ALTERNATIVE INVESTMENTS SUMMIT MAY 7TH 2018 · State of Alternative Investment – 7 About CAIA...

ALTERNATIVE INVESTMENTS SUMMITMAY 7TH 2018

Speaker: Keith Black, PhD, CFA, CAIA (Managing Director, CAIA)

Panel:Dan Schwartz, CFA (Vice President, AQR)Eileen Duff (Managing Partner, iCapital)David Hemming (Senior PM, PowerShares by Invesco)

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The State of Alternative Investments: A Global ViewKeith Black, PhD, CFA, CAIA

Showcase your Knowledge @CAIA_Keith Black@CAIAAssociation

State of Alternative Investment – 7

About CAIA Association

The global leader in alternative investment education Non-profit established in 2002, based in Amherst, MA, with

offices in Hong Kong, Singapore, Geneva, and London Over 9,000 current charterholders in more than 90 countries 30 vibrant chapters located in financial centers around the

world More than 150 educational and networking events each year Excellence in AI education through the CAIA designation and

the Fundamentals of Alternatives certificate program


Alternative Investment Education

Alternatives currently represent over $14 trillion in assets under management, while assets in liquid alternatives have grown substantially.

The CAIA Association Mission: Establish the CAIA designation as the benchmark for alternative

investment education worldwide Promote professional development through continuing education,

innovative research and thought leadership Advocate high standards of professional ethics Connect industry professionals globally


The CAIA Charter Designation

Globally recognized credential for professionals managing, analyzing, distributing, or regulating alternative investments.

Highest standard of achievement in alternative investment education.

Comprehensive program comprised of a two-tier exam process: Level I assesses understanding of various alternative asset classes

and knowledge of the tools and techniques used to evaluate the risk-return attributes of each one.

Level II assesses application of the knowledge and analytics learned in Level I within a portfolio management context.

Both levels include segments on ethics and professional conduct.


Fundamentals of Alternative Investments

The Fundamentals of Alternative Investments certificate program provides a foundation of core concepts in alternative investments. Fundamentals fills a critical education gap for those

who need to understand the evolving landscape of alternative investments.

Online, 20-hour, self-paced course Earns CE hours for the CIMA®, CIMC®, CPWA®, CPA ®, and CFP®

designations Understand the core concepts in alternative investments Gain confidence in discussing and positioning alternatives


Are US Equity Markets Rich?

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

S&P

500

P/E

Ratio

S&P 500 P/E Ratio

Source: CAIA and Bloomberg. Data through February 2, 2018.


Fixed Income 30+ Year Bull Market

-2

0

2

4

6

8

10

12

14

16

18

Yiel

d

German Bund 10 Year US 10 YearSource: CAIA and Bloomberg. Data through February 2, 2018


Asset Class Performance

Source: CAIA and Bloomberg. Quarterly returns. Annualized volatility and max draw-down are from December 2006 – September 2017.

Ending Sept 2017

1 Yr 5 Yr 10 Yr Ann. VolDraw-down

S&P 500 18.6% 14.2% 7.4% 15.7% -45.8%Barclays US Aggregate 0.1% 2.1% 4.3% 3.3% -3.0%US 60/40 10.9% 9.3% 6.6% 9.1% -27.4%

MSCI World 18.2% 11.0% 4.2% 17.1% -49.0%Barclays Global Aggregate -1.3% 0.5% 3.3% 6.2% -7.2%Global 60/40 10.1% 6.8% 4.3% 11.0% -30.9%

Bloomberg Commodities -0.3% -10.5% -6.8% 19.7% -65.9%HFRI Fund Weighted Composite 7.1% 4.7% 3.1% 7.4% -19.0%NCREIF Timberland 3.3% 7.1% 5.2% 4.7% -5.7%NCREIF Farmland 6.2% 12.7% 12.6% 5.5% 0.0%NCREIF Property 6.9% 10.3% 6.2% 5.7% -23.9%Cambridge Associates US Private Equity 16.8% 13.3% 9.6% 9.0% -25.1%Cambridge Associates US Venture Capital 8.0% 14.1% 8.9% 8.2% -18.4%

