CAIA Level II case studies
CAIA Level II · Put your knowledge to work in context.
CAIA Level II is the second and final examination in the Chartered Alternative Investment Analyst program, the professional credential for people who allocate capital to, or manage money within, alternative asset classes. It is generally taken after Level I and is aimed at candidates who already command the vocabulary of alternatives and now need to apply it: structuring, due diligence, risk budgeting, valuation, and portfolio-level decisions rather than pure definitions. The CAIA Level II case studies are 5 cases and about 3,970 words.
1The Denominator Breach: Rebalancing an Illiquid Policy Portfolio
Ridgeline University's 2.4 billion endowment targets private equity at 20% with a 15-25% policy band. After a 22% fall in public equities, PE's reported weight is 26.4% on lagged NAVs, though the investment office believes marks are 5-8% rich.
757 words, about 4 min2The Continuation Fund Roll: An LPAC Member's Judgement Call
You sit on the LP advisory committee of Arbor Capital Partners Fund IV (2016 vintage, 800m). Your institution committed 50m; current NAV is 78m and DPI is 0.55x.
804 words, about 4 min3Capacity, Drift and a Key Person at a Trend Follower
A 600m foundation has 8% allocated to Kestrel Systematic, a managed futures manager with 2.1bn AUM and a four-year record: +18% in 2022, -2% in 2023, +1% in 2024, +14% year-to-date. The IPS permits 'diversifying, liquid, daily-NAV strategies' and caps any single manager at 10% of the foundation.
825 words, about 4 min4CLO Equity: Underwriting the Arbitrage
A corporate pension is offered a 40m allocation to the equity tranche of a new 500m broadly syndicated loan CLO run by a first-time CLO manager. The proposed stack: 310m Class A at SOFR+120bp, 60m Class B at +180bp, 30m Class C at +250bp, 20m Class D at +400bp, and 80m of equity.
777 words, about 4 min5The Four-Week Window: Allocation, Conflicts and Red Flags
You run alternatives due diligence at a wealth manager whose platform is 30% funded by one family office client. A private credit fund offers a 150m capacity allocation with a four-week subscription window; the GP says allocations are first-come.
807 words, about 4 min