2015 Fall APEx Weekend - Program Book

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Table of ContentsWelcomeSponsor AcknowledgementAgendaSpeakers & FacilitatorsToigo Staff2015-2016 CalendarSchool CaptainsResources

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Welcome from Nancy Sims | President & CEO

Dear Toigo Fellows:

We welcome members of the classes of 2016 and 2017 to Toigo’s 2015 Fall APEX program. By hosting this event at the start of the academic year, we seek to provide you with four important anchors to your Toigo fellowship experience :

1. The opportunity to connect with Toigos on a national basis – all 102 of you!2. A focused setting for learning and peer exchange3. The chance to meet and hear the brilliance of Toigo Alumni as they share thoughts on a

variety of subject matter. 4. Connect you to members of the Toigo team who will serve as your support system for the next two

years and beyond!

We are very pleased to host this event in Washington, DC and to be greeted by an esteemed group of industry partners, members of our Board and Alumni. We appreciate the efforts of DC Alumni to host Saturday night’s social event.

The beauty of this program each year is that it takes on the personality of the two classes it hosts, so we expect this event to be another vibrant gathering of future leaders representing 17 schools nationwide – all drawn together by the Toigo brand. The program will be rich in content, energizing in drawing you closer to your Toigo affiliation, and insightful as information is provided and questions are answered to help shape your job search or career strategies.

Enjoy the weekend program knowing that you have a strong family of smart professionals who share in your journey through school and those who will welcome you once you graduate to the Toigo Alumni Association. It’s a trusted family for life!

Best,

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Thank You!

The Toigo Foundation gratefully acknowledges the support of the following individuals and firms whose generosity makes 2015 Fall APEx possible.

Earvin “Magic” Johnson

The Toigo Foundation gratefully acknowledges the generosity of Earvin “Magic” Johnson for a grant to support Toigo’s APEx curriculum.

Time EVENT/SESSION

10:00AM – 3:30PM

Career Advising Sessions*

Angel Stewart | Director of Talent Management, Toigo Foundation*By Appointment Only

12:00PM – 3:30PM

Fellow Arrival & Check-InHyatt Regency Washington on Capitol Hill

400 New Jersey Ave NW | Washington D.C. 20001Hotel check in time is 3:00PM

3:30PM – 4:00PMRegistration

Hyatt Regency Lobby

4:00PMDepart Hotel

Fellows board buses beginning at 3:30PM

5:00PM– 7:30PM International Finance Corporation (IFC) Reception

2121 Pennsylvania Ave | Washington DC, 20433Government-issued photo ID required for entry

7:30PM Depart IFC

8:00PM – 10:00PMNetworking Dinner & Program

Hyatt Regency Washington on Capitol Hill | Columbia B

FRIDAY, SEPTEMBER 11th

SATURDAY, SEPTEMBER 12th

Time EVENT/SESSION

7:00AM – 7:30AM

Late RegistrationOutside Columbia B

7:30AM – 9:10AM

Breakfast ProgramColumbia B

David Marchick | Managing Director, The Carlyle Group, Chairman, Toigo Board of Directors Michael Steed | Founder & Managing Director, Paladin Capital

2015 Fall APEx Agenda

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Time EVENT/SESSION

9:10AM – 9:25AM Break

9:25AM – 10:55 AM

Class of 2017: Interviewing SkillsWorkshop (Summer Internship)

Columbia Foyer

Angel Stewart | Director of Talent Management, Toigo Foundation

Sponsor participant: Lori Feldman | Executive Recruiter, Global Talent Acquisition, Met Life

Class of 2016: Managing your Entry Workshop (Full Time Search)

Columbia A

Karen Solorow | President, Coaching for Success, LLC

10:55AM - 11:10AM Break

11:10AM - 12:40PM

Class of 2017: Managing Your EntryWorkshop (Summer Internship)

Columbia A

Karen Solorow | President, Coaching for Success, LLC

Class of 2016: Interviewing SkillsWorkshop (Full Time Search)

Columbia Foyer

Angel Stewart | Director of Talent Management, Toigo Foundation

Sponsor participant: Lori Feldman | Executive Recruiter, Global Talent Acquisition, Met Life

12:40PM - 1:00PM Break

1:00PM - 2:30PM

Luncheon Program: Ask the ExpertColumbia B

Ashton Newhall | Managing General Partner, Greenspring Associates Introduction, Nancy Sims | President & CEO, Toigo Foundation

2:30PM - 2:45PM Break

SATURDAY, SEPTEMBER 12th (Continued)


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Time EVENT/SESSION

2:45PM - 3:45PM Toigo Takes the Stage: EntrepreneurshipColumbia A

Featuring the perspectives of Toigo Alumni Entrepreneurs

3:45PM - 4:00PMBreak

4:00PM - 5:30PMAsset Management Perspectives

Columbia BModerator: Natalie Eckford | Managing Director, Cambridge Associates (Harvard ‘06)

Panelists across the asset management discipline share their market insights


5:45PM - 6:45PM#WorkLifeMatters - Women Achieving

Success Through it AllColumbia Foyer

Breakout for Women - Group discussion with Toigo Alumnae

#WorkLifeMatters - A Gentleman’s PerspectiveColumbia A

Breakout for Men - Group discussion with Toigo Alumni


7:00PM - 9:00PMFellow & Alumni Dinner Program

Columbia B

“LIfe as Toigo” Panel discussion led by Toigo Alumni

9:00PM - 9:30PMTransition to evening outing

9:30PM - 11:30PMToigo Alumni Social

201 Bar 201 Massachusetts Ave NE | Washington, DC 20002

Venue is walking distance from hotel

SATURDAY, SEPTEMBER 12th (Continued)


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Time EVENT/SESSION

9:00AM - 10:00AM BreakfastCapitol Room

10:00AM – 12:00PMTechnical Skills Workshop:

Valuation FundamentalsColumbia Foyer

Pillars of Wall Street

Technical Skills Workshop: LBOs - Beyond the Spreadsheet

Understanding the Big Picture to Make the CaseCapitol Room

Pillars of Wall Street

12:00PMProgram Concludes

9:30 AM - 3:00 PMCareer Advising Sessions*

Angel Stewart | Director of Talent Management, Toigo Foundation*By Appointment Only

SUNDAY, SEPTEMBER 13th


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Natalie EckfordManaging Director | Cambridge AssociatesToigo , Harvard 2006

York Eggleston, IVCEO | Semantic Labs, LLCToigo , Harvard 1996

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Juan AgudeloAssociate | Prudential Real EstateToigo, Columbia 2015

Gina Baker ChambersVice President | Artemis Real Estate PartnersToigo , Columbia 2009

Yumna CheemaAssociate | CitiToigo , Columbia 2015

Speakers & Facilitators

Angela JohnsonPrincipal | KKRToigo , Harvard 2009

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Lori FeldmanExec. Recruiter, Global Talent AcquisitionMet Life

Jeffrey S. GandelManaging DirectorLong Wharf Real Estate Partners

Marisa GrantCIO | Montgomery County Public Schools Toigo , Columbia 2000


Matthew HolavesCo-Founder and Managing DirectorPillars of Wall Street

Antonio KeyAssociate | Bank of America Merrill LynchToigo , Wharton 2015

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David MarchickManaging Director | The Carlyle GroupChair, Toigo Board of Directors

Ashton NewhallManaging General PartnerGreenspring Associates

Sháka RasheedManaging Director | Lazard Asset ManagementToigo , Harvard 2001


Aalok ModyCo-Founder and Managing DirectorPillars of Wall Street

Karen SolorowPresident Coaching for Success, LLC

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Michael SteedFounder & Managing PartnerPaladin Capital Group


Javier SaadeAssociate Administrator, SBA Office of Investment and Innovation

Coleman SkeeterCEO | Truman JamesToigo, Columbia 2012

Tarrus RichardsonCEO | IMB Development CorporationToigo, Harvard 1996

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Peter W. WashingtonVice President | CapX PartnersToigo, Chicago Booth 2009 - Alumni Association Office of the President

Jim StevensDirector-Global Portfolio StrategiesMetLife

Ralph Taylor-SmithCo-Founder | Tech Strategic Capital Partners Toigo, MIT Sloan 2002

PRESIDENT & CEONancy Sims(510) [email protected]

DIRECTOR OF INSTITUTIONAL ENGAGEMENTNerissa Thomas(510) 584-9761Nerissa. [email protected]

DIRECTOR OF TALENT MANAGEMENTAngel Stewart(510) [email protected]