Global Invested Alternative Assets Portfolio 8.3% 9.3% 6.3% 6.9% -21.9%US 40% Stocks/40% Bonds/20% Portfolio 8.9% 8.4% 6.3% 7.3% -21.9%Global 40% Stocks/40% Bonds/20% Portfolio 8.2% 6.5% 4.6% 8.8% -25.1%


Public Pension Investment Returns Assumptions

Nearly three-fourths of Public Pensions have reduced their investment return assumption since fiscal year 2010, resulting in a decline in the average return assumption from 7.9% to 7.5%.

Should projected returns continue to decline, investment return assumptions are likely to also to continue their downward trend.


Market Size of Investments

Source: 2016 Estimates from Aon Hewitt, HFR, Barclays, Preqin

Traditional Investments

Alternative Investments

U.S. Equity $21,100 Private Equity $4,200 Other Developed Market Equity $15,100 Hedge Funds $3,000 Emerging and Frontier Market Equity $4,100 Real Estate Equity $6,700

Emerging Market Debt $3,000 Infrastructure, Farmland, Timberland, and Private Energy

$620

High Yield Bonds and Bank Loans $3,200 Commodity swaps, ETPs and MTNs $230 Dollar Bonds $19,300 Real Estate Debt $6,000 Other Bonds $21,100 Cash $5,100 Total (in $billions) $98,000 Total $14,750


Participation In Alternatives

Source: Preqin Investor Outlook: Alternative Assets, H1 2018


Institutional Investor Allocation



Alternative Investment Allocations

The largest endowments have average allocations of: 13% US equity, 19% non-US equity, 11% in fixed income and cash 24% hedge funds, 19% PE/VC, 14% real assets

Source: NACUBO-Commonfund Study of Endowments, 2017

0%

5%

10%

15%

20%

25%

30%

Real Estate Hedge Funds Private Equity + VentureCapital

Natural Resources

2002 2004 2006 2008 2010 2012 2014 2016 2017


Average SWF Asset Allocation

Source: “How do Sovereign Wealth Funds Invest? A Glance at SWF Asset Allocation,” E. Hentov, State Street Global Advisors, December 2015

48.3% 43.8%33.3% 34.8%

35.3% 40.0%

41.0% 37.6%

15.4% 16.2%25.7% 27.5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2002 2007 2012 2014Cash and Fixed Income Equities Private Markets


Avg. Asset Allocation by Investor Type

Source: Preqin 2016

5.4%

11.0%

7.9%

2.5%

5.8%

8.3%9.0%

3.2%

6.3% 6.2%

7.4%

N/A

11.0%

19.0%

6.0%

3.5%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

Private Equity Hedge Funds Real Estate Infrastructure

Private Pensions Public Pensions Sovereign Wealth Funds Endowments and Foundations


Key Issues Facing Hedge Funds in 2018


3%

3%

13%

17%

19%

19%

21%

38%

38%

65%

70%

Notable Investors Exiting Asset Class

Interest Rates

Portfolio Management

Pricing/Valuations

Regulation

Transparency

Governance

Volatility/Uncertainty in Global Markets

Perception of Industry by Public

Fees

Performance

Prop

ortio

n of

Res

pond

ents


Estimated Hedge Fund AUM Growth

$3,210.7

($500)

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Estimated Assets Estimated Asset Flow

Source: HFR® Global Hedge Fund Industry Report – Fourth Quarter 2017 | Copyright 2017. All rights reserved. | www.HedgeFundResearch.com


Estimated Alternative UCITS AUM Growth

Source: LuxHedge Database. Data as of December 31, 2017

0 €

50 €

100 €

150 €

200 €

250 €

300 €

350 €

400 €

450 €

500 €

AUM

(Mio

Eur)

456.8 €


Liquid Alternative Market Growth

Source: CAIA and Morningstar

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Real estate-linked Nontraditional bond Bear Market Commodity CurrencyEquity Market Neutral Long/Short Equity Managed Futures Multialternative


