Anson, CAIA Level I: An Introduction to Core Topics in Alternative Investments

The Chartered Alternative Investment Analyst Association offers the CAIA Charter, designed for individuals specializing in institutional quality alternative investments. Attaining the charter requires a candidate to pass both Level I and Level II exams. This second edition of An Introduction to Core Topics in Alternative Investments by Mark J. P. Anson with Donald R. Chambers, Keith H. Black, and Hossein Kazemi (Wiley, 2012) was written primarily for those studying for their Level I exam. (The text geared to the Level II exam is Advanced Core Topics in Alternative Investments.)

For most folks, preparing for the Level I exam would definitely not be a weekend project. For starters, the text is almost 900 pages long. It is divided into seven parts: introduction to alternative investments, real assets, hedge funds, commodities, private equity, structured products, and risk management and portfolio management. Lest you think that the book is merely an overview of the field, the first part of the book takes up such topics as statistical foundations; risk, return, and benchmarking; correlation, alternative returns, and performance measurement; alpha and beta; and hypothesis testing in alternative investments.

Although I have no intention of becoming chartered in anything, I’m delighted with this book. It is a first-rate reference, bringing together in one well-structured, clear text a broad range of material that it’s probably taken me close to fifty books to cover, more or less. Although some of the material is intrinsically complicated, the authors have done a yeoman’s job of making it seem almost simple.

All in all, CAIA Level I is a solid achievement and should be a core holding in the libraries of serious investors.