PROGRAM MANAGERValerie Allen(510) [email protected]

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Toigo Foundation Staff

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2015-2016 Toigo Fellow Calendar

September 2015September 11-13 Fall APEx Weekend – Washington, DCSeptember 12 Columbia Diversity MattersSeptember 14 Georgetown Career Management VisitSeptember 15 UVA Darden Career Management Visit

2015 PE Fellowship Application DeadlineSeptember 16 Duke Fuqua Career Management VisitSeptember 17 Explore Wharton: Diversity in ActionSeptember 17-18 Yale Discover Diverse PerspectivesSeptember 19 Harvard Fall Prospective Student Diversity Day

Toigo Associates Career WorkshopUCB Haas Diversity Workshop

September 22 Yale Career Management VisitSeptember 22-26 National Black MBA Conference – Orlando, FLSeptember 29 Harvard Career Management Visit

October 2015October 1 MIT Sloan Career Management Visit

2015-2016 MBA Fellowship Application LiveOctober 1-2 MIT Sloan Diversity DaysOctober 5 Columbia Career Management Visit

Sector Webinar: Investment BankingOctober 6 NYU Stern Career Management Visit

Sector Webinar: Investment ManagementOctober 9 Sector Webinar: International InvestmentsOctober 8-10 NSHMBA Conference – Chicago, IL

ROMBA Conference – Chicago, ILOctober 10 Stanford Many Voices: Perspectives on DiversityOctober 13 Sector Webinar: Private Equity October 14 Sector Webinar: Real Estate October 15 Sector Webinar: Public FundsOctober 16-18 NYU Discover Stern

Ross Up CloseOctober 20 Sector Webinar: Venture CapitalOctober 23 PE Fellowship First Look – New York, NY

Kellogg Diversity Preview Day Harvard Fall Prospective Student Diversity Day II

October 28 Chicago Booth Career Management VisitOctober 29 Kellogg Career Management VisitOctober 30 Michigan Ross Career Management Visit

November 2015November 4 Cornell Johnson Career Management VisitNovember 5-6 Johnson Means Business November 5-8 Tuck: Leading with Diversity Perspectives

November 7 Georgetown: Focus on Diversity

November 14 Texas MBA Diversity ForumNovember 19-21 Duke MBA Workshop for Minority Applicants

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2015-2016 Toigo Fellow Calendar

December 2015December 2 UCB Haas Career Management Visit (AM)

Stanford Career Management Visit (PM)December 3 UCLA Anderson Career Management Visit

January 2016January 24 Los Angeles Fellow Dinner

January 25 San Francisco Fellow Dinner

February 2016Mentor Check in Month

February 25 Chicago Fellow Dinner

February 29 Wharton Fellow Dinner

March 2016Class of 2016 Exit Interview with Nancy Sims beginMarch 1 Boston Fellow DinnerMarch 2 New York Fellow DinnerMarch 3 Cornell Fellow DinnerMarch 15 MBA Fellowship Application Deadline

April 2016Class of 2016 Exit Interview with Nancy Sims continueApril 8-10 Spring APEx Weekend – Bay Area, CA

April 9 – Class of 2016 Recognition Dinner

May 2016May 2-4 MBA Catapult hosted by Mesirow Financial– Chicago, IL

June 2016June 9 Toigo Gala - NY

Toigo Fellow Mandatory EventToigo Outreach Opportunity (School Captains)Toigo EventRegional Toigo EventCareer Management Sessions with Angel StewartCareer Webinar - 7-8PM Eastern/4-5PM PacificCollaborative Partner Event

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2015-2016 School Captains

Chicago BoothJaime Rocha

ColumbiaErnesto Padron

CornellZachary Raynor

Duke FuquaNicole Melwood

GeorgetownKaren Velasquez

Harvard Clifford Foster

Michigan RossCassandra Duchard

MITReegy Laloi

NYU SternBrian Mikail

RiceTheodore Williams

StanfordJulia Duzon

Texas McCombsKevin Johnson

TuckEmeka Kanu

UC Berkeley Haas Michael Young

UCLA AndersonSean Pompa

UVA Darden Kyle Coleman

Wharton Amanda Fields

Yale UniversityChase Harmon

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Resources

FOUNDERSue Toigo Fitzgibbon Toigo Associates

EXECUTIVE OFFICERSChairman David Marchick The Carlyle GroupVice Chair Denise Nappier Treasurer, State of ConnecticutTreasurer (new) Jay Ferguson Vicente Capital PartnersSecretary Andrea Beldecos JPMorgan Asset Management

GOVERNING BOARDJerry Albright Teachers Retirement System of TexasDan Allen State Universities Retirement System of IllinoisSheri Bronstein Bank of AmericaMary Cahill Emory UniversityEllen Blair Chube William BlairJose E. Feliciano Clearlake Capital Group, L.P. Jose Fernandez StepStone GroupLeslie Hale RLJ Lodging Trust Heather Hammond Russell Reynolds AssociatesCarla Harris Morgan StanleyDavid A. Hunt Prudential Investment ManagementTroy Jenkins Profit Investment Management Kate Jonas BlackRockHenry Jones California Public Employees’ Retirement SystemKatherine A. Lehman Lincolnshire Management, Inc. Victor MacFarlane MacFarlane PartnersTony de Nicola Welsh, Carson, Anderson & StoweJanice Cook Roberts Kohlberg Kravis Roberts & Co.Carlos Schonfeld Capital International Research, Inc. Eric Scott Palladium Equity Partners Dhvani Shah Illinois Municipal Employees Retirement FundJack Thayer Exelon Jim Williams J. Paul Getty TrustKelly Williams GCM Grosnevor Private MarketsJoel Wittenberg WK Kellogg FoundationPaul R. Yett Hamilton Lane Advisors

ADVISORY BOARDChristopher J. Ailman California State Teachers’ Retirement SystemJoe Alejandro Patrolmen’s Benevolent AssociationStuart Bernstein Capridge Partners Judy Chambers Pension Consulting Alliance, Inc.Vijoy Paul Chattergy Hawaii Employees Retirement System Janet Cowell Treasurer, State of North CarolinaAlex Doñé New York City Office of the Comptroller David Fann TorreyCove Capital Partners Carmen Heredia-Lopez, CFA WK Kellogg Foundation

PRESIDEN T & CEONancy A. Sims Toigo Foundation

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Toigo Foundation Board of Directors - 2015

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Last Updated: 10/13/2014 1

The Small Business Investment Company (SBIC) Program Helping Meet the Capital Needs of American Small Business

Program Overview The Small Business Investment Company (SBIC) Program, administered by the U.S. Small Business Administration (SBA), is a multi-billion investment program created in 1958 to bridge the gap between entrepreneurs’ need for capital and traditional sources of financ-ing. Over the past five years, the program has channeled $17 billion of capital to more than 5,900 U.S. small businesses representing a variety of industries across the country. These results were achieved through a proven public-private partnership that leverages the full faith and credit of the U.S. government to increase the pool of investment capital available to small businesses.

The SBIC Public-Private Partnership at Work The SBIC Program harnesses the talent of professional investment fund managers to iden-tify and finance promising small businesses. Qualified fund managers that complete the SBIC Program’s rigorous application process are granted a license to operate their fund as an SBIC. The SBIC can then leverage capital raised from private investors, such as banks, pension funds or high net-worth individu-als, with government-guaranteed debt obtained through the program. For every $1 the fund raises from investors, SBA will commit up

to $2 of debt, subject to a cap of $150 mil-lion. The SBIC manager can then assemble a portfolio of long-term investments in Amer-ican small businesses. When the invest-ments are realized and the fund begins to wind-down, the SBIC will repay its SBA-guaranteed debt and share the profits from its investments with the private investors that backed the fund.

SBIC PROGRAM QUICK FACTS From FY2010 through FY2014:

Over $17 billion in financing was invested in small businesses

Over 5,900 businesses received investments

22% of the small businesses financed were located in low-to-moderate income areas

8% of the small businesses were women-, minority- or veteran-owned

Office of Investment & Innovation • 409 3rd St., SW • Washington, DC • 20416 • (202) 205-2227 • [email protected]

Private Investors Pensions, Foundations, Banks

High-Net Worth Individuals,

U.S. Small Business Administration

Small Business Investment Company

Small Business

Small Business

Small Business Small Business Small Business Small Business Small Business

$1

$2

$3

Learn How to Participate at www.sba.gov/inv or e-mail [email protected] Fund Managers: Take advantage of our “Pre-Screening” pro-cess and consult with an SBIC Program In-vestment Officer to assess your fit with the SBIC Program.

