.
A member of the CAIA Class of September 2006, Khan believes that "the CAIA designation should certainly become the benchmark qualification within the alternatives industry." He points out that "the CAIA has not only benefited me with a thorough understanding of various alternative asset classes but also allowed me to question investments from a risk perspective."
Khan has 10 years of experience in Alternatives. He started his career at JPMorgan and for the last five years had been working with a New York based firm set up by former Goldman Sachs General Partners.
Stephen Kleckner, CAIA, has joined Euro Pacific Asset Management, a firm focused on investing in non-dollar denominated securities in local currencies, as a Senior Associate. In his new role, he will be assisting the Portfolio Manager with analysis, trading, and uncovering investment opportunities for a unique set of mutual funds designed to give investors diversification to the US dollar, while focusing on countries and currencies believed to have the most favorable fundamentals.
For Kleckner, one of the major attractions of working for Euro Pacific was the firm's approach (by design) to have low correlations to traditional U.S. assets; he believes that taking a non-dollar centric approach using currency diversification with an emphasis on commodity plays can serve as an alternative investment available to many retail investors. A CAIA member since October 2008, Kleckner explains, "Having the CAIA has helped me develop a non-traditional view of managing credit and currency risk to seek and analyze opportunities that expand the efficient frontier."
Previously, Kleckner worked at Westwood Management where he traded fixed income securities for the firm's institutional clients and performed credit market research supporting the Portfolio Management team. Prior to Westwood, he worked in the Private Debt group of APS Capital focused on trading distressed debt instruments. Kleckner received his BBA in Economics from the University of Texas at Austin.
James C. McGrath, CAIA, is the Director of Research at LGL Partners, a multi-family office and private investment firm. LGL Partners manages investments for successful families and institutions. He is responsible for formulating the firm's capital markets outlook, determining asset allocation parameters, conducting industry analysis, and analyzing and allocating to alternative investment opportunities. McGrath designed and manages proprietary investment evaluation technologies for the firm.
Prior to LGL, McGrath was with the Federal Reserve Bank, where he analyzed structured transactions and emerging payments. Previously, he developed trading systems at Bank of America, was financial engineer with the Principal Finance Group at UBS, and was a program trading analyst at Salomon Brothers.
McGrath is a member of the CAIA Class of March 2008. He writes: "Alternative investments are fundamental to our business. We allocate to hedge funds, private equity, and structured products. The CAIA program provided a solid foundation in these areas and has provided resources and contacts in the industry that are invaluable to extend my knowledge and capabilities."
In addition to the CAIA designation, McGrath is a CFA charterholder and has earned the FRM certification. He graduated with a B.S. in Economics from the Wharton School, earned a B.A. in Philosophy from the University of Pennsylvania, and a M.B.A. in Finance from the Yale School of Management.
Sven Schaltegger, CAIA, has joined the Real Estate Advisory team of PwC Switzerland as a Manager. In his new role, he is responsible for sourcing and managing real estate transactions while the team provides real estate valuation, transaction and consultancy services mainly to institutional clients.
Prior to PwC, Schaltegger was in charge of monitoring and controlling private equity, real estate and infrastructure fund investments at SCM Strategic Capital Management AG in Zurich. Previously, he worked at Partners Group AG in Baar as a buy-side analyst of listed real estate, infrastructure and private equity investments, and was an investment committee member of a fund investing in listed real estate stocks. Schaltegger also worked with UBS Global Management in the product development and structuring team of the bank's global real estate investment management business both in Zurich and in Hartford, Connecticut. He gained his first experience in real estate during his internships in the corporate finance real estate teams of Arthur Andersen and Ernst & Young.
A member of the CAIA Class of September 2007, Schaltegger writes, "Working through the CAIA curriculum helped me gain a better and more scientific understanding of alternative investments (at the time I only was familiar with real estate but less so with other types of AI such as hedge funds or private equity), an asset class, not usually covered intensively during university education. In addition, my CAIA membership provides me with valuable news and insights into the industry and has proved to be strong attestation of my knowledge about the AI industry."