Flows from Active Management


Estimated Assets by Strategy

Source: HFR® Global Hedge Fund Industry Report – Third Quarter 2017 | Copyright 2017. All rights reserved. | www.HedgeFundResearch.com

Alternative UCITS

Total Hedge Fund Industry


Estimated Number of Funds: HF vs. FoF

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

FoF HF



Funds with Inflows vs. Outflows

Outflows52.82%

Inflows47.18%

Single-Manager Funds

Outflows78.00%

Inflows22.00%

Fund of Funds



Distribution of Industry Assets: Firm AUM Tier

46.11%

15.51%

10.77%

7.46%

13.70%

6.45%

By # of Firms

< $100 Million $100 to $250 Million $250 to $500 Million$500M to $1 Billion $1to $5 Billion > $5 Billion

1.01%1.76%2.68%3.64%

22.05%

68.86%

By Firm AUM Size

< $100 Million $100 to $250 Million $250 to $500 Million$500M to $1 Billion $1to $5 Billion > $5 Billion



Rising Sector Dispersion

Source: CAIA and Bloomberg. Data through February 6, 2018

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

Gro

wth

of $

1 w

ith th

e S&

P 50

0 TR

Cor

rela

tion

3 Year Rolling Correlation with S&P 500 Index

0.91 - Technology0.91 - Industrials0.90 - Consumer Discretionary0.85 - Financials0.83 - Materials0.81 - Health Care0.79 - Average0.75 - Consumer Staples0.69 - Energy0.41 - Utilities$2.24 - Growth $1 of SPX


Private Capital AUM by Asset Class

Source: Preqin Online Products

1,215

1,673

2,238 2,2582,456

2,7583,038

3,288

3,8053,944

4,268

4,582

4,925

0

1,000

2,000

3,000

4,000

5,000

6,000

Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Jun-17

Ass

ets u

nder

Ma

nage

men

t ($b

n)

Private Equity Private Debt Real Estate Infrastructure Natural Resources


Private Capital Dry Powder by Asset Class


1,004

234

249

160

181

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17

Dry

Pow

der

($bn

)

Private Equity Private Debt Real Estate Infrastructure Natural Resources


Private Equity Assets Under Management

Source: Preqin Private Equity Online

582 594 598 663 713

888

1,162

1,477 1,4301,586

1,7331,807

1,947

2,189 2,2422,388

2,582

2,829

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Jun-17

Ass

ets u

nder

Ma

nage

men

t ($b

n)

Dry Powder ($bn) Unrealized Value ($bn)


Private Equity Dry Powder by Fund Type


256307 325 311 291

388

528

635682 675

619 599560

674 689

754

838

954

0

200

400

600

800

1000

1200

Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17

Dry

Pow

der

($bn

)

Buyout Venture Capital Growth Other


Annual Capital Called up and Distributed by Private Equity Funds


-200

-100

0

100

200

300

400

500

600

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 H1 2017

Capital Called up ($bn) Capital Distributed ($bn) Net Cash Flow ($bn)


Venture Capital Public Market Equivalent

Source: Preqin Online Products . As of June 2017

0.60

0.70

0.80

0.90

1.00

1.10

1.20

1.30

1.40

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

PME

Val

ue (X

)

Vintage Year

KS PME Using Russell 2000 TR (X)

If PME index value (X) is >1, private equity has outperformed the public market


Venture Capital Deals* Completed Globally

Source: Preqin Online Products *Figures exclude add-ons, grants, mergers, secondary stock purchases and venture debt.

5,308 5,506 5,431

6,804

8,313

9,920

10,980

12,015

13,019

11,944

11,145

4550

3746

62 58 58

100

148143

182

0

20

40

60

80

100

120

140

160

180

200

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Agg

rega

te D

eal V

alue

($bn

)

No.

of D

eals

No. of Deals Aggregate Deal Value ($bn)


Number of Venture Capital Deals* by Region

Source: Preqin Private Equity Online. *Figures exclude add-ons, grants, mergers, secondary stock purchases and venture debt.