Fund Investors: SBICs deliver multiple benefit to its investors such as CRA credit for banks, exemption from the Volcker Rule and the potential for en-hanced returns.

Small Business Owners: Visit our online directory of active SBICs and review our articles on how best to approach an SBIC for financing.

Flexible Financing for the Lower-Middle Market Most applicants to the SBIC Program seek a Standard License, which accommodates a wide range of investment strategies. For those funds investing in market segments that face unique challenges in accessing capital, SBA offers two additional license types.

Standard License

Strategy: For SBIC applicants seeking the broadest investment mandate, with no limits beyond the basic set of SBIC investment criteria (see next page)

Application Process: Rolling

Processing Time: Normal

SBA-Guaranteed Leverage: Up to 2x private capital $150M cap

Early Stage License

Strategy: Applicants commit to deploy at least 50% of their capital in early-stage companies that have yet to achieve positive cash flow.

Application Process: Single Deadline

Processing Time: Normal


Impact Investment License

Strategy: Applicants commit to invest-ing 50% of their capital in “impact in-vestments,” such as clean energy or low-to-moderate income investments.

Application Process: Rolling

Processing Time: Expedited


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We know that over the years, many Toigo Fellows have studied for exams which lead to the CFA or CAIA charterholder.

The following information is provided by organizations that hold distinctions of excellence within the field of financial services and/or alternatives. We hope the information is a valuable resource for those of you who do not know about these two programs or are interested in current communications.

THE CFA® PROGRAM

Where Theory Meets Practice

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THE CFA PROGRAM | WHERE THEORY MEETS PRACTICE 2

The program has evolved greatly since its inception. The original program focused on equity security analysis in a U.S. setting and emphasized ethical and professional standards. Today’s CFA Program covers a much broader Candidate Body of Knowledge™ (CBOK™), as shown in Figure 1, which reflects the continuing evolution of the profession. Although equity security analysis and ethical and professional standards still occupy prominent positions in the program, it also includes fixed-income analysis, alternative and derivative investments, portfolio management, and several other topics—all set in a global context. The current program is best described as a self-study, distance-learning program that takes a generalist approach to investment analysis, valuation,

and portfolio management, and emphasizes the highest ethical and professional standards.

The purpose of this article is to describe the CFA Program process in detail. You will learn how the CBOK and curriculum are established, how the examinations are developed and administered, and finally, how the examinations are graded and the minimum passing score is determined. After reading this article, we hope that you will conclude that the current CFA Program enhances the value of the CFA charter. Past CFA Institute Chair Frank Reilly, CFA, has aptly described the charter as the “crown jewel” of CFA Institute.

FIGURE 1CFA PROGRAM CANDIDATE BODY OF KNOWLEDGE (CBOK)

Knowledge/Comprehension

Application/Analysis

Synthesis/Evaluation

LEVEL II LEVEL IIILEVEL I

Investment ToolsQuantitative MethodsEconomicsFinancial Reporting & AnalysisCorporate Finance

Asset ClassesEquity InvestmentsFixed IncomeDerivativesAlternative Investments

Portfolio Management & Wealth Planning

THE CFA PROGRAMOn 15 June 1963, 284 senior analysts sat for the first CFA examination at various cities throughout the United States and Canada (during the initial year, the equivalent of the current Level III examination was the only examination required to earn the CFA charter). According to C. Stewart Sheppard’s The Making of a Profession: The CFA Program (1992, p. 8), “…268 were successful, and those who failed attributed it mainly to their lack of adequate preparation.”

ETHICS ETHICS ETHICS

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Overview

The success of the CFA Program is a function of active practitioner involvement. Practicing CFA charterholders are involved at every stage of the process, which is shown in Figure 2. The CFA Program is not an academic program, but rather one that focuses on the global investment management profession from the standpoint of a practitioner. The CFA Program process begins with a global practice analysis—a survey of current practicing investment professionals—to develop the CBOK, which is the foundation of the program. This process is led by the Education Advisory Committee (EAC), a group of prominent volunteer CFA charterholders. With the CBOK determined, CFA Institute staff, members, and consultants design the curriculum with EAC oversight of the process. The Council of Examiners (COE)—consisting of only CFA charterholders—then directs the development of the CFA examinations by the CFA exam writing team (a larger group of CFA charterholders who write the examination questions) based on the curriculum.

After administration of the examinations, CFA charterholders from all over the world arrive in Charlottesville, Virginia, USA, to grade the constructed response (essay and problem) portions of the Level III examinations. Multiple-choice and item set portions of the Levels I, II, and III examinations are machine graded. With grading concluded, additional groups of charterholders convene to “standard set” the examinations. Charterholder members of the CFA Institute Board of Governors then determine the minimum passing score for each level of the examinations.

Levels I and II candidates receive their examination results at the end of July (June examination) and at the end of January (December examination for Level I only); Level III candidates receive their results in early August. Only after passing the Level III examination and fulfilling the CFA Program’s work-experience requirement is a candidate awarded the right to use the coveted CFA designation.

Curriculum Development

Global Practice Analysis Many credentialing agencies use standardized examinations to ensure that candidates demonstrate a sufficient level of competence in their particular fields of interest. The claim that a candidate’s performance on the examination is a meaningful indicator of professional competence depends on evidence that supports the examination’s job relatedness or content validity. The Standards for Educational and Psychological Testing state that a practice analysis study—a compilation and confirmation of the knowledge and skills required for competent professional practice—is the basis for establishing the content validity of credentialing examinations. CFA Institute has worked closely with psychometricians—experts in testing and measurement—to develop and refine a high-quality practice analysis.

The CFA Institute Board of Governors first commissioned a practice analysis in 1995; previously, committees of charterholders developed the CBOK. In 2000, the board commissioned Knapp & Associates International, Inc., to assist professional staff in conducting a second practice analysis.

A series of panels and committees consisting of prominent investment practitioners created an inventory of critical responsibility and knowledge areas. The panels of CFA charterholders around the world were selected to represent the diversity in the profession with respect to geography, work setting, and professional role. The resulting product was converted to a survey and mailed to a global sample of charterholders. A total of 16,103 surveys were mailed and the results confirmed the work of the panels and committees in identifying the most critical knowledge areas for investment professionals. This practice analysis guided the development of the CFA Program curriculum and the Levels I, II, and III examination specifications.

Practitioners at Every Step of the Process

FIGURE 2THE CFA PROGRAM PROCESS

Education Advisory Committee Council ofExaminers

CFA Institute& Member Volunteers

CFA Institute,Member Volunteers& Consultants

Board ofGovernors

CANDIDATE

BODY OF

KNOWLEDGE

CURRICULUM EXAMINATIONS GRADING STANDARD

SETTING

MINIMUM

PASSING SCORE

GLOBAL

PRACTICE

ANALYSIS

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CFA Institute began its third formal practice analysis in late 2004. As with the processes in 1995 and 2000, regional expert panels were convened to define a CBOK that reflected the knowledge, skills, and abilities (KSAs) required of a generalist investment practitioner with four years of experience. A new feature of the third practice analysis was the addition of groups of senior investment professionals, known as employer panels, to define the KSAs expected of new charterholders. The expert and employer panels were followed by a broad online survey of all active CFA charterholders in February 2006, and a revised CBOK based on the results of the new practice analysis was available in November 2006. The revised CBOK was fully incorporated in the 2008 curriculum and examinations. In 2007, the EAC decided to conduct the practice analysis continuously rather than every five years to ensure that the CBOK continues to reflect the ever changing demands of the investment industry. In addition, the focus was expanded to include the GBIK™ Index (Global Body of Investment Knowledge).

The GBIK is a comprehensive outline of knowledge for the investment profession. Investment professionals can use GBIK concepts at any stage of their career—novice through expert and generalist or specialist. The GBIK includes mainstream and frontier concepts based on research that has been, or is being, debated and may encompass views well outside those of the mainstream. The GBIK guides all CFA Institute lifelong learning activities, including publications, conferences, and other continuing education programs. CFA Institute also develops specialty bodies of knowledge for those members

practicing in specialty areas, such as the private wealth management (PWM) body of knowledge and the certificate in investment performance measurement (CIPM) body of knowledge

In September 2009, the GBIK was published for the first time. This revised GBIK reflects the many new and enhanced topics identified by the continuous practice analysis process. Since then, the GBIK has been updated annually to reflect the changes identified by practitioners as part of the practice analysis process. The current GBIK is available on the CFA Institute website (cfainstitute.org/gbik). In 2014 a revised CBOK topical outline was published.

