Newsletter - October 2009

Director's Comments:

Meeting Tomorrow Today

In today’s competitive business environment, staying the course means falling behind.

Fund managers cannot afford to be complacent simply because today they happen to have a “winning strategy.” Success attracts competition, and competition drives returns down. A successful manager (and investor) must nimbly adapt to changing market and regulatory environments, and must constantly be on the lookout for new opportunities. The same is true for service providers. They must strive to anticipate the future needs of their clients if they are to be properly positioned to add value.

This situation makes the responsibility of regulators—to protect investors—all the more challenging. They cannot be expected to stay ahead of these developments, but they must be quick to recognize change when it comes, quick to understand the broader market implications, and quick to adjust policy where necessary. Waiting too long to react, as we all know far too well from the subprime debacle, is not an acceptable option.

We at the CAIA Association face this same challenge. We cannot predict the future, but we must be swift to identify the new strategies and analytical tools that will become mainstream tomorrow, and to adapt our curriculum accordingly.

Our latest curriculum readings represent just such a response to these challenges. We have incorporated new material on distressed investing, multi-strategy hedge funds, risk management, credit derivatives, and the role of quantitative methods in due diligence, as well as previously published articles on the investment implications of climate change and the causes and consequences of the recent financial crisis.  Similarly, our newly unveiled website has been designed to meet the needs of our members tomorrow: to promote a greater exchange of knowledge, information, and ideas amongst the growing global community that is CAIA.

Resting on one’s laurels is not an option, not for the CAIA Association and not for the competitive investment professional. With registration for the March 2010 exams now open, we invite you to enroll today and prepare for the challenges ahead.

Best regards,

Craig Asche
Executive Director

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Exam Updates

March 2010 Exam Registration Now Open

Registration for March 2010 exams has now opened. Check out the following highlights:

CAIA Book Series: Candidates can now access the entire readings suite through the tailored Chartered Alternative Investment Analyst Series.

New Topics and Readings: New material in our updated curriculum includes readings on distress investing, multi-strategy hedge funds, risk management, credit derivatives, the role of quantitative methods in due diligence, as well as previously published articles on the investment implications of climate change and the causes and consequences of the 2007-2008 financial crisis.

Expanded Prerequisites Exam: A new set of readings covering quantitative methods has been added to the prerequisite requirements. We strongly encourage Level I candidates to take the new PDR before commencing their studies.

  • Register for an exam here.
  • Exam dates: March 04 - 19, 2010.
  • Early registration for the March 2010 examinations ends November 16, 2009.
  • Exam registration closes January 26, 2009.

September 2009 Exam Results Release Information

Level I: As of October 12th, 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 October 26th.

For complete grade release details, please visit Exam Results. For more information about the grading process, please review the Grading FAQs.

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New Website Features

If you have stopped by the CAIA.org site in the last few weeks, you will certainly have noticed our new look.  But the changes aren’t just cosmetic: we are pleased to offer you a fully revamped and restructured site, with all content organized into six easily traversable categories and reachable via “Quick Links” and sidebar shortcuts.

Designed to be more user-friendly and more targeted toward individuals’ needs and interests, CAIA.org also features expanded opportunities for connecting with other website users.  Here are a few highlights:

  • With our revamped user profile system, website users are able to share more detailed and profession-specific information with other users. You have full control over which information about yourself to reveal to the full CAIA Community, to candidates and members, or to members only. This new profile system makes possible…
     
  • A restructured Community Directory. Members are no longer limited to networking only with other members; candidates are not restricted to contacting only other candidates who are interested in forming exam study groups.

    Everyone who creates a CAIA.org account can appear in the Community Directory and choose which level of user can search for and view his or her information.  You can also connect with other website users via…
     

  • The CAIA Community, a space for the virtual meeting-of-minds that was created to help you maximize your networking potential. Here you will find the CAIA Blog, an informal backdrop for CAIA announcements and commentary, and CAIA Forums, networking and discussion tools for AI professionals, candidates, members, and prospective candidates alike.

    Here you can also receive targeted information about member and candidate events happening soon in your area. You can even chart events and chapter-specific activity around the world with our new interactive map display.
     

  • Visit our Community FAQs for more information about your CAIA profile, the Community Directory, and participation in CAIA Forums.

In order to take full advantage of our new site, please make sure to fill out your online profile completely. This will enable you to personalize fully your website experience.

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AllAboutAlpha.com's Special Post from CAIA's Program Director

Happy Sesquicentennial, Oil!
posted on October 6th, 2009 on AllAboutAlpha.com Hedge Fund Industry Trends

Almost by definition, alternative investments are constantly in a state of flux. While other disciplines – and even other branches of investment management itself – tend to build upon themselves over time, the alternative investment industry must continually re-evaluate where its been and where it is going. For us, this requires a focus on new and emerging ideas and an open dialogue that has become synonymous with blogs. For the Chartered Alternative Investment Analyst (CAIA) Association this requires that its curriculum be constantly re-evaluated and modified.