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

No.

of D

eals

North America Europe Greater China India Israel Other


Aggregate Value of Venture Capital Deals* by Region

Source: Preqin Private Equity Online. *Figures exclude add-ons, grants, mergers, secondary stock purchases and venture debt.

0

20

40

60

80

100

120

140

160

180

200

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

No.

of D

eals

North America Europe Greater China India Israel Other


Unlisted Natural Resources Dry Powder by Primary Strategy

Source: Preqin Natural Resources Online

1 2 3 2 3 3 5 6 9 8 10 87 9 6 8 7 8 5 9 11 11 11 10

40

63 73 70 7078

91

111123 135

163152

1

22 1 2

24

8

75

6

6

0

12 2 3

4

4

5

45

5

4

0

00 0 0

10

1

01

1

1

0

50

100

150

200

250

Water

Timberland

Metals & Mining

Energy

DiversifiedNatural ResourcesAgriculture/Farmland


Unlisted Natural Resources Funds in Market by Primary Geographic Focus

Source: Preqin Natural Resources Online. As of January 2018

112

54

17

58

67

27

9

22

0

20

40

60

80

100

120

North America Europe Asia Rest of World

No. of Funds Raising Aggregate Capital Targeted ($bn)


Natural Resources


0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Agriculture/Farmland

ConventionalEnergy

RenewableEnergy

Metals &Mining

Timberland Water

Sectors that Investors View as Presenting the Best Opportunities, 2016 vs. 2017

12/1/2016 12/1/2017


Natural Resources

Source: Preqin Investor Interviews, December 2017

3%

7%

5%

0%

8%

10%

7%

10%

49%

4%

6%

6%

7%

7%

9%

11%

11%

37%

0% 10% 20% 30% 40% 50% 60%

Equity Market Movements

US Domestic Policy

US Trade Policy

Unwinding of Central Bank Balance Sheets

Currency Market Movements

Low Interest Rates

Possibility of Interest Rate Rises

Geopolitical Landscape

Commodity Price Movements

Investor Views on the Macroeconomic Factors that Had the Biggest Impact on Their Natural Resources Portfolios in 2017 vs. Predictions for 2018

2018 2017


Hedging Inflation

Source: CAIA and Bloomberg. Data through February 28th 2018

(0.80)

(0.60)

(0.40)

(0.20)

0.00

0.20

0.40

0.60

1/1/

1994

7/1/

1994

1/1/

1995

7/1/

1995

1/1/

1996

7/1/

1996

1/1/

1997

7/1/

1997

1/1/

1998

7/1/

1998

1/1/

1999

7/1/

1999

1/1/

2000

7/1/

2000

1/1/

2001

7/1/

2001

1/1/

2002

7/1/

2002

1/1/

2003

7/1/

2003

1/1/

2004

7/1/

2004

1/1/

2005

7/1/

2005

1/1/

2006

7/1/

2006

1/1/

2007

7/1/

2007

1/1/

2008

7/1/

2008

1/1/

2009

7/1/

2009

1/1/

2010

7/1/

2010

1/1/

2011

7/1/

2011

1/1/

2012

7/1/

2012

1/1/

2013

7/1/

2013

1/1/

2014

7/1/

2014

1/1/

2015

7/1/

2015

1/1/

2016

7/1/

2016

1/1/

2017

7/1/

2017

1/1/

2018

36 Month Rolling Correlation to CPI

S&P 500 Bloomberg Commodity


Inflation Betas

Where can institutional investors turn to hedge their inflation risk? Studies have found that a few assets can hedge inflation risk

(positive inflation beta), while the majority of institutional assets have a risk to rising inflation (negative inflation beta)

Within equities, smaller cap stocks and less capital intensive sectors have even greater inflation risk

In practice, many institutions build a real assets allocation, investing 5% to 20% of the portfolio in timberland, farmland, linkers and commodity futures