Since 2007, expert and employer panel sessions have been conducted in 25 cities in the three CFA Institute geographic regions: the Americas; Europe, Middle East, and Africa (EMEA); and Asia Pacific (APAC). Based on the discussions at these panel sessions, revisions necessary to maintain the relevance of the GBIK and CBOK have been identified.

A continuous process allows for more real-time inputs into the GBIK while maintaining the high standing of the CBOK. The continuous practice analysis process also incorporates significantly more member input in the initial phase by using a collaborative website to collect information from around the world.

Candidate Body of Knowledge and Topic Area WeightsA major outcome of the practice analysis is an updated CBOK. The CBOK is the scope of knowledge needed for basic competence in investment management, with “basic competence” defined as the baseline level of knowledge and skills required to perform professional responsibilities in an effective and ethical manner.

The CBOK has been gradually broadened from the body of knowledge for the first CFA examination, which focused on (1) investment goals, investment timing, and portfolio balance; (2) institutional investing; (3) ethical issues; and (4) review of securities regulations. Over time, entire topic areas—such as fixed income, derivatives, and alternative investments—have been added to keep pace with the changing profession. Because the CFA Program is global in scope and laws and regulations differ among countries, the CBOK no longer includes specific country securities regulations. But to prepare CFA charterholders for the global marketplace, the CBOK does reflect globally accepted reporting standards, such as the International Financial Reporting Standards (IFRS), and prominent tax and legal regimes that affect investment decision making.

In the CBOK, a total of 10 topics are grouped into four functional areas: ethical and professional standards, investment tools, asset valuation, and portfolio management and wealth planning, as shown in Figure 1. The CFA examinations have always focused primarily on testing investment tools at Level I, asset valuation (investment analysis) at Level II, and portfolio management at Level III. This structure is the logical progression of the investment process: A practitioner needs to master investment tools to apply those tools to asset valuation, and assets need to be valued and then analyzed in a risk–return

Global Body of Investment Knowledge

Candidate Body of Knowledge

Private Wealth Management Body of Knowledge

CIPM Body of Knowledge

FIGURE 3BODIES OF KNOWLEDGE

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portfolio context. Because integrity must be exercised throughout the investment process, CFA Institute has emphasized ethical and professional standards at each level. Although all CBOK topic areas relate directly to competence in investment management, they do not all have the same degree of impact on professional practice. Some areas may be more important or may be used more frequently than others in day-to-day responsibilities. Consequently, based on practice analysis survey respondents’ recommendations about content coverage, weights are assigned to each topic area to indicate relative emphasis within the CBOK. In turn, these weights, shown in Table 1, guide the development of the curriculum and examinations.

The Curriculum ProcessThe CFA curriculum constitutes the study material on which the examination questions are based and provides the foundation for the development of the exams. The curriculum topics are those CBOK elements identified in the practice analysis.

The purpose of the curriculum is to facilitate candidate learning while recognizing the constraints inherent in a generalist, self-study program designed for working professionals. More than 300 practicing charterholders from throughout the world participate in the annual curriculum review and development process.

The CFA Program is fundamentally different from typical academic programs. The curriculum traditionally has been based on textbooks, professional journal articles, commissioned readings, cases, and research analysts’ reports, but it is more than just a reading list.

In 1996, CFA Institute significantly improved the design of the curriculum by adding learning outcome statements (LOS) at Level III; LOS were then incorporated at Levels I and II the following year.

Many involved in the curriculum development and review process believe that reading-specific LOS—a common feature throughout education—are the most significant curriculum innovation since the inception of the program. The purpose of the LOS is to enhance candidate learning while guiding examination writers, the COE, as to what examination questions the curriculum material will support. The LOS link the CBOK to the curriculum and thus to the examinations, helping candidates prepare for the exacting standards of the investment profession.

Reading-specific LOS help candidates understand the knowledge they must gain from each reading. Each LOS contains the words “The candidate should be able to…” followed by command words (such as calculate, describe, and analyze) that indicate what candidates will be expected to demonstrate on the examinations.

The COE and CFA exam writing team write examination questions and guideline answers that are within the bounds of the LOS, often integrating more than one LOS in a question. The COE views the LOS as a contract with the candidates: If candidates can do what the LOS indicate, they should be well prepared for the examinations. It is the job of the CFA Institute staff, with process oversight of the EAC and the input of members, to ensure that the readings enable the candidates to achieve each of the LOS.

Topic Area Level I Level II Level III

Ethical and Professional Standards 15 10 10

Quantitative Methods 12 5–10 0

Economics 10 5–10 0

Financial Reporting and Analysis 20 15–25 0

Corporate Finance 8 5–15 0

Investment Tools 50 30–60 0

Equity Investments 10 20–30 5–15

Fixed Income Investments 12 5–15 10–20

Derivatives 5 5–15 5–15

Alternative Investments 3 5–15 5–15

Asset Valuation 30 35–75 25–65

Portfolio Management and Wealth Planning 5 5–15 45–55

Total 100 100 100

TABLE 1

TOPIC AREA WEIGHTS

Note: These weights are intended to guide the curriculum and exam development processes. Actual exam weights may vary slightly from year to year.

Please note that some topics are combined for testing purposes.

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The following is an example of the Level II reading-specific LOS and associated command words from “Multinational Operations,” by Timothy S. Doupnik and Elaine Henry, CFA (CFA Institute, 2013):

The candidate should be able to:a) distinguish among presentation (reporting) currency, functional

currency, and local currency;b) describe foreign currency transaction exposure, including

accounting for and disclosures about foreign currency transaction gains and losses;

c) analyze how changes in exchange rates affect the translated sales of the subsidiary and parent company; and

d) compare the current rate method and the temporal method, evaluate how each affects the parent company’s balance sheet and income statement, and determine which method is appropriate in various scenarios.

Curriculum InnovationsIn response to candidate demand, CFA Institute began phasing in a customized format for delivery of the curriculum for the 2006 exam. CFA Institute sequenced the LOS and assigned readings in conformity with the study sessions and assembled those components into self-contained volumes. The improved packaging offers candidates a more user-friendly and integrated curriculum that reduces candidate costs and facilitates examination preparation.

The latest curriculum delivery innovation was the release of the curriculum e-book in November 2009. The e-book provides access to the curriculum in digital format.

Historically, the curriculum was drawn from existing professional and academic publications. CFA Institute advisory committees, however, recognized the disadvantages of these off-the-shelf sources. For instance, college texts are often overly academic and “country-centric,” and practitioner texts are rare and often inappropriate for a generalist. Journal articles often presume more knowledge than is required of a generalist. Perhaps the greatest weakness in off-the-shelf products is that they often contain a significant amount of material outside the CBOK. As a result of these disadvantages, the decision was made to begin developing curriculum readings specifically for the CFA Program. Authored by investment practitioners and leading academics, these readings balance conceptual rigor with the application perspective of financial analysts and portfolio managers. As of July 2013 more than 90% of the CFA Program curriculum consists of material commissioned by CFA Institute.

Curriculum development is not a recent phenomenon at CFA Institute. In The Making of the Profession: The CFA Program, Sheppard notes the “marked paucity in 1965 of relevant study guide materials” and states, “Gone were the days when reliance could be placed on general textbooks and selected articles” (1992, p. 10). Since that time, CFA Institute (known as the Institute of Chartered Financial Analysts at the time and later as the Association for Investment Management and Research) has worked closely with many subject matter experts, authors, and publishers to customize materials for the CFA Program.

A cornerstone of the CFA curriculum has been the book Managing Investment Portfolios, edited by John L. Maginn, CFA, and Donald L. Tuttle, CFA (1983). In 2006, the third edition of this seminal work was edited by Dennis W. McLeavey, CFA, and Jerald E. Pinto, CFA, in collaboration with the two original editors, and remains the foundation of the portfolio management curriculum. Beginning in 2000 a series of books was commissioned by CFA Institute to provide curriculum content in fixed income, derivatives, quantitative methods, financial reporting and analysis, and equity valuation. Since their introduction to the curriculum, many of these readings have been revised and/or replaced in response to advances in the investment management industry. In addition, the Level I and II fixed-income readings (2013), Levels I, II and III of the economics curriculum (2012), the portfolio management and equity readings at Level I (2010), and the Level III behavioral finance (2011) readings were commissioned to replace externally developed material. The following principles have been established for the development of CFA Program curriculum. The material must be

@ faithful to the practice analysis and CBOK; @ valuable to members, employers, and investors; @ globally relevant; @ generalist (as opposed to specialist) in nature; @ appropriate for a new charterholder; @ replete with examples and practice problems both within

and at the end of readings; @ pedagogically sound in a self-study framework; and @ testable.