To that end, the CAIA Association has recently launched its latest curriculum modifications. Beyond being of critical importance for current candidates, these changes are also closely watched by current charter holders and by other professionals as an early indication of which recent industry developments are likely to become an enduring part of the alternative investment landscape.

In today’s guest contribution, the CAIA Association’s Hossein Kazemi discusses one such topic: oil futures.

Special to AllAboutAlpha.com by: Dr. Hossein Kazemi, Program Director, CAIA Association.

Oil is 150 years old. Exactly 150 years ago Edwin Drake, who was hired by Seneca Oil, drilled a 69.5 feet hole discovering oil in Titusville, Pennsylvania. Since then, oil has had a profound impact on the world history. Oil is more than a commodity. Numerous wars have been waged to secure it, revolutions have taken place to nationalize it and fortunes have been made and lost producing and trading it. When oil prices increased by 525% from January 2001 through July 2008, consumers, producers and national governments sought answers and began looking for reasons (scapegoats?) for this sudden rise in oil prices.

Unlike previous episodes of spikes in oil prices where OPEC and other oil producers were blamed by the public and the media, this time speculators in futures market were accused to be the main villain. It was common to hear that 60% of the rise in the price of oil was due to speculative activities.

In a paper titled “The Oil Markets: Let the Data Speak for Itself” (title in bold italics) Hillary Till attempts to clear up the misunderstanding and let the data tell the story. Till argues that fundamental factors (i.e., demand and supply) are much more important to the rise in the price of oil than the behavior of speculators in financial markets. She discusses the opaque nature of the oil markets where accurate estimates of current and potential supplies and demands are not available and therefore price fluctuations are exaggerated because of uncertainty about these fundamental factors.

Click here to continue.

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Chapter Notes

SPECIAL ANNOUNCEMENT! Mark your calendars! It is our pleasure to announce the upcoming launch of the CAIA Hong Kong chapter, scheduled to take place on November 6th, 2009. This is a real milestone in our history—CAIA Hong Kong will be our 10th global chapter.

The event will feature an outstanding panel of experts discussing “The Alternative Investment Industry in 2010: A Global Perspective”. Further details and invitations will follow.

BOSTON:
CAIA Boston held a social event on Tuesday, October 20th at the Hyatt Regency Hotel at 5:30 PM. This was a celebration for those who sat for the September exams hosted by CAIA Boston.

Also, mark your calendars for an educational roundtable entitled “Inflations vs. Deflations" scheduled on November 5th.  Click here to view details and to register.

CANADA:
Members in Toronto are invited to attend an Exam Congratulations and Social event on October 29th. Please view details and register by clicking here.

LONDON:
CAIA London is proud to present the next Annual Global Macro Panel, scheduled to take place on October 27th at the Landsdowne Club. The event will feature an exceptional panel of experts. Members and candidates can click here to view more details and to register. This event is not open to the public.

NEW YORK:
The Green Investing Symposium took place on October 14th at the Bloomberg Building from 2:00 PM to 6:00 PM. This event was organized by CAIA New York, in conjunction with the New York Society of Security Analysts (NYSSA), and the Connecticut Hedge Fund Association. Event details can be found here.

Following on this very popular event, we invite you to join the Green Investing conversation on the CAIA forum.

SAN FRANCISCO:
On September 22nd CAIA San Francisco held a highly successful event which featured Mark Anson, CAIA, President & Executive Director of Nuveen Investments.

SINGAPORE:
CAIA Singapore will be holding an educational event in November. This event will feature "Private Equity Industry in Asia" with Claudia Zeisberger, Affiliate Professor of Decision Sciences, and Program Director of the Center for Decision Making and Risk Analysis, INSEAD.

SOUTHERN CALIFORNIA:
Members in Los Angeles and surrounding areas are invited to attend an Exam Congratulations and Social event on November 5th. CAIA Association's Associate Director of Industry Relations Chris Holt will be in attendance to give you the latest association update. Please view further details and register by clicking here.

In addition, we are planning to hold several social events in non-chapter locations, including Milan, Luxembourg, and Houston, TX.

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Conference of Note

Please be sure to add this NYSSA event to your calendars for November 5 & 6: Alternative Investments and Other Wealth Imperatives for 2010 & Beyond. The New York Society of Securities Analysts has compiled a great agenda packed with useful strategies to prepare alternative investment professionals for the year ahead.

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