Dirk Toedte, CAIA, has been appointed the Head of Distribution at Amundi Germany, the joint asset management company of Credit Agricole Asset Management and Societe Generale Asset Management.
Toedte is responsible for sales of the Amundi product range, long only as well as alternative products, to banks, private banks, asset management companies, family offices and platforms in the German market.
Toedte has more than 10 years of experience in the industry. He began his career at Societe Generale Asset Management in Paris as sales assistant for German, Austrian and Swiss institutional clients and then became sales manager for Switzerland and Austria. In 2005, Toedte was appointed head of distribution at the newly created German sales outlet, SG Asset Management (Deutschland) GmbH.
Having earned his CAIA designation in October 2009, Toedte writes, "The CAIA program is of great value in the alternative investment space. I enjoyed studying for the exams which perfectly complemented my previous studies in finance. The pursuit of the CAIA designation has enhanced my understanding of the different alternative asset classes and has given me the tools to provide superior service to my clients."
Toedte graduated from TU Berlin with a double degree in civil engineering and business administration, and also earned a diploma in business administration from ESCP-EAP in Paris. In addition to his CAIA designation, he is a CFA charterholder.
Iñaki Arcocha Toores, CAIA, is a Relationship Manager in the International Private Banking Division at Banco Santander. While continuing to manage the portfolios of high wealth individuals, his major responsibility is in team management.
After receiving a bachelor's degree in Business & Administration and a MBA from the University of Deusto in Spain, Arcocha began his professional career as a portfolio manager for high wealth individuals in a Family Office. Later, he was employed as a fund manager specialized in the banking sector at Banco Popular. "The desire to continue improving in the field of the portfolio management" landed Arcocha at BBVA Patrimonios, where he dealt with clients of the private banking segment.
A member of the CAIA Class of September 2008, Arcocha writes, "The CAIA designation has given me a step forward not only in my education but also in the quality of service I provide to my clients. In such a globally-connected and ever-changing world, a deep knowledge in a wide variety of investment assets is essential in ensuring a high level of investor satisfaction and in preparing for the future."
Michael Welz, CAIA, has been chosen as one of Institutional Investor News' 2010 Rising Stars of Foundations & Endowments. He was recognized as an up-and-coming professional in the foundation and endowment community who has achieved a demonstrable level of success in his career to-date, shown a commitment to continued growth and contributions to the industry, and who is poised to evolve into a leader in his field.
Welz is Vice President and Senior Investment Strategist of USI Advisors. He is involved on an ongoing basis in the development, implementation and monitoring of investment strategies for defined benefit and defined contribution as well as endowment and foundation clients. He is actively involved in all aspects of investment selection and monitoring and regularly conducts investment review meetings with clients.
Welz has over 10 years of experience in the investment consulting field. He writes, "The CAIA program has provided me with a broader understanding of Alternative Investment assets and strategies and with that has helped me in my professional development. The CAIA designation provides instant credibility when communicating with clients and prospects and serves as proof of a commitment to learn and achieve. In addition, active CAIA membership keeps me up to date on developments in the industry."
Prior to joining USI Consulting Group, Welz was part of an Institutional Consulting Group at Prudential Securities and Merrill Lynch. He was responsible for providing investment support and expertise to defined benefit and defined contribution plan sponsors by developing investment policies, implementing strategies and providing performance monitoring and evaluation services.
Welz is a member of the CAIA Class of September 2007. He is also a CFA charterholder, has earned the CIMA designation, and holds the FINRA series 7, 63, and 65 licenses. Welz earned a "Diplom Volkswirt" (graduate level Economics) from the University of Cologne in Germany. He attended advanced investment courses (offered by the Investment Management Consultants Association and taught through the Wharton Business School at the University of Pennsylvania) where he earned the Investment Strategist Certificate, as well as the Alternative Investments Certificate.
Curtis Williams, CAIA, has joined the Chicago office of Gray & Company, an institutional investment consulting firm, as a Research Analyst. In his new role, he performs manager research, manager due-diligence, asset allocation and investment research. He researches all alternative investments including hedge funds, timber, private equity, real estate and other investments for inclusion in portfolios of public plans, unions, foundations, endowments, health care funds and insurance companies.