“Deflating Inflation: Redefining the Inflation-Resistant Portfolio”, Bernstein Global Wealth Mgmt, 2010

20 Year US Treasuries

S&P 500 3 Month T‐bills

Farmland Commodity Futures

‐3.1 ‐2.4 0.3 1.7 6.5


Timing Commodity Investments

Average Returns by Stage of the Business Cycle, 1959-2004

Gorton/Rouwenhorst, “Facts and Fantasies about Commodity Futures”, Financial Analysts Journal, 2006

Stocks Commodities

Early Expansion 16.3% 6.8%

Late Expansion 10.4% 16.7%

Early Recession ‐18.6% 3.7%

Late Recession 19.7% ‐1.6%


Potential Demand: Rebalancing from Equities

Commodity prices have declined while equity markets have risen sharply


Potential Demand: Electric Cars

France and the UK have banned the sale of new gasoline and diesel vehicles after 2040

1 million electric vehicles sold in 2017, half in China, with estimates of 14 million vehicles per year by 2025

Growth in electric vehicles is bullish for natural gas, copper, lithium, and cobalt and bearish for gasoline and lead

Significant deficits of cobalt expected through 2020Source: Bloomberg, Reuters, and Benchmark Mineral Intelligence


Private Debt Assets under Management

Source: Preqin

227

411

0

100

200

300

400

500

600

700

Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Jun-17

Ass

ets U

nder

Man

agem

ent (

$bn)



Private Debt AUM by Fund Type (As of June 2017)

Source: Preqin

0

50

100

150

200

250

Direct Lending Distressed Debt Mezzanine Special Situations Venture Debt



Private Debt Funds in Market by Fund Type

Source: Preqin. As of January 2018

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

No. of Funds Raising Aggregate Capital Targeted

Venture Debt

Special Situations

Fund of Funds

Mezzanine

Distressed Debt

Direct Lending

Yield Breakdown by Fund Type

• Venture Debt: 20%

• Private Debt FoF: 10% – 12%

• Special Situation: 10.8%

• Mezzanine: 8.8%

• Distressed Debt: 7.3%

• Direct Lending: 7.5%


Private Debt Geographic Focus

Source: Preqin

178

82

31

44

88

42

11 8

0

20

40

60

80

100

120

140

160

180

200


Private Debt Funds in Market by Primary Geographic Focus (As of January 2018)

No. of Funds Raising Aggregate Capital Targeted ($bn)

62% 58% 57%

26%25% 24%

6%9% 11%

6% 8% 8%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jan-16 Jan-17 Jan-18

Make-up of Investors in Private Debt by Location



Dry Powder: Private Debt vs. Buyout

Source: Preqin

111 104 116 131 132

190 176215

196 196

476 477

423388

360

432 447473

535 530

0

100

200

300

400

500

600

Dec

-08

Dec

-09

Dec

-10

Dec

-11

Dec

-12

Dec

-13

Dec

-14

Dec

-15

Dec

-16

Ma

r-17

Dry

Pow

der

($bn

)

Private Debt Buyout

Growth of Dry Powder over the past 9 years:

• Private Debt has grown 77% • Buyout has grown 11%


Key Challenges Facing Unlisted Infrastructure Managers in 2018

Source: Preqin Fund Manager Survey, November 2017

19%

19%

20%

20%

20%

23%

33%

36%

59%

0% 10% 20% 30% 40% 50% 60% 70%

Fulfilling Investor Demand


Fundraising

Interest Rates

Performance

Fee Pressure

Deal Flow

Regulation

Valuations

Proportion of Respondents


Unlisted Infrastructure AUM


65 67 64 6886 75

110 106 109148 15034

51 62

94

125 146

165 190216

238268

0

50

100

150

200

250

300

350

400

450

12/31/2007 12/31/2008 12/31/2009 12/31/2010 12/31/2011 12/31/2012 12/31/2013 12/31/2014 12/31/2015 12/31/2016 6/1/2017

Ass

ets u

nder

Ma

nage

men

t ($b

n)