A distinguishing feature of the curriculum development at CFA Institute is the extensive review process that all products are subject to. Practicing charterholders review each reading or article to ensure that it is conceptually correct and relevant. Practitioners from all over the world participate in this process. Frank Fabozzi, CFA, who has been a long-time contributor to the CFA Program curriculum, commented, “Of all the books I have authored (more than 100), these books have been the hardest to write… The reviewers made me an almost paranoid writer, as every word and statement was scrutinized to make sure it would be clearly understood by the CFA candidate.”

CFA Program Partners are a group of high profile, globally diverse academic institutions that incorporate the CBOK, including the CFA Institute Code of Ethics and Standards of Professional Conduct,

into their degree programs and support the strategic objectives of CFA Institute. Status as a CFA Program Partner provides a signal to potential students, current students, and the marketplace that the university’s curriculum is closely tied to professional practice and is well suited to preparing students to sit for the CFA exams. In 2012, CFA Institute began more broadly recognizing schools that incorporate

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the CBOK into their degree programs with the University Recognition Program. To find out more about CFA Institute university outreach initiatives, visit the “Community” section of the CFA Institute website (www.cfainstitute.org).

Examination DevelopmentWhen the first CFA charters were awarded in 1963, candidates had to successfully complete a single examination that was four and a half hours long to earn the charter. The examinations were given in two separate sessions of two hours and fifteen minutes. In 1964, all three levels of the examination were administered to 1,732 candidates in the United States and Canada. In 1968, the examination consisted of two sessions for a total of five hours and fifteen minutes. The year 1981 marked the first time that the examinations totaled six hours in length. CFA Institute has retained the current format of two separate three-hour sessions for each of the three exam levels since that time.

Examination ContentA commitment to excellence in the development of the CFA examinations has been the hallmark of the program. The COE and CFA exam writing team write the examinations with the assistance of CFA Institute staff. In 1963, the original COE consisted of four U.S. academic experts and the president of the Montreal Stock Exchange. Today, there are more than 100 CFA charterholders from around the world serving on the COE and CFA exam writing team. Another large and globally diverse group of charterholders is involved in an extensive review process. CFA exam writing team members are recruited based on their expertise in different areas of investment practice and CFA curriculum topics. Prospective members are often identified on the basis of other services supporting the CFA Program (e.g., standard setting, curriculum development, exam review, and grading).

CFA Institute follows the professional advice of expert psychometricians on all aspects of testing, including exam design, question structure, and exam performance evaluation. CFA Institute uses three question formats on its examinations. Selected response questions are simple multiple choice at Level I and item sets at Levels II and III. Item sets are sets of six multiple choice questions and each set is directly related to case information provided in narrative and/or tabular form. All selected response questions have three answer choices. Constructed response (essay) questions appear only on the Level III exam. These formats support the primary focus on knowledge and comprehension at Level I, application and analysis at Level II, and synthesis and evaluation at Level III. Given the nature of the profession and the targeted learning outcomes, candidates will be asked to analyze financial data and apply investment concepts at all three levels.

Each exam development cycle starts close to a year in advance of the examinations. Each cycle begins with COE leaders meeting to set the guidelines for the next examination. These guidelines are disseminated to CFA exam writing team members, who then begin drafting questions before the first of a series of team meetings. To be included on the CFA examination, a question must relate directly to one or more LOS in the curriculum. CFA exam writing team members

are also encouraged to use assigned curriculum problems for ideas on question structure and content. The CFA exam writing team develops more questions than needed so that the COE can select the best portfolio of questions to appear on the examinations.

The CFA exam writing team revises examination questions continuously during a development cycle. Each new version benefits from review by the COE, CFA exam writing team members, expert and generalist volunteers, and staff reviewers. During the cycle, hundreds of hours of review time contribute to the improvement of examination questions.

CFA exam writing team members are also responsible for writing guideline answers, grading keys, and answer justifications, as well as documenting LOS coverage, reading references, and other supporting information.

Once the examination is in nearly final draft form, CFA Institute staff conduct review sessions with charterholders from around the world. Participants review the questions to ensure that the language is clear, simple, unambiguous, and free of cultural bias. Reviewers also identify any investment practices that may be inconsistent with practices in their regions. This information is used to revise the questions before the printing of the examinations.

Level I ExaminationThe format of the Level I examination is entirely multiple choice. There is a long history of multiple-choice questions on the CFA examinations, dating back to 1968 when 25 multiple-choice questions first appeared on the Level I exam. By 1986, 50% of the Level I examination was multiple choice. The first all multiple-choice Level I examination was administered in 1996.

Level I multiple-choice questions are crafted with each of the incorrect responses (distracters) carefully constructed to represent common mistakes in either calculation or logic. A Level I examination consists of 240 questions to be completed in a six-hour time frame.

Levels II and III Item Set QuestionsItem set questions were introduced in 2000; since 2005, the Level II examination consists entirely of item set questions. Level III consists of constructed response questions (morning session) and item set questions (afternoon session). Item sets are organized in groups of six questions that are related to a case or vignette that describes investment challenges facing hypothetical individuals or institutions.

Sample item set questions are available on the CFA Institute website.

Level III Constructed Response QuestionsThe constructed response (also termed Essay) portions of the Level III examination (morning session) include questions with varying structures and point values and typically have several parts related to a case study that describes one or a series of investment challenges. Each question begins with a command word that

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corresponds to the command words contained in the curriculum LOS. The command words used on the examinations are also available at www.cfainstitute.org.

Constructed response examination questions have changed significantly over the history of the CFA examination. In the early years of the examination, large point value, open-ended questions were common. For instance, the 1965 Level III examination contained the following 25-minute question:

“The value of a common stock or any other security is what you can sell it for.” Analyze the above statement and explain fully how you would arrive at the value of a common stock.

Today’s CFA examination questions are less open-ended and have smaller point values in order to sample more of the assigned curriculum. Questions are often presented in template format to assist candidates in following the logic of the application being tested and to guide candidates regarding the appropriate length of answers.

On the early CFA examinations, it was common to give candidates choices. Candidates were allowed to select the industry of their choice, the institution of their choice, or even which of two or three questions from a longer list they wanted to answer. For example, the 1965 Level III examination gave candidates the choice of answering either a bond or stock valuation question. That same examination gave candidates the choice of one of eight institutions (e.g., investment companies, endowment funds, or pension funds) as the subject of a question and also asked candidates to answer a question on the industry of their choice.

Today’s CFA examinations cover all of the topics in the CFA Program curriculum. Candidates must answer the entire set of questions, each based on specific readings. This policy is consistent with the premises that the CFA examination takes a generalist approach to investment analysis and portfolio management and that all successful candidates have mastered the same curriculum. One of the strengths of the CFA Program often cited by employers is that charterholders are knowledgeable even in investment topics in which they are not practicing.

Candidates today are also given an indication as to how much detail is required to successfully answer a question. For example, questions may state, “Discuss three reasons...,” and the candidate will have a good indication of how much discussion is necessary.

Although it may appear that the constructed response portion of the CFA examinations is unchanged since the founding days of the program, today the candidates’ responses require a higher degree of specificity. The current CFA examinations are dramatically different from the examinations given in the early history of the program, properly reflecting the evolution of both investment management practice and testing techniques used to evaluate that practice. Constructed response questions that have appeared on recent exams are available on the CFA Institute website (www.cfainstitute.org).

Note that guideline answers published by CFA Institute reflect most of the answers that received high scores on each question. There may often be more than one appropriate (and full credit) answer to a question. All possible approaches that received high scores are not necessarily included in a published guideline answer. Candidates are not expected to provide answers as complete and well-written as the published guideline answers to receive full credit.

Practice QuestionsAdditionally, CFA Institute includes practice tests and mock exams with registration for the exam. These assessments are written in the same format and approximate difficulty level as live examination question.

Examination AdministrationOnce the COE and CFA exam writing team finish writing the CFA examinations, the examination books are produced following a secure workflow process developed by CFA Institute and its vendors. After printing and before distribution, the CFA Institute staff perform quality control checks on examination books to ensure the quality of the printing process. The books are then distributed globally and securely stored until exam day.

