Lecture Notes: Alternative Investments and Kaya Qualification

Introduction

• Lecturer: Joe
• Greeting and acknowledgment of audience
• Focus on statistics, data, and the Kaya Association qualification

Global Asset Growth

• Exponential growth in asset management (traditional and alternative)
• PWC forecast: 5.5% growth to $145 trillion by 2025
• Significant past growth since 2012
• Asia Pacific growth: $16-17 trillion to $30 trillion by 2020
• Driven by demand from wealth management groups globally
• Revenue growth for businesses providing financial products and services
• Projection: Liquid asset growth by 2030

Public vs. Private Markets

• Public markets favorable since the global financial crisis
• Increasing interest in private markets
• Example companies: Uber, Facebook, Google (pre-IPO funding)
• Private market value surpasses public market value
• Trend: Companies staying private longer
• Investors recognizing diversification benefits
• Bull market run for over a decade
• Role of alternative investments: Enhanced performance, inflation hedges, yield enhancements

Alternative Investments Growth

• Alternative investments growth: projected $22 trillion by 2025
• Sectors benefiting: Infrastructure and private equity
• Asia Pacific infrastructure growth
• Significant opportunities by 2026
• GP space: Product development to capture growth

Investor and Market Disruption

• Investor disruption in private and public markets
• Trends: consolidation, collaboration, democratization, tokenization
• Increased access to private markets
• Growing importance of ESG (environmental, social, governance) investing
• Millennial and Generation Alpha investors focused on outcomes
• Opportunities in alternative investments

Kaya Association and Qualification

• Mission: Create values and principles, leadership, and advocacy in alternative investments
• 13,000+ members globally from over 100 countries
• 33 chapters, 8 in Asia (largest in Hong Kong)
• 20th year anniversary
• Collaboration with academics and associations
• Resources: Research, events, publications
• Portfolio for the Future: Reassessment of 60/40 portfolio
• Renewed Professionalism publication

Kaya Examination Overview

• Two-level exam: Level 1 and Level 2
• Level 1: Professional Standards, ethics, introduction to alternative investments
  • Real assets, private securities, hedge funds, structured products
  • Multiple-choice exam format
• Level 2: Emerging topics, institutional asset owner themes, due diligence
  • Application of competence, half multiple choice, half constructive responses
• Regular content updates
• 2023 Curriculum: Refreshed content, global contributors
• Bundled digital learning platform
• Study resources available online

Exam and Membership Costs

• Level 1: Enrollment fee $400, exam registration $995 (early registration)
• Late registration fee: $1395
• Membership annual fees: $350 (Hong Kong-specific)
• Stackable credential program for CFA members: Skip Level 1

Kaplan's Role and Support

• Kaplan's partnership with Kaya for preparatory courses
• Kaplan's long-standing relationship with Kaya
• Lecture and course offerings: Classroom and on-demand classes
• Support for diverse candidate backgrounds
• Emphasis on efficiency and expedited study

Quantitative Concepts in Kaya Curriculum

• Importance of risk measurement (Value at Risk - VAR)
• Concepts: Expected returns, standard deviations, confidence levels
• Example calculations and practical applications
• Understanding derivatives and options
  • Long/short calls and puts, payoff diagrams
  • Option strategies for different market views and objectives
• Classroom discussions and problem-solving