Williams, who earned the CAIA designation in September 2010, writes that the CAIA "has given me a very deep and fundamental understanding of alternative investments. As I make investment decisions, I find that the knowledge acquired through the program has been very applicable and current. As more of our clients increasingly move assets into the alternatives space, I am able to offer intelligent and timely solutions to real problems mainly because I went through the program. In addition, I find the CAIA network to be very broad and supportive."
Prior to joining Gray & Company, Williams worked in different investment and finance capacities for a private real estate company, a global investment advisory company and two energy companies. He received his BS in Mechanical Engineering from Pennsylvania State University, a MS in Finance from Robert Morris University, a MS in Industrial Engineering from the University of Pittsburgh and an MBA from the University Of Chicago Booth School Of Business. He is also a CFA Level II candidate.
Conversation Pieces
In answer to December's poll, "In your opinion, what will be the prevalent way of investing in hedge funds in 2015?" 30% of respondents predicted Fund of funds, 28% of respondents predicted Managed accounts, 20% of respondents predicted Direct investment in offshore funds, and 18% respondents predicted Direct investment in onshore funds (UCITS III and others).
Michael Cimmino, CAIA, is the author of the January Member Poll. He is also featured in this month's Smart Moves.
It was recently revealed that household debt as a percentage of disposable income in Canada surpassed the United States for the first time in more than a decade. This increase also coincides with a rise in the average mortgage amount for a Canadian household. After receiving much praise for successfully navigating the recent financial crisis, do you think Canada will follow in the steps of the United States and other peripheral European countries?
Will Canada undergo its own housing crisis?
- Yes. The increase in interest rates (3 times since June 1) will only increase the cost of mortgage servicing.
- No. The government will continue to take preemptive steps, such as strengthening rules on refinancing and down payments.
- Yes. The government's tightening of rules for government-guaranteed mortgages will force borrowers into the private marketplace.
- No. Canada will avert a housing crisis and benefit from a general economic recovery in the United States.
Check back next month to see the results.
CAIA Foundation Offers Scholarships
Deadline: April 15
The CAIA Foundation was established in February as a vehicle for individuals and organizations in the finance industry to invest in developing the knowledge and talent base in the field of alternative investments. As part of the launch, the CAIA Foundation also announced a new scholarship program established by 100 Women in Hedge Funds and Pacific Alternative Asset management Company (PAAMCO) to support the educational growth of professionals in the area of alternative investments.
Under the program, 10 CAIA scholarships will be awarded each year for the next 5 years to qualified candidates. To be eligible for scholarships applicants must be full members of 100WHF, not be eligible for program reimbursement by their employers, and have one year of professional experience in the alternative investment industry. The 100WHF Scholarship Committee developed criteria for this Scholarship, and the CAIA Foundation will review and select the finalists.
The scholarships will cover enrollment and registration fees for CAIA Level I and Level II exams, the CAIA Knowledge Series textbooks provided courtesy of Wiley Publishing, the comprehensive CAIA Level I PremiumPlus Study Solution courtesy of Kaplan Schweser, and the first year CAIA Association membership fee.
The deadline to apply for the first round of scholarships in Friday, April 15. Applicants must apply online at http://foundation.caia.org.
CAIA Signs Academic Partnership Agreement with Clark University
Clark University Graduate School of Management students focusing on alternative investments will now have an edge over graduates from any other business school in the country, thanks to a new partnership with the Chartered Alternative Investment Analyst (CAIA) Association, a global not-for-profit organization dedicated to education, professionalism, and ethics.
“Alternatives are at the forefront of the asset management industry,” said Florence Lombard, CEO of the CAIA Association. “Through this partnership, faculty at the Graduate School of Management will be able to expand the alternative investment curriculum offering, and graduate students will have a real competitive advantage upon graduating.”
Visit CAIA.org for more information on the Academic Partnership Program and to read the press release on the Clark University partnership.