CFA Institute enlists the help of professional testing personnel around the world who are responsible for selecting and training examination proctors to administer the test with the utmost attention paid to the security and integrity of the examination process. In addition, trained CFA Institute employees travel to the larger test centers to observe testing operations and ensure that the administration runs professionally.

CFA Institute strives to produce a fair and equitable testing environment and to ensure the safety of CFA candidates and testing personnel. To ensure the integrity of the process, strict testing policies are enforced. Beginning in January 2011, candidates are required to register for the exam with a valid international travel passport. The information on the passport presented on exam day must match the registration records. This policy sets forth one global standard, in the form of a single document that is both internationally obtainable and recognizable, that allows CFA Institute to confirm the identity of the candidates and to ensure that all candidates receive identical treatment during the exam day admission process. Candidates are required to use only approved calculator models to ensure that no candidates use calculators that have the ability to store text in memory and thus gain an unfair advantage. Unauthorized personal belongings are not permitted in the testing room. CFA Institute consults with other respected testing organizations in an effort to improve policies and practices. Security and testing policies will continue to evolve. You can review testing policies in the CFA Program > Exam Details section of the CFA Institute website (www.cfainstitute.org).

The CFA Institute Professional Conduct Program investigates matters involving alleged violations of the CFA Program rules and regulations. Disciplinary sanctions are imposed on candidates that are found to have violated the rules and regulations, such as writing past

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time, using an unauthorized calculator or scratch paper, and giving/receiving assistance during the examination. If a candidate is found to have violated the rules and regulations, the imposed sanction may range from private reprimand to prohibition from further participation in the CFA Program.

Once the examinations have been successfully administered, they are collected, reconciled, and returned to CFA Institute for processing and grading. It may take as long as two weeks for all exams to be returned because of complex customs procedures in some countries.

GradingImmediately upon receipt at CFA Institute, all exam materials are reconciled with attendance rosters and prepared for the grading and quality control processes. The first step in the grading process is the machine grading of all multiple-choice and item set exam answer sheets. This process also encompasses a number of quality controls, such as checking damaged papers and independently auditing a random sample representing approximately 5% of candidates’ answer sheets.

Another quality control during this period is the investigation of all comments and complaints related to the examinations. The staff reviews the exam questions and answers, curriculum readings, and exam results related to each comment or complaint. Special focus is given to reviews under any of the following circumstances: multiple similar complaints, exam results suggesting more than one correct answer, or exam results that otherwise suggest that a question was confusing or unfair. If, after investigation, a question is determined to be confusing or unfair, results are adjusted to credit all answers. If two answers are determined to be correct, both answers are credited.

Every year, several hundred charterholders from around the world spend one or two weeks in Charlottesville, Virginia, USA, carrying out one of the most important duties available to CFA charterholders—grading the constructed response portions of the Level III CFA examination.

The involvement of CFA charterholders in grading the examinations is one of many checks and balances in the CFA Program designed to ensure that each candidate receives fair and consistent evaluation. The identity of all candidates is held in the strictest of confidence. Examination books identify candidates only by number. Graders do not know the name or even the geographic origin of the candidates whose examinations they evaluate.

To ensure that each grader has adequate time to prepare, graders receive their question assignments, appropriate curriculum materials, and draft guideline answers and grading keys well in advance of the grading session. This process allows graders to suggest changes to the guideline answers and grading keys before grading begins.

Graders are separated into grading teams that include both experienced and first-time graders. Each team grades a specific question or question part(s), which brings a high level

of specialization to the process. Each team has a captain, an assistant captain, and senior graders. These team leaders review all suggestions made by the graders before grading. They also review a large sample of actual candidate answers to ensure that the grading keys credit all valid responses and award partial credit consistent with the relative importance of the information provided by the candidate. After extensive review and trial application, grading coordinators approve the final grading keys that will be applied to the assigned question. Graders are trained in evaluation procedures and techniques.

Grading coordinators oversee the grading process, ensuring that all grading teams treat candidates consistently across questions. Once grading begins, captains, assistant captains, and other assigned leaders spend much of their time reviewing graders’ work to ensure that points are awarded accurately and consistently across the team.

Quality control is built into all aspects of the grading process. Access to the examination grading center is closely monitored. CFA Institute staff members assemble examinations into stacks of 20 books. Only graders are permitted to check out examinations, and they may grade only their assigned question, one stack at a time. A formal audit process compares and reconciles points awarded by individual graders, with points awarded by the team captain for the same candidate’s response to a given question on a sample of exam papers. Team captains (and coordinators) are provided with detailed daily statistical reports (including audit reports) to ensure that grading is consistent and accurate.

Grading coordinators, team captains, and CFA Institute staff meet daily to ensure consistent application of grading policies. Coordinators are CFA charterholder members with extensive experience in both exam development and grading. Examinations are also checked several times during grading to be sure that no recording errors or data entry errors have been made. The error checking process is repeated several times and continues after the grading process has been completed.

After all examinations have been fully graded during the first week, approximately the middle 50% of the distribution of scores are graded again in their entirety—a process known as senior grading. Senior graders, approximately half the initial grading group, are not permitted to re-grade papers that they graded during initial grading. The purpose of senior grading is to ensure that candidates whose papers fall within a large range that encompasses possible minimum passing scores are afforded every opportunity to pass the examination.

All examinations are subject to an additional quality control check. Each examination book is reviewed page by page to ensure that every candidate answer was located, graded, and scored and that the number of points awarded by the grader on the inside of the examination book is consistent with the score recorded in the grading database.

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Standard SettingSince 1996, CFA Institute has used the modified Angoff Standard Setting Method to assist the Board of Governors in establishing the minimum passing score (MPS) on each CFA examination. Angoff is the best known and most widely used standard setting method among professional credentialing programs.

The Angoff method has been used as a criterion for the establishment of the MPS for the Level I examination since 1996. CFA Institute retains independent psychometricians to conduct standard setting workshops for each exam.

Standard setting involves a large and diverse group of CFA charterholders. The lead psychometrician divides participants into two smaller groups for each level of the examinations. Each participant reviews the entire examination, question by question, and makes an independent judgment on the expected performance of a just-competent candidate on each question on the examination.

Participants review the entire examination a second time after reviewing “impact data” and overall actual candidate performance on the exam. In the second round, each participant again records his or her judgment regarding the expected performance of a just-competent candidate on each question. In this way, both difficulty of the examination content and actual candidate performance are considered. The workshops result in MPS recommendations that establish an appropriate competence level in the subject matter from the perspective of demographically representative groups of charterholders. The size of the group, its diversity, and its reliance on independent judgments contribute to the power of the standard setting results.

Setting the Minimum Passing ScoreCFA charterholder members on the CFA Institute Board of Governors set the MPS to be applied to each examination. The Board convenes approximately six weeks following the exam to determine the Levels I and II MPS and approximately seven weeks after the Level III exam to determine its MPS. Although pass rates may fluctuate, the Board’s objective is to require a consistent standard competency level across years.

The Board assesses the difficulty of the examinations and the demonstrated competency of candidates. They consider all available information relevant to these factors. The results of the standard setting workshops are the most important input. From the Board’s perspective, standard setting is a systematic process that adheres to sound psychometric principles, providing the Board with a valid range of MPS values. The Board’s Guiding Principles for Setting the CFA Examination Minimum Passing Score is available on the CFA Institute website (www.cfainstitute.org).

CFA Institute staff and the Board will continue to monitor advances in the psychometric field to augment the information currently used to set the MPS.

Pass RatesFollowing the Board’s MPS decision, CFA Institute generates results and conducts a variety of quality control measures before results are released to candidates. The time required is the minimum necessary to ensure that the MPS is set in accordance with best practices in testing and that every candidate’s exam is processed with appropriate due diligence.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

FIGURE 4

PASS RATES 2000-2013 LEVEL I LEVEL II LEVEL III

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Pass rates are calculated from those candidates who actually sat for the examination. Approximately 25% of enrolled candidates who register do not sit for the examination (are no-shows) each year.

Falling pass rates over time reflect the expansion of the candidate pool and related shifts in academic and professional experience, the steady evolution of the CBOK supporting the investment profession, and candidate preparation practices.

Candidates receive examination results in late July or early August (for the June examination) and late January (for the December examination). Candidate results are emailed and are available in a secure section of the CFA Institute website. CFA Institute posts scores as “pass” or “fail” and provides candidates with an indication of performance across topic areas or questions to help identify strengths and weaknesses. Candidates learn whether they scored less than 50% of the points, between 50% and 70% of the points, or more than 70% of the points by topic.

