I studied for the level 2 CAIA exam in mid-2016. At the time, I was an associate on the business development team at AQR Capital Management, a quantitative asset manager that offers alternative funds in liquid vehicles, among other products. As a member of the business development team, I was traveling to the offices of financial advisors talking about how adding liquid alternatives to a traditional stock/bond portfolio could lower risk and enhance both risk-adjusted and absolute returns. Over the prior three years, I was mentored by a senior person on the team, Bryan Johnson, who had earned both his CFA and CAIA charters and who I respected and looked up to (I still do to this day!). He encouraged me to go through both programs, and I’m so glad I did. The CAIA material provided more perspective on the liquid alternatives I was selling, including strategies like trend following and risk premia investing. It also gave me exposure to alternatives that I didn’t know much about, but that many of my clients had exposure to in their portfolios -- things like real estate, private equity, and fine art.
Graduating college in 2012, I was not in the workplace during the Global Financial Crisis, or the failure of Long-Term Capital Management, or the Asian Currency Crisis. Many of my clients had lived through them. I believe the CAIA curriculum offered me the opportunity to deeply learn and appreciate these important market events. While no two market crashes are exactly the same, it can be very helpful to study them and learn valuable portfolio construction and risk management practices from these past episodes.
Now, over five years since completing my CAIA studies, I have worked in various professional roles, but my connection to the CAIA community remains a constant. Most recently at Two Sigma, I worked with institutional investors to help them understand the risks and returns in their portfolios. I also researched markets and economy-related topics, such as how to better forecast inflation, how to model regimes using machine learning, and how to think about the role of crypto in a multi-asset class portfolio. In the next few weeks, I will be stepping into a new role at Runa Digital Assets, an investment firm focused on digital assets and Web3, to focus on a combination of things, including portfolio analytics and risk modeling. I believe digital assets are an exciting new frontier in investment management and can serve as an alternative, diversifying investment in a multi-asset class portfolio. I look forward to applying my CAIA knowledge base to this nascent asset class.
If there’s any advice I can offer, it is to not underestimate the value of ongoing education and a strong network. I’m so grateful to have had the opportunity to advance my understanding of alternatives through the CAIA curriculum and participate in the incredible community of CAIA Charterholders.
Alex Botte, CFA, CAIA is the incoming Head of Client and Portfolio Solutions at Runa Digital Assets, an investment firm specializing in the management of digital assets. Alex was previously a Vice President on the Client Portfolio Management team at Two Sigma Advisers LLC where she provided transparency to Two Sigma’s fund investors in the form of one-to-one and one-to-many communications in addition to producing investment management-related content and thought leadership. She was previously at AQR Capital Management, where she most recently served as a Product Specialist for the firm’s Global Asset Allocation strategies. Prior to AQR, she worked in Prime Services at Barclays. Alex holds a Bachelor’s of Science in Applied Economics and Management from Cornell University.