I was recently contacted by Richard Wilson, the guy behind The Hedge Fund Blogger, to post an interview about the CHA, a online designation for hedge funds. Since we have been hearing a lot of things about hedge funds recently in the news, I thought it would be interesting to know more about the CHA.
1. Tell us a little about the CHA: What is it? How did it get started? What’s your affiliation with it?
The CHA Designation is an online certification program on the topic of hedge funds. It got started through a combination of factors which included our team’s realization that every other designation out there was built for analysts or risk managers and at the same time our team had received over 1,000 emails asking us about how one could learn more about hedge funds or earn a degree relevant to hedge funds. We connected all of the dots and launched the program in June of 2008 with an advisory board of 10 professionals and a team of 3. Today we have a team of 6 professionals and an advisory board of over 60 hedge fund and fund of hedge fund professionals. I founded the Hedge Fund Group (HFG), a 17,000 person networking association which sponsors the CHA Designation program.
2. What’s the one reason people should apply for the CHA designation?
Efficiency would be the one common reason. Whether you are starting a hedge fund, completing due diligence on hedge funds for a wealth manager, marketing a fund of hedge fund or hoping to eventually work for a hedge fund you will be more effective you are up to speed on industry terminology, trends, norms, history and popular hedge fund investment strategies. This specialized knowledge can be gained through our program and help professionals of all types which
3. Why should people choose the CHA over (or in addition to) the CFA or CAIA?
The CFA and CAIA are great programs but they are by their nature focused on minting new analysts and providing specific training on conducting types of analysis. The CHA Designation program is more conceptual and well rounded and built for traders, analysts, portfolio managers, accountants, lawyers, marketers and others who work with hedge funds such as wealth management professionals.
4. (Also) What are the main differences between the CHA and those other designations? How does the degree of difficulty for obtaining a CHA compare to those others in terms of rigor and thoroughness?
The main difference between the CHA and the other designations, besides the non-analyst centric foundation is that the program is offered 100% online. The registration, studying and exam is complete over the internet, there are no testing centers or specific geographical requirements to completing the program. The CHA Designation is more thorough in covering the hedge fund industry as a whole but less thorough in covering the specific analystics involved in the analysis of securities, real estate or commodities.
5. I see there are currently 2 levels of certification. Are there plans for a third? And along those lines, do you expect the program to evolve along with the hedge fund industry and how so?
Level 1 provides a foundation of hedge fund knowledge while Level 2 allows professionals to choose a specific area of specialization within the program. There are no plans for a third level to the designation. We initially attempted to keep the designation to one level to keep the program simple but found two levels were needed to really customize the program for each participant. We do expect the program to evolve along with the hedge fund industry. Between our team and board of advisors consisting of 60 industry professionasl we are constantly keepin a pulse on industry changes and long-term trends which will affect the entrire industry in the next few years.
6. Do you think credibility or prestige will be an issue being a new designation?
I don’t believe it will be an issue but I do believe it is an issue right now. While media outlets such as the Financial Times, Alpha Magazine and Institutional Investor have covered us a few times many hedge fund managers and professionals are still learning about who we are and what we are trying to do. Some businesses and certification programs come and go so it will takes 2-3 years to gain the trust and credibility that we will need to take our program from 300-400 participants a year which we are at now to 1,000+ participants a year. We are open to media interviews, input from hedge fund managers and we constantly seek feedback from participants to help us continually improve the program itself and our image within the industry.
7. Who do anticipate the most applicants to be? Hedge Fund analysts or whom?
Most participants work within the hedge fund industry or work with hedge fund professionals from time to time. Specifically the most popular groups have included hedge fund managers, due diligence professionals, wealth management experts, graduate students and consultants/service providers.
8. How many applicants are you expecting each year and how many do you think will pass?
In 2009 we predict having 400 total participants and we believe that roughly 250-300 of these will pass the exam to hold the Level 1 charter. A 70-75% pass rate is what we expect for 2009. We believe in making the exam very challenging but failing 50% of those who take the exam as some designations do sounded extreme to our team, especially when participants are forced to pay full registration fees for each exam they sit for.
9. Do you think its a bad time to launch such a designation given the consolidation and somewhat chaotic nature of the industry right now?
We believe it is needed more than ever. There has never been a more competitive time to be seeking new hedge fund clients, partners or jobs. We believe the CHA Designation can act as a tool for those professionals who need to break new grounds in one of these three areas. I’m sure if we had started the designation several years ago we would be of a much larger size by now but we are fortune to have the team and advisory board we have now and we are here to stay. Our program is well capitalized and there is no risk of discontinuation in the forseeable future.
10. The designation seems aimed at those already in the industry, but what about those trying to break into the industry? Will it be beneficial to them or are they even allowed to take it?
The CHA Designation program was initially aimed at those who were not yet in the industry or those who were in their first 2 years of entering the hedge fund world. What we found however was that many highly experienced professionals were enrolling for our program because of its well rounded learning objectives and focus on hedge fund strategies and due diligence. For example one trader who started a hedge fund in 2006 just enrolled into our CHA Level 1 program because while he is an expert at trading and runs his own hedge fund he wanted to learn more about fund of hedge funds and how to evaluate hedge fund performance.
Around 80% Of the professionals who complete the program already work within the industry.
11. The CHA offers networking and mentoring opportunities, which can be a great resource. Was it one of the goals to also build a community around the designation? Also, what are some of the other benefits?
The community really came first and helped seed the idea of starting the CHA Designation. The Hedge Fund Group (HFG) is the 17,000 person networking association which launched the CHA Designation. This group has members from every major city around the world, with over 4,000 hedge funds being represented by participants who have joined the group. The HFG holds networking events several times a year within the US and will soon begin offering these outside of the US as well.
12. There have been many different charters created over the years… Why will yours succeed and what gives it staying power?
The staying power of our certification program is partnered with the staying powers of the hedge fund industry itself. Our program is well rounded and applicable to almost any professional who works with hedge funds. At the same time hedge funds may invest an almost anything and while struggling now as an industry their diversity and sheer force in numbers should allow them to be first in line once the market turns again. Regardless of additional regulations I believe hedge funds, globally will come back to full strength over the next 3 years and our program hopes to grow with them over this same time period.
Thank you Richard for giving us more information about the CHA!
Disclaimer: this interview was sponsored by The Hedge Fund Blogger.
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