CIPM vs CAIA

Difference Between CIPM and CAIA

Certificate in Investment Performance Measurement is the full form for CIPM and with this degree, an aspirant can secure job roles in investment banks, plan sponsors, GIPS verification forms, etc whereas CAIA stands for Chartered Alternative Investment Analyst Association and with this degree, an aspirant can secure career as an analyst at private equity funds or hedge funds.

Choosing between two careers – CIPM and CAIA is a simple as well as a difficult job. It depends on whether you are clear on what you want to do in Finance.

We have brought you details of the CIPM and CAIA certifications to help you decide between them. It is our little effort to simplify decision making.

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What is the CIPM?

This course is just the right course for a candidate who would like to pursue and succeed in the field of investment performance as an analyst.  CIPM course includes performance measurements and attributes of an investment. It can be investment banking, investment analysis, investment management, investment advisory, etc.

Certificate of Investment Performance Management (CIPM) is offered to be appeared by the Association of CIPM, which is a part or is associated with the CFA Institute. And hence CIPM is an international professional course. Let us give you a background for this course.

  • Not knowing the continuous change in the investment industry, there had been specific regulations, laws, and market trends that decided the measurement and the advertising trends of financial products. However, the previous advertisement trends are now not used and encouraged for advertising these products anymore, especially by the US Securities and Exchange Commission.
  • Now the global investment management industry has set a particular set of standards that cover calculations of returns and advertising standards to adhere to it. It has achieved continuous growth worldwide. These standards are called the Global Investment Performance Standards that are GIPS.
  • Now that GIPS is an international body, it has made clear that this industry will hire only proper professionals. This entire scenario led to CFA form the CIPM association.
  • This certificate gives you proficiency in the fields of investment performance of the investment firms globally.

What is CAIA?

This course is designed to train a candidate in alternative investments. What are alternative investments as per your knowledge? Ok, let us explain. It is nothing but asset class except for common equity and fixed income products. Alternate investments deal in hedge funds, private equity, real assets, and commodities, etc., etc. etc.…

CIPM vs. CAIA Infographics

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Let’s understand the difference between CIPM vs. CAIA certifications.

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CIPM vs. CAIA Comparative Table

SectionCIPMCAIA
Organizing BodyThe organizing body for the CIPM exams is the CFA Institute, USA.The organizing body for the CAIA exams is the Chartered Alternative Investment Analyst (CAIA) Association, USA.
PatternThe course has 2 sequential levels – Level I and Level II, which replaced Principles level and Expert level respectively. The CFA charterholders enjoy exemption from the CIPM Level I exam.The course 2 sequential levels – Level I and Level II.
Duration of CourseMost candidates are able to complete the CIPM course in a span of 18 months.The candidates take 12 to 18 months to complete the CAIA course.
SyllabusThe syllabus primarily focuses on the following topics

 

  • Ethics & Professionalism
  • Performance Attribution
  • Performance Measurement
  • Performance Presentation
  • Performance Appraisal
  • Manager Selection
  • Global Investment Performance Standards
The syllabus primarily focuses on the following topics

 

  • Professional Standards & Ethics
  • Private Equity, Hedge Funds, Real Assets & Structured Products
  • Alternative Investments
  • Volatility & Complex Strategies
  • Institutional Asset Owners & Investment Policies  Due Diligence & Selecting Strategies
Exam FeesThe total cost of the course falls in the range of $950 to $1,350, which is basically the exam fees. The exam fees vary based on the time of registration.The total cost of the course falls in the range of $2,700 to $2,900. It includes enrollment fee and the exam fees, which varies based on the time of registration. There are exam fee exemptions for AIMA company members and professional associations.
JobsSome of the common profiles include

 

  • Risk Analyst
  • Compliance Officer
  • Investment Consultant
  • Portfolio Manager
  • Investment Analyst
  • Financial Adviser
Some of the common profiles include

 

  • Hedge Fund Analyst
  • Investment Consultant
  • Portfolio Manager
  • Private Equity Analyst

 

DifficultyThe CIPM exams are very difficult and only ~25% of the aspiring candidates clear both levels. In September 2019, the pass rates were

 

The CAIA exams are tough and only ~30% of the aspiring candidates clear both levels. In September 2020, the pass rates were

 

  • Level I: 52%
  • Level II: 65% [Source: Wikipedia]
Exam DateThe schedule for the upcoming exams for the year 2021 for Level I and Level II is as follows

 

  • Level I: Mar 16-31 & Sep 16-30
  • Level II: Mar 16-31 & Sep 16-30
The schedule for the upcoming exams for the year 2021 for Level I and Level II is as follows

 

  • Level I: Feb 22–Mar 05 & Aug 30–Sep 10
  • Level II: Mar 08-19 & Sep 13-24

Exam Requirements

CIPM

Professional certifications have certain requirements to appear and clear them. CIPM examination requirements are given below.

