CFA Level 1 Study Notes – Alternative Investments

CFA Level 1 Study Notes – Alternative Investments

Study Session 17

Reading 47 (2022) – Introduction to Alternative Investments

-LOS 47a: describe types and categories of alternative investments;

-LOS 47b: describe characteristics of direct investment, co-investment, and fund investment methods for alternative investments;

-LOS 47c: describe investment and compensation structures commonly used in alternative investments;

-LOS 47d: explain investment characteristics of hedge funds;

-LOS 47e: explain investment characteristics of private capital;

-LOS 47f: explain investment characteristics of natural resources;

-LOS 47g: explain investment characteristics of real estate;

-LOS 47h: explain investment characteristics of infrastructure;

-LOS 47i: describe issues in performance appraisal of alternative investments;

-LOS 47j: calculate and interpret returns of alternative investments on both before-fee and after-fee bases

Alternative Investments 2023

Module 1 (Reading 58): Categories, Characteristics, and Compensation Structures of Alternative Investments

-LOS 58a: describe types and categories of alternative investments;

-LOS 58b: describe characteristics of direct investment, co-investment, and fund investment methods for alternative investments;

-LOS 58c: describe investment and compensation structures commonly used in alternative investments;

Module 2 (Reading 59):  Performance Calculation and Appraisal of Alternative Investments

-LOS 59a: describe issues in performance appraisal of alternative investments;

LOS 59b: calculate and interpret returns of alternative investments  on both before-fee and after-fee bases

Module 3 (Reading 60): Private Capital, Real Estate, Infrastructure, Natural Resources, and Hedge Funds

-LOS 60a: explain investment characteristics of private equity;

-LOS 60b: explain investment characteristics of private debt;

-LOS 60c: explain investment characteristics of real estate;

-LOS 60d: explain investment characteristics of infrastructure;

-LOS 60e: explain investment characteristics of natural resources;

-LOS 60f: explain investment characteristics of hedge funds;

Alternative Investments 2024

Learning Module 1 – Alternative Investment Features, Methods, and Structures

LOS a: describe features and categories of alternative investments

LOS b: compare direct investment, co-investment, and fund investment methods for alternative investments

LOS c: describe investment ownership and compensation structures commonly used in alternative investments

Learning Module 2 – Alternative Investment Performance and Returns

LOS a: describe the performance appraisal of alternative investments

LOS b: calculate and interpret alternative investment returns both before and after fees

Learning Module 3 – Investments in Private Capital: Equity and Debt

LOS a: explain features of private equity and its investment characteristics

LOS b: explain features of private debt and its investment characteristics

LOS c: describe the diversification benefits that private capital can provide

Learning Module 4 – Real Estate and Infrastructure

LOS a: explain features and characteristics of real estate

LOS b: explain the investment characteristics of real estate investments

LOS c: explain features and characteristics of infrastructure

LOS d: explain the investment characteristics of infrastructure investments

Learning Module 5 – Natural Resources

LOS a: explain features of raw land, timberland, and farmland and their investment characteristics

LOS b: describe features of commodities and their investment characteristics

LOS c: analyze sources of risk, return, and diversification among natural resource investments

Learning Module 6 – Hedge Funds

LOS a: explain investment features of hedge funds and contrast them with other asset classes

LOS b: describe investment forms and vehicles used in hedge fund investments

LOS c: analyze sources of risk, return, and diversification among hedge fund investments

Learning Module 7 – Introduction to Digital Assets

LOS a: describe financial applications of distributed ledger technology

LOS b: explain investment features of digital assets and contrast them with other asset classes

LOS c: describe investment forms and vehicles used in digital asset investments

LOS d: analyze sources of risk, return, and diversification among digital asset investments

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