Beginning with the June 2008 results, CFA Institute provided unsuccessful candidates with additional information to help them decide whether to continue to pursue the CFA designation. The total number of unsuccessful candidates at each level is divided into 10 groups or score bands so that candidates can see how they performed relative to all unsuccessful candidates.

The highest score bands indicate proximity to the MPS. CFA Institute does not release the MPS or individual scores. CFA Institute does not want to invite comparisons of performance within or across exam administrations. The primary objective of the examination, as with most professional credentialing and licensing programs, is to allow candidates to demonstrate that they meet the standard established for competency in the profession.

Following the release of exam results, candidates who did not pass have the option to have their exams retabulated. Exam score retabulation is a verification of the final score by which CFA Institute staff manually verify that all parts of all questions answered in accordance with the instructions were found and graded and that the scores were recorded and added correctly.

Regulatory, Professional, and Educational RecognitionWe hope that you agree the standards and rigor of the CFA Program have been maintained and even enhanced. The stakes of the CFA Program are higher than ever because the CFA charter has become a de facto condition of employment in many investment management organizations.

Regulatory authorities are also on the list of organizations that recognize the value of the CFA charter. Examples include authorities in Australia, Brazil, Canada, Germany, Hong Kong, South Africa, the United Kingdom, and the United States. The Securities and Futures

Commission in Hong Kong has recognized the passing of Level I of the CFA Program as providing an exemption from several modules of its licensed representative exams. The Financial Conduct Authority (FCA) in the United Kingdom has recognized Level I of the CFA Program in combination with the Investment Management Certificate (IMC), or Level III with the IMC Unit 1, as satisfying the Retail Distribution Review (RDR) requirements. All of the state securities commissions in the United States that require an investment adviser licensing examination grant CFA charterholders a blanket exemption, and the CFA designation is one of only a few designations that is awarded such status. In addition, the Financial Industry Regulatory Authority (FINRA) provides an exemption from the analytical portion of the Series 86 Examination for certain applicants who have passed Level II of the CFA examination.

In addition to regulatory recognition, educational and professional recognition also enhances the value of the charter. The U.K. National Recognition Information Centre (U.K. NARIC) benchmarked the CFA Program and CFA charter as comparable with a QCF Master’s Level 7 qualification within the U.K. Qualification and Credit Framework (QCF). The CIPM Program was benchmarked at Level 6 (Bachelor’s) and the Claritas Investment Certificate at Level 3 (completion of a pre-university education). U.K. NARIC is the U.K. national agency responsible for providing information, advice, and expert opinion on vocational, academic, and professional skills and qualifications. Universities and other qualification programs also recognize the CFA Program. For example, successful CFA Level II candidates applying for the Master in Advanced Finance program at the IE Business School in Spain can waive the requirement to submit GMAT or GRE scores. The Professional Risk Manager program recognizes the CFA Program, and for charterholders, it waives the first two exams in its four-exam program. As with regulatory recognition, these educational and professional waivers are a direct member benefit.

Future of the CFA ProgramCFA Institute staff and CFA charterholder volunteers involved in the activities described in this article are committed to upholding fair and consistent standards for obtaining the CFA charter. The CFA Institute Board of Governors established a clear guiding principle for governance of the CFA Program on which all decisions will be made: “Never lower standards, either educational or ethical. Growth for growth’s sake is not the goal.” This commitment to upholding ethics, educational rigor, and professional excellence has been recognized on various occasions in publications, including the Economist and the Financial Times.

The CFA Program will continue to evolve to meet the changing needs of the capital markets. We are proud of the CFA Program and its history. Much of the success of the CFA Program is attributed to the participation of many practitioner charterholders who, along with CFA Institute staff, specify the CBOK, develop the curriculum and examinations, grade the examinations, and recommend the passing standards for the examinations to the Board of Governors. CFA Institute welcomes all inquiries and suggestions regarding the CFA Program.

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www.cfainstitute.org

THE CFA CHARTERIf you’re looking for a passport to a competitive career in the quickly evolving world of investment and global finance, you should know about the CFA® charter.

Daniel Gamba, CFA (New York)

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The Chartered Financial Analyst® (CFA) credential is the globally recognized mark of distinction and benchmark for measuring the expertise, experience, and ethics of serious investment professionals. Earning it demonstrates mastery of a broad range of practical portfolio management and advanced investment analysis skills that will open doors at any stage in your career.

BENEFITS OF EARNING THE CFA CHARTER

• REAL-WORLD EXPERTISE. Demonstrate your fluency with an advanced investment management and analysis curriculum that leverages current best practices and the experience of practition-ers around the world to bridge real-world practices and theoretical knowledge.

• WORLDWIDE RECOGNITION. Stand out in the competitive global industry and gain instant credibility with peers, employers, and clients who know the hard work, intelligence, and profound com-mitment it takes to earn the charter.

• ETHICAL GROUNDING. Learn to apply ethical practices and gain a foundation of the skills needed to demonstrate the commitment to high standards of accountability and integrity that build a trusted reputation.

• GLOBAL COMMUNITY. Join a vast professional network of more than 100,000 charterholders worldwide and gain unmatched career resources, important relationships, and lifelong insights.

WHAT JOBS DOES IT PREPARE YOU FOR?CFA Charterholder Occupations

PORTFOLIO MANAGER 22%

14% RESEARCH ANALYST

7% CHIEF-LEVEL EXECUTIVE

RELATIONSHIP MANAGER 4% 5% CONSULTANT

4% RISK MANAGER

* Data is self-reported and not verified by CFA Institute. Counts are approximate based on data from September 2011. Represents 56% of respondents.

For more information, visit www.cfainstitute.org

WHAT YOU WILL LEARN

The CFA Program is offered in a self-study format and is divided into three levels of exams.

LEVEL I LEVEL II LEVEL III

INVESTMENT ASSET PORTFOLIO TOOLS VALUATION MANAGEMENT

KNOWLEDGE & APPLICATION & SYNTHESIS & COMPREHENSION ANALYSIS EVALUATION

LEAR

NIN

G

TOPI

C FO

CUS

FOCU

S

The curriculum is organized into 10 general topic areas that provide a framework for making investment decisions:

I. ETHICAL AND PROFESSIONAL STANDARDSII. QUANTITATIVE METHODSIII. ECONOMICSIV. FINANCIAL REPORTING AND ANALYSISV. CORPORATE FINANCEVI. EQUITY INVESTMENTSVII. FIXED-INCOME INVESTMENTSVIII. DERIVATIVESIX. ALTERNATIVE INVESTMENTSX. PORTFOLIO MANAGEMENT AND WEALTH PLANNING

HOW TO EARN THE CHARTER:

1. Become a CFA candidate and enroll in the CFA Program. To do so, you must:• Meet one of the following criteria:

º Have a bachelor’s (or equivalent) degree, º Be in the final year of a bachelor’s degree program, º Have four years of professional work experience, or º Have a combination of professional work and university

experience that totals at least four years.• Be prepared to take the exams in English.• Have a valid international passport.• Meet the professional conduct admission criteria.

2. Pass the Level I Exam (June or December).3. Pass the Level II Exam (June).4. Pass the Level III Exam (June).5. Have four years of professional work experience in the

investment decision-making process (accrued before, during, or after participation in the CFA Program).

6. Join CFA Institute as a regular member.

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34

www.cfainstitute.org

As an investor in today’s ever-changing,

global financial markets, you should be

seeking more than above-market returns to

measure the competency and integrity of

the investment professionals who manage

your assets. The need for investors to hire

qualified, experienced professionals who

embody trust, integrity, and competency has

never been as great as it is today.

No credential is as widely regarded in the

global financial industry for its rigorous focus

on current investment knowledge, analytical

skill, and ethical standards as the Chartered

Financial Analyst® designation. With more

than 100,000 CFA® charterholders in over 135

countries and territories and an increasing

demand worldwide for the CFA Program, the

charter has become the global professional

investment credential.

THE CFA DESIGNATION

A Mark of Peerless Distinction

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35

Marketing

Portfolio Manager

Analyst

Business Development / Sales

Consultant

Asset Allocator

Risk Management

Due Diligence

Accounting / Fund Administrator

25%

18%

13%

9%

7%

6%

5%

4%

3%

San Francisco

Los AngelesChicago

Canada

Boston

Amherst

Singapore

Hong Kong

Korea

Washington, DC

London

GermanyNetherlands

France

Iberia

Luxembourg

Switzerland

New YorkCayman Islands

Australia

Texas

China

@CAIAAssociation

Search: CAIA-Association

Search: CAIA-Association

Chart Above: Showing Members by Job Function (Source: Nov. 2014 Survey Data)

22 Official CAIA Chapters

4 Regional Offices

20+ CAIA Member Networks MEMBERSHIP PROFILE

Stay connected via a global network

The CAIA Association is the gateway to a community of more than 7,700 Charterholders located in more than 80 countries.

