Is the CAIA really a passport to a hedge fund or private equity job?

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Breaking into a hedge fund or private equity firm is notoriously tough, with both sectors singling out a very small number of elite candidates at the junior level and then drawing on their experience when recruiting for more senior positions. Can the Chartered Alternative Investment Analyst (CAIA) really make a difference to your application?

Professional qualifications generally are not top of the priority list for either private equity companies or hedge funds recruiting. Hedge funds usually look for academically bright individuals who they can mould into the type of employee they want at a junior level, and a solid track-record thereafter, whereas private equity firms will hire investment banking analysts who have been trained by the bulge bracket firms.

To some, the CAIA is considered something of a lower profile Chartered Financial Analyst (CFA) qualification. It covers some of the same topics, takes 200 hours of study for each of its two levels – as opposed to 300 hours for each of three CFA levels – and pass rates are much higher. This September, 68% passed the CAIA level I and 62% made it through the second exam, compared to 38%, 42% and 49% for the three CFA levels respectively.

The numbers undertaking the CAIA qualifications are also comparatively tiny – there are over 118,000 CFA charterholders and just 6,700 CAIA members as of November 2013, a figure that increased by 500 over 12 months. To some this is an advantage – the glut of CFAs on the market now, combined with the fact that more back office employees and students are undertaking it, means that other qualifications could provide more of an edge.

The vast majority of CFAs also end up in institutional fund management – just 3% are employed by hedge funds and 5% by private equity firms. The CAIA, however, does appear to make a difference – at least at a junior level. According to figures provided to us by CAIA, the largest proportion of members (26%) are employed as analysts, suggesting that the qualification is a way to get your foot in the door at a hedge fund or private equity fund. 15% also work as portfolio managers, but just 3% of CAIA members describe themselves as traders.


The CAIA is, however, still regarded as something that’s preferred within job postings, rather than essential. Bill Vlaad, president of financial services executive search firm Vlaad and Company, says: “If the decision is between two candidates who are on a par, the CAIA designee will have the advantage.”

However, hedge fund headhunters in London say that it’s still not often asked for by employers, or that it’s a desirable factor along with the CFA or other qualifications. The fact also remains that the CAIA is decidedly more popular in America than in Europe – 53% of members are based there, 34% in EMEA and 14% in Asia-Pacific – and it isn’t a household name by any means.

The majority of those signing up to the CAIA still view it as a passport to a new job, though – 49%, according to figures provided to us. However, 43% also see it as an avenue to getting more responsibility in their current role, and 20% are aiming for a pay increase.

CAIA members we spoke to, who requested anonymity because they are not authorised to speak to the media, said that the qualification has benefited their career, but was not the automatic route to a new job they had hoped for. What was good for opening doors, however, were the networking events arranged by the body where they gained access to a wide range of financial services professionals, they said.

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