Investor Preference

Source: Preqin Investor Interviews, December 2017

13%18%

28%37%

44%46%

49%

0% 10% 20% 30% 40% 50% 60%

SocialWaste ManagementTelecommunications

UtilitiesTransport

Renewable EnergyEnergy (Excl. Renewables)


Sectors that Investors View as Presenting the Best Opportunities

9%12%

14%28%

36%36%

47%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

SecondariesDebt

Fund of FundsValue Added

Core-PlusOpportunistic

Core


Strategies that Investors View as Presenting the Best Opportunities


Open-Ended Infrastructure Fund Launches

Source: Preqin Infrastructure Online

0

10

20

30

40

50

60

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

No. of Funds Already in Market No. of Funds Launched No. of Funds Liquidated


Key Challenges Facing Private Real Estate Managers in 2018

Source: Preqin Fund Manager Survey, November 2017

10%

11%

15%

16%

19%

19%

24%

24%

33%

37%

62%

0% 10% 20% 30% 40% 50% 60% 70%

Fee Pressure

Fulfilling Investor Demands

Availability/Pricing of Debt Financing

Regulation

Fundraising

Exit Environment


Performance

Interest Rates

Deal Flow

Valuations



Performance: PrEQin Index by Asset Class

Source: Preqin Real Estate Online

0

50

100

150

200

250

12/1

/200

73/

1/20

086/

1/20

089/

1/20

0812

/1/2

008

3/1/

2009

6/1/

2009

9/1/

2009

12/1

/200

93/

1/20

106/

1/20

109/

1/20

1012

/1/2

010

3/1/

2011

6/1/

2011

9/1/

2011

12/1

/201

13/

1/20

126/

1/20

129/

1/20

1212

/1/2

012

3/1/

2013

6/1/

2013

9/1/

2013

12/1

/201

33/

1/20

146/

1/20

149/

1/20

1412

/1/2

014

3/1/

2015

6/1/

2015

9/1/

2015

12/1

/201

53/

1/20

166/

1/20

169/

1/20

1612

/1/2

016

3/1/

2017

6/1/

2017

Ind

ex R

etur

n (R

ebas

ed to

100

as o

f 31-

Dec

-200

7

PrEQIn Real Estate PrEQIn Private Equity PrEQIn Infrastructure PrEQIn Private Debt MSCI US REIT


0.6

0.7

0.8

0.9

1

1.1

1.2

1.3

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

PME

Va

lue

(X)

KS PME Using MSCI US REIT KS PME Using S&P 500 TR

Real Estate: Public Market Equivalent (PME)

Source: Preqin Real Estate Online, All Regions

If PME value (X) is >1, private real estate has outperformed the public market


US Average Cap Rate vs. US 10 Year Yield

Source: CAIA and Bloomberg. Data through December 2017

0

2

4

6

8

10

12

1/1/

2001

5/1/

2001

9/1/

2001

1/1/

2002

5/1/

2002

9/1/

2002

1/1/

2003

5/1/

2003

9/1/

2003

1/1/

2004

5/1/

2004

9/1/

2004

1/1/

2005

5/1/

2005

9/1/

2005

1/1/

2006

5/1/

2006

9/1/

2006

1/1/

2007

5/1/

2007

9/1/

2007

1/1/

2008

5/1/

2008

9/1/

2008

1/1/

2009

5/1/

2009

9/1/

2009

1/1/

2010

5/1/

2010

9/1/

2010

1/1/

2011

5/1/

2011

9/1/

2011

1/1/

2012

5/1/

2012

9/1/

2012

1/1/

2013

5/1/

2013

9/1/

2013

1/1/

2014

5/1/

2014

9/1/

2014

1/1/

2015

5/1/

2015

9/1/

2015

1/1/

2016

5/1/

2016

9/1/

2016

1/1/

2017

5/1/

2017

9/1/

2017

Yiel

d

Spread US Avg. Cap Rate US 10 Year Yield


Closed-End Private Real Estate AUM


20 36 38 38 5496 130 165 169 176 150 164 136

201 195 228 238 245

43 42 39 5868

92

144

243 229 216 297

395 456

504555

575 542565

0

100

200

300

400

500

600

700

800

900

Ass

ets u

nder

Ma

nage

men

t ($b

n)