A not-for-profit organization founded in 2002, the CAIA Association has grown rapidly, now supporting 20+ Chapters located in financial centers around the world and sponsoring more than 120 educational and networking events each year.

Add value to your personal brand

CAIA Charterholders are leaders. To employers, a CAIA delivers a distinct advantage in the marketplace.

In addition to providing an understanding of the asset classes and strategies, the program affords deep knowledge of the risk-return characteristics of alternative investments in portfolio construction, whether it is for wealth creation or preservation.

Leverage your knowledge

The CAIA Association offers the only education program uniquely designed for individuals specializing in alternative investments (hedge funds, private equity, commodities, real estate, managed futures, etc.).

The CAIA Charter, which is granted upon successful completion of two levels of qualifying exams, combined with relevant professional experience, conveys a depth of knowledge, demonstrated expertise, and global credibility in alternative investing.

The CAIA Charter: The Global Mark of Distinction in Alternative Investment Education

The Chartered AlternativeInvestment Analyst Program

The smartest investment you can make

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AdditionalResponsibilities

NewPosition

Table Above: Career Value of the CAIA DesignationShowing percentage of new members who attribute a positive career outcome to the CAIA Charter (source: November 2014 Survey Data).

The CAIA Curriculum and CAIA Study Materials are available

at caia.org/candidates. Some candidates choose to augment

their study of the CAIA curriculum materials with third-party

preparation programs. You may find a list of these independent

exam preparation providers* at caia.org/prep.

*The CAIA Association does not endorse, promote, review, or warrant the accuracy of the

courses, products, materials and/or services offered by any third-party program provider.

The CAIA MembershipUpon passing the Level II exam, you are eligible to join the CAIA Association and become part of a community of driven and dynamic Charterholders. Members are invited to attend educational and networking events organized by regional Chapters globally. Events often include speakers and panels on relevant topics where CAIA Members can earn continuing education credits and exam exemptions from other professional associations.

CAIA Members have access to targeted job postings on the CAIA Job Board for elite employers all over the world. In addition, Members also get exclusive content created by experts in the field, research papers, and online resources that provide critical insight.

To join the CAIA membership, candidates must:

• Pass Levels I & II exams

• Hold the equivalent of a US bachelor’s degree and more than one year of professional experience (or alternatively a minimum of four years of professional financial services experience)

• Agree to abide by the Membership Agreement, provide two professional references and pay the annual membership fee

Discounts are available to those who register early and to members of partner organizations. Visit caia.org/fees for more information.

Program Enrollment US $400

Level I Exam Registration US $1,250

Level II Exam Registration US $1,250

Annual Membership Dues US $350

Become a CAIA CharterholderThe CAIA program is comprised of a two-tier exam process through which you may earn the CAIA Charter. The Level I exam assesses your understanding of various alternative asset classes and your knowledge of the tools and techniques used to evaluate the risk-return attributes of each one. The Level II exam assesses how you would apply the knowledge and analytics learned in Level I within a portfolio management context. Both levels include segments on ethics and professional conduct.

Curriculum and Study MaterialsThe CAIA program is a complete curriculum for self-directed study. The CAIA curriculum books and study guides are the only preparation materials endorsed by the CAIA Association and the source of information on the CAIA exams. The curriculum is revised regularly to incorporate relevant industry developments and the latest academic research and is available for online purchase.

A minimum of 200 study hours per exam is recommended.

In addition to the curriculum books, which are available for purchase online, free resources are available at CAIA.org:

• Study Guides

• Candidate orientation sessions

• Workbooks

• Sample exams

• Study calculator

Registration• Exams are offered in March and September, which allows

candidates to potentially complete the program in one year

• Exams are available globally at proctored, computerized test centers (see CAIA.org/examcenters)

• Register at CAIA.org

• IT’S GOOD FOR YOUR CAREER. Members report that

earning the CAIA Charter gave them increased credibility

in the industry, increased their marketability, expanded

their professional networks, and exposed them to more job

opportunities.

• IT’S PRACTICAL AND RELEVANT. More than 90% of members

would recommend the CAIA program to a colleague and

more than 70% say the CAIA program is highly applicable to

their career goals.

• IT INCREASES YOUR MARKETABILITY. The top three motivations

for pursuing the CAIA program are: increased marketability

among peers; proficiency in alternative investments; and

preparation for future career opportunities.

• After completing the CAIA program, more than 95% of

surveyed candidates rate themselves as proficient in

alternative investments, as compared to 45% prior to the

program.

Level I Curriculum Overview – Newly Revised for 2016Professional Standards and Ethics

• Professionalism

• Integrity of Capital Markets

• Duties to Clients

• Duties to Employers

• Investment Analysis, Recommendations, and Actions

• Conflicts of Interest

Introduction to Alternative Investments• What is an Alternative Investment?

• The Environment of Alternative Investments

• Quantitative Foundations

• Statistical Foundations

• Measures of Risk and Performance

• Foundations of Financial Economics

• Benchmarking and Performance Attribution

• Alpha, Beta, and Hypothesis Testing

• Regression, Multivariate, and Nonlinear Methods

Real Assets• Natural Resources and Land

• Commodity Forward Pricing

• Commodities: Applications and Evidence

• Operationally-Intensive Real Assets

• Liquid and Fixed-Income Real Estate

• Real Estate Equity Investments

Hedge Funds• Structure of the Hedge Fund Industry

• Macro and Managed Futures Funds

• Event-Driven Hedge Funds

• Relative Value Hedge Funds

• Equity Hedge Funds

• Funds of Hedge Funds

Private Equity• Introduction to Private Equity

• Equity Types of Private Equity

• Debt Types of Private Equity

Structured Products• Introduction to Structuring

• Credit Risk and Credit Derivatives

• CDO Structuring of Credit Risk

• Equity-Linked Structured Products

Risk Management and Portfolio Management

• Cases in Tail Events

• Investment Process, Operations, and Risk

• Due Diligence of Fund Managers

• Portfolio Management, Alpha, and Beta

The Chartered AlternativeInvestment Analyst Program

The smartest investment you can make

What do CAIA Members say about the CAIA Charter?

Level II Curriculum Overview

+1 413 253 7373 - [email protected]+41 22 548 0782 - [email protected]

+65 6536 4241 +852 3655 0568

Global Headquarters:Regional Offices:

USAEMEA/Switzerland

SingaporeHong Kong

Register now at CAIA.org

Asset Allocation and Portfolio Management

• The Endowment Model

• Risk Management for Endowment and Foundation Portfolios

• Pension Fund Portfolio Management

Private Equity• Private Equity Market Landscape

• Private Equity Fund Structure

• The Investment Process

• Private Equity Portfolio Design

• Fund Manager Selection Process

• Measuring Performance and Benchmarking in the Private Equity World

• Monitoring Private Equity Fund Investments

• Private Equity Fund Valuation

• Private Equity Fund Discount Rates

• The Management of Liquidity

Real Assets• Real Estate as an Investment

• Unsmoothing of Appraisal Based Returns

• Core, Value-Added, and Opportunistic Real Estate

• Real Estate Indices

• Public versus Private Real Estate Risks

• Portfolio Allocation within Real Estate

• Farmland and Timber Investments

• Investing in Intellectual Property

Search: CAIA-Association @CAIAAssociation Search: CAIA-Association

Commodities• Key Concepts in Commodity Market

Analysis

• Role of Commodities in Asset Allocation

• Methods of Delivering Commodity Alpha

• Methods of Delivering Commodity Beta: Indices, Swaps, Notes, and Hedge Funds

• Macroeconomic Determinants of Commodity Futures Returns

• Effective Risk Management Strategies for Commodity Portfolios

Hedge Funds and Managed Futures• Structure of the Managed Futures

Industry

• Managed Futures: Strategies and Sources of Return

• Risk and Performance Analysis in Managed Futures Strategies

• Structuring Investments in CTAs

• Hedge Fund Replication

• Convertible Arbitrage

• Global Macro and Currency Strategies

• Fundamental Equity Hedge Fund Strategies

• Quantitative Equity Hedge Fund Strategies

• Funds of Hedge Funds

• Regulation and Compliance

• Operational Due Diligence

- [email protected]

#ItStartsWithYou

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