  1. Two or more years of experience in calculations, analyses, showing investment results, different evaluation investments, giving services such as consultation, legal and regulatory, technical and accounting directly supporting investments, GIPS standard compliance verification experience, monitoring people practicing investment activities directly or indirectly, or even teaching investments.
  2. Or you need a four-year experience in the investment industry that mainly consist of activities such as application or evaluation of financial, economic, and statistical data as one of the most important parts of investment, marketing services of investment management, keeping a close watch on investment firms that comply with the standards, regulations, and laws of the industry, recommending investment managers after evaluating them.

CAIA

There are no mandatory requirements to take up this alternative investment examination. However, if you want to make sure you are heading in the right direction, you must have the following:-

  1. Understanding of the basics of finance and qualitative analysis.
  2. If you are interested in developing expertise in alternative investments as a risk manager, analyst, portfolio managersPortfolio ManagersA Portfolio Manager is an executive responsible for making investment decisions & handle investment portfolios for fulfilling the client’s investment-related objectives. Also, he/she works towards maximizing the benefits & minimizing the potential risks for clients. read more, traders, consultants, advisors, etc.
  3. A genuine interest in learning the subject.

Why Pursue CIPM?

You will pick up a course if it is advantageous. If you are a professional in the related fields and you want to get on to a higher designation or if you are a student and you want to make sure that you start big, this course can help you achieve success in every stage of your career. This course will add value to your work and your life in the following ways.

  1. In a designation like a risk manager or an analyst, you have to deliver results of high returns by minimizing risk. And this course will help you develop an insight that will help you provide more actionable results.
  2. To add to your recruitment quality, the content of this course will help you analyze the right candidate for risk management, improve your contacts, which will help you search and select the right manager.
  3. Studying, evaluating, and producing reports will be one of your most essential tasks. These reports need to be transparent as per the laws of the regulators. CIPM gives you the ability to help you produce comprehensive and transparent information.
  4. Risk is a definite factor in this job. However, the risk needs to be calculative, measured, and minimum. You will be able to create awareness of the increased risk in this profile.
  5. If you have the ability, your feedbacks and viewpoints will be essential to people who know your knowledge level, which includes your firm, your clients, etc. you will now be able to provide feedback to maximize money for people and firms.

Why Pursue CAIA?

To start with, the members of CAIA look at and consider different standards for alternative investments industry and professions. They do enjoy some benefits that are associated with this designation.

. You can consider working for many domains on different designations within alternative investments. The choice you have is multiple. It includes Hedge Funds, Private Equity Funds, Investment Banking, and, obviously, Commodity Desk.

  • With the membership as a CAIA, you get access to many related events and conferences globally to share investment and improvement ideas.
  • These conferences give you the opportunity of growing in terms of knowledge of alternative investments. At these conferences, you get to socialize with similar background professionals, which provides you with contacts to maintain.
  • The association makes sure you get on to the higher and very professional designation of your interest along with perks associated with the membership.
  • Most importantly, this program is valued and trusted by top employers across the globe. As it helps the candidates achieve very high standards in alternative investments.
  • This helps you build a global community along with giving you international recognition. You get an opportunity of pursuing and updating your knowledge of alternative investments all your life.
  • A course with the help of just two levels can help you change the face of your career; however, this course is not going to be rocket science for you if the alternative investment is the passion for you.

Conclusion

For specific courses, you need passion, passion for knowing the market, the industry, and the off-course must have a passion for making money sweat. If you are interested in investment performance measurements and the data related to it, we would suggest CIPM as a career option for you.

An alternative investment is a different ball game altogether. It is much different for the rest of the market. If you love private equities, hedge funds, commodity desks, and not the real stick market, then this is the place to be my friend.

However, do not forget that it includes many studies as suggested; the recommended study time is more than 200hrs. If you are prepared to give in so much time and effort, you must take CAIA as your career.

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Comments

  1. Jaylen Bookman says

    Good source of knowledge. This is blog is really helpful to decide which one is best for you to choose as your profession. I really liked it. I would also like to receive any kind of study material related to FRM Study.

    • Dheeraj Vaidya says

      Thanks and I am glad that you think this was helpful. Well Financial Risk Manager (FRM) is offered by Global Association of Risk Professionals (GARP). You can read more about FRM exam here.

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