Closed-End Private Real Estate Dry Powder by Strategy


0

20

40

60

80

100

120

12/1/2007 12/1/2008 12/1/2009 12/1/2010 12/1/2011 12/1/2012 12/1/2013 12/1/2014 12/1/2015 12/1/2016 12/1/2017

Debt Core Core-Plus Value Added Opportunistic Distressed

September 2018 Exam

The Global Benchmark In Alternative Investment Education

The CAIA Charter

Global Presence

Member Asset Class Focus and Regional Distribution

Data: Member Survey, May 2017

55%

13%

32% AmericasAsia-PacificEurope, Middle-East, Africa

CAIA Members work across a variety of asset classes globally.

Hedge Funds 65%

Fixed Income Alternatives 50%

Private Equity 45%

Real Estate 41%

Commodities 39%

Managed Futures 32%

Real Assets Infrastructure, Farmland, Timberland 30%

Structured Products 29%

Venture Capital 18%

0 18 35 53 70

Membership Growth

*2017 Data through May 2017

561

3,265

5,700

9,000

0

2,000

4,000

6,000

8,000

10,000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017*

Level I Curriculum – Third Edition

Core Concepts Professional Standards & Ethics Introduction to Alternative

Investments Real Assets Hedge Funds Private Equity Structured Products Risk & Portfolio Management

Level II Curriculum – Third Edition

Advanced Core Concepts Professional Standards & Ethics Venture Capital & Private Equity Hedge Funds & Managed Futures Real Estate/Real Assets Commodities Structured Products Manager Selection, Due Diligence &

Regulation Research Issues & Current Topics Risk & Risk Management Asset Allocation & Portfolio

Management

Current & Integrated Topics Available

Free at caia.org

Level I Topic Approximate Exam Weight

Professional Standards and Ethics 15% – 20%

Introduction to Alternative Investments 20% – 25%

Real Assets including Commodities 10% – 20%

Hedge Funds 10% – 20%

Private Equity 5% – 10%

Structured Products 10% – 15%

Risk Management and Portfolio Management 5% – 10%

Level I Exam Topics

Level II Topic Approximate Exam Weight

Multiple Choice Constructed Response

Professional Standards and Ethics 0% 10%

Current and Integrated Topics 0% 10%

Asset Allocation and Institutional Investors 8-12% 0-10%

Private Equity 11-15% 0-10%

Real Assets 13-17% 0-10%

Commodities 5-7% 0-10%

Hedge Funds and Managed Futures 18-22% 0-10%

Structured Products 5-7% 0-10%

Level II Exam Topics

Examination Format and Scheduling

Level I

Section 1: 100 questions / 120 minutesSection 2: 100 questions / 120 minutes

Both CAIA exams are administered internationally in computerized format exclusively at proctored Pearson VUE

test centers.

Level II

Section 1: 100 questions / 120 minutesSection 2: 3 essays / 120 minutes

Once you have purchased your Level I or Level II exam, you will receive a

confirmation email with a link that will allow you to schedule your exam

appointment.

Study guides outlining keywords and learning objectives Workbooks with sample exercises Candidate orientation sessions Study calculator to plan your course of study Third party preparatory course and programs Level I & Level II sample exams

Candidate Support & Tools

Visit CAIA.org/preparing

Fees (in USD) Level I Level II Annual Membership (in USD)

Program Enrollment $400 Full $350

Exam Registration $1,250 $1,250 Affiliate $175

TOTAL $1,650 $1,250 Retired $175

Emerging Market* $100

Early Registration Discount -$100 -$100 2-Year Full $650

Retake Fee $450 $450

Curriculum cost (in USD) Level I Level II

Textbook & readings $125 $125

Standards of Practice handbook $0 $0 *Based on MSCI Emerging Market Indices

Fees

67% 66% 66%

59%61%

63%60%

66%68% 67%

70%

66%

59%57%

50%

70%

90%

Level ILevel II

Pass Rates

CAIA Charter

Academic Partnerships - Americas

A complete list of CAIA’s academic partners globally can be found at caia.org.

