2022 CAIA Exam Curriculum

As the go-to credential for the responsible fiduciary seeking to safeguard the best interests of the investor and the industry, we’ve worked hard to ensure that our curriculum incorporates learning objectives most relevant for building successful, future-focused portfolios.

In October 2021, in concert with the start of registration for our March 2022 exam cycle, we rolled out our latest round of curriculum updates for both Level I and Level II.

Level I will feature new and extended topics that better reflect the role of private capital in today’s institutional portfolios, while Level II will include additional content about the broadening investor base for alternative investments and the tools now available for allocators. Both will be offered to Candidates via our new digital-first format (available for purchase in digital OR digital + print).*

*Important Note: Between 10-20% of exam content has changed since the 4^th edition. The 2022 CAIA Program curricula not only encompasses the new learning objectives mentioned below, but many of the existing readings have been updated, altered, or expanded. Studying with the 2022 curriculum will reflect the most relevant and up-to-date version of the candidate body of knowledge and what the candidate can expect to see on exam day. The hard cover textbook no longer applies to the exam curriculum.

A Future-Focused Curriculum for the Informed Professional | Up-to-date and Digital

Private capital has become a core component/driver of institutional portfolios and the CAIA Program has responded in-kind by increasing and deepening our coverage of important topics in private equity, venture capital, real estate, and private debt.

Level I Updates I Level II Updates

The 2022 Level I curriculum, which provides the bottom-up view of each asset class, reflects the beginning of a multi-year process of this increased depth and coverage with new material on direct and indirect private capital investing.

The 2022 Level II curriculum, which provides the top-down view of an asset allocator, not only reflects the changing investor base in alternative investments but also the additional tools an asset allocator may use to achieve more optimal outcomes.

What's new? Level I

New Readings

The Evolution of Investing in Private Equity

The way in which institutional investors access private equity opportunities has evolved. While most investors invest in the asset class through a limited partnership structure, utilizing the expertise of general partners to identify opportunities, investors have increasingly opted to invest directly into portfolio companies without an intermediary. This new reading covers this evolution of accessing the asset class and identifies the different models for direct and co-investing an investor might utilize.

Private Equity Fund of Funds

Asset owners lacking the size and scale necessary to implement a private equity program in-house may instead opt for a private equity fund of fund structure. While fund of funds structures provides instant diversification benefits and outsourced expertise, there are other considerations an investor should make. This new reading covers the advantages and disadvantages, fee structures, diversification, and portfolio construction considerations, as well as utilizing secondary funds.

New Learning Objectives

Private Equity and Venture Capital Valuation and Exit Strategies

As capital formation has shifted increasingly towards private markets, we’ve added new learning objectives (Los) that deepen our coverage of the venture capital and private equity lifecycle. In the early stages, we’ve added coverage of venture capital valuation techniques, covering discount rates, and pre- and post-money valuation techniques. Additionally, we’ve increased our coverage of the different ways GPs might exit from a private portfolio company, whether it’s through the public markets (direct listings, special purpose acquisition corporations (SPACs), or initial public offerings (IPOs) or through other private market transactions (financial mergers or secondary buyouts).

Private Equity Funds

As the ways in which general partners (GPs) invest their capital increases in sophistication and complexity, we’ve added several new LOs on private equity funds. First, we’ve added coverage on the use of subscription lines of credit, their benefits and risks, and impact on performance. We’ve also added material that focuses on long-hold buyout funds, or funds that may hold assets for over a decade.

Venture Debt

Once considered a fringe asset class, private debt has matured into a core piece of institutional portfolios as public debt yields have fallen to near- or below-zero. Over the course of this maturation, private debt AUM has grown 20-fold since 2000. Venture debt, an alternative funding mechanism for start-up companies has also grown in prominence. We’ve added new material and coverage on the characteristics, terms, and risks of venture debt, and discuss why start-up firms would seek this kind of funding.

What's new? Level II

New Learning Objectives

Private Wealth Management

Access to alternative investments has increasingly become democratized, and these asset classes have become a more meaningful part of high-net-worth investor portfolios. While the family office model remains highly relevant, we’ve added coverage of private wealth management to the reflect the increased appetite for these assets. This new material covers business models, goals-based investing, behavioral finance, and portfolio management considerations.

Diversification in Private Equity Real Estate

Private equity real estate investors often diversify their portfolios by vintage year and geography. We’ve added new material on the return characteristics of private equity real estate by geography, and how diversifying across vintage year impacts the risk of the total portfolio. Additionally, we’ve deepened our coverage of cross-border transaction considerations, such as currency hedging, transaction costs, and taxes.

Qualitative Due Diligence and Emerging Managers

Quantitative factors, while important, only provide part of the picture when conducting investment or operational due diligence. In addition to quantitative due diligence factors, we’ve increased our coverage of some of the key qualitative factors an investor should assess when performing due diligence on an investment manager. We’ve also added coverage on the characteristics investors might consider when performing due diligence on managers with no or limited performance track records.

Updated Readings in Emerging Topics

Decentralized Finance (DeFi) and Blockchain

Two readings in Emerging Topics cover the innovative and rapidly expanding world of digital assets and cryptocurrencies. The first reading covers important introductory coverage and use cases of blockchain technology within the current market infrastructure. The second reading dives into the rapidly evolving architecture of decentralized finance (DeFi) and its building blocks. Topics covered in this reading include token standards, decentralized exchanges, blockchain derivatives, and on-chain asset management protocols. and it’s applications in financial markets.

Illiquidity risk and demystification

In order to reach their high return objectives, investors have allocated more capital towards illiquid assets and away from liquid assets. Two readings in Emerging Topics address illiquidity risk. The first covers how investors can balance the risk of too much illiquidity, and the second demystifies illiquid asset class returns into liquid market style factors.

Responsible Investing in Private Markets

While sustainable investing has far more coverage in public markets, the implementation in private markets has been a bit slower. We’ve included a guide to responsible investing in private equity that will help investors navigate issues that are specific to less liquid, longer-term investments.