My firm is a placement agent for managers in the alternative asset arena. What do you consider the value of a CAIA certification for a sales and marketing professional?
What's the value of a CAIA certificate?
For those not familiar with the CAIA designation, it stands for Chartered Alternative Investment Analyst, which is earned after reading the course books and passing two exams, Level I and Level II, through a self-study program. Unlike the CFA, the CAIA exams are given twice each year, so it is possible to earn this designation in one year by passing the two tests. Topics in Level II include due diligence, portfolio management, risk management and portfolio monitoring. Ethics and professional codes of conduct are covered in both levels. The coursework covers a myriad of asset classes considered alternative investments including real estate, hedge funds, commodities and managed futures, private equity and credit derivatives.
Currently, I believe that the highest value of this designation has more to do with the curriculum and the knowledge one could obtain from reading the material and taking the tests, rather than believing one will be viewed significantly differently by the placement agent's clients who are likely the investment managers of these alternative products. Truthfully, I think it will take some time before the overall investment industry puts a premium on those with the CAIA designation. However, this reality doesn't take anything away from those that study hard and earn the CAIA credential, because it provides meaningful information about alternative investments, which is a fast growing asset class.
The other reality is that third-party marketers (aka placement agents) are generally selected for three major reasons enumerated below which to date have not taken into account any special designations, be they CFA, Ph.D, MBA, JD, or CAIA:
1. Classic Marketing Skills
- Provide critical advice and counsel about the quality and effectiveness of sales material and all “marketing communications” and assist in their development;
- Identify the appropriate target markets and channels within those markets;
- Provide sales training for non-sales professionals; and
- Product positioning for competitive advantage.
2. Historical Relationships with the asset owners and their consultants
- Successful placement agents know how to qualify leads effectively and efficiently;
- Meaningful meetings are set up with key decision makers; and
3. Proven track record in raising capital for alternative investment products
As with most industry credentials, like the CIMA for consultants and CFA for investment professionals, they do signify that the individual has used their discretionary time and effort to gain a level of knowledge that might not have been obtainable through time and field experience. For that reason alone, having a CAIA designation is accretive. For those in sales and marketing, I just think it will take some time for the industry to make a meaningful distinction between those who have it and those who don't.