Academic Partnerships - EMEA

Academic Partnerships - APAC

A complete list of CAIA’s academic partners globally can be found at caia.org.

Association Partnerships

Banks Consultants Fund Managers Regulators Pension Funds & Endowments

HSBC

Citi

Credit Suisse

UBS

Barclays Capital

Deutsche Bank

CambridgeAssociates

New England Pension Consultants

Mercer

Willis Towers Watson

Blackrock

Goldman Sachs

J.P. Morgan

Morgan Stanley

State Street

U.S. SEC

MAS Singapore

SFC Hong Kong

FCA UK

CIMA Cayman

APG

Teacher RetirementSystem of Texas

Chicago Teachers

Ontario TeachersCalPERS

Harvard Management Co.

Sample Employers

Top companies seek to hire CAIA Charterholders.Sample job postings from the CAIA Career Center

International Relationship Manager. CFA, CAIA or working toward preferred.

Equity Investment Research -Manager. CIMA, CAIA, and/or CFA charter holders or candidates will be looked favorably upon.

International Trading ManagerMBA, CFA, CAIA or CMT preferred

CAIA is Preferred

Senior Quantitative Research Analyst. CFA, CAIA, CIMA

Senior Credit SpecialistCFA / CAIA / FRM / PRM is considered highly advantageous.

Risk Management - AssociateIndustry certifications, such as a CFA, CAIA, or FRM, are a plus.

Why maintain an active CAIA membership? Top 5 reasons from Members:

2

1

3

4

5

Data: Member Survey, May, 2017

To use the CAIA designation.

To position myself for future career opportunitiesand access the CAIA Career Center.

To maintain my knowledge of alternatives and stay current in the industry through CAIA publications and research.

To access CAIA benefits through Member News and volunteer opportunities.

To take advantage of CAIA Chapters’ educational and social events.

Career Value of the CAIA Charter

Use of CAIA marks in professional documents Chapter educational and networking events Global network of more than 9,000 Members Globally-recognized designation Education and Research at CAIA.org Self-evaluation Tool Ongoing Education CAIA Career Center

Member Benefits

EarlyRegistration

Apr 2 – May 14, 2018

RegularRegistration

May 15 – Aug 6, 2018

Level I ExamSept 3 – 14, 2018

Level II ExamSept 17 – 28, 2018

APR MAY JUNE JULY AUG SEPT

Exams September 2018 – Notable Dates

AMERICAS

Millissa Allen, CAIAAmherstManaging Director of Business Developmentdirect: +1 413 549 [email protected]

Cody DurantAmherstBusiness Development Manager direct: +1 413 549 3313 [email protected]

EUROPE, MIDDLE-EAST, AFRICA

Laura Merlini, CAIAGenevaManaging Director of Business Developmentdirect: +41 796 154 [email protected]

Tammy JohnstonLondonGlobal Business Development [email protected]

ASIA-PACIFIC

Joanne MurphyHong KongManaging Director, APACdirect: +852 3752 [email protected]

Wendy LeungHong KongAssistant Director, APACdirect: +852 3752 [email protected]

Peter Douglas, CAIASingaporePrincipaldirect: +65 6536 4241 [email protected]

Global Business Development Contacts

www.caia.org

The Global Benchmark In Alternative Investment Education

The CAIA Charter

ALTERNATIVE INVESTMENTS SUMMITMAY 7TH 2018

Speaker: Keith Black, PhD, CFA, CAIA (Managing Director, CAIA)

Panel:Dan Schwartz, CFA (Vice President, AQR)Eileen Duff (Managing Partner, iCapital)David Hemming (Senior PM, PowerShares by Invesco)

ALTERNATIVE INVESTMENTS SUMMIT MAY 7TH 2018 · State of Alternative Investment – 7